September another record-smashing month for Canada’s largest housing market, new data showing home sales in the greater Toronto area searching 42 year-over-year last month.
I want to get some more perspective from on the ground.
John Pasalas president at real Sophie realty joining us now. John always nice to see you um, give us a sense on how busy you have been. These numbers would suggest that uh, if you’re in the real estate game, it’s, it’s, been a pretty active time.
Yeah i mean it’s, absolutely incredibly busy uh in the real estate space uh again uh. I i can’t entirely, explain all of it, but it is what it is. I mean a lot of strong demand, but i mean one thing i think is worth noting is that we need to kind of take some caution when we’re.
Looking at these, these high level numbers, i mean we see sales surging, but but there’s, really a lot of different things going on in the housing market. Low rise is busy condos, very different story, a much much slower market, in particular in the city of Toronto.
Right now why don’t? You explain why that is in your opinion, yeah, so i mean i think there’s. A lot of things that are going on, i mean the low-rise house demand is again a lot of this is driven by uh, partly just by this.
This desire for people to kind of move out of condominiums into the into the suburbs have more yard space so that’s just created a bit of an exodus from downtown. We’re, seeing a surge in rental inventory.
Rental inventories up about 250 compared to last year. Again, a lot of this part of this is just recessionary. You know when people lose jobs, downtown they move back home with mom and dad when uh they can work from home.
There’s, no real need to be spending two grand a month on a rental. So again, this is pushing up the supply of of of condo rentals and it’s, pushing up the supply of condos for sale because demand quite isn’t as strong in that segment.
So right now, condo listings uh active listings are up 100 compared to last year, so it’s, a much sluggish, much more sluggish market than the low rise home market. We had a conversation earlier on with jason mercer from the real estate board.
Just breaking down some of the numbers and he came back to that supply demand equation, in particular, with detached homes, walk us through what the process is like. You know when i think about the red hot housing market in an area like toronto.
A few years ago that we talked about you know you had a lot of hubris. You had as a seller the opportunity to make the buyers sweat if they didn & # 39. T get an offer on the table really quickly. What’s happening with transactions? Would you say right now? What’s? The process like you know it’s interesting, so the market has, i mean, cooled down a little bit over the past few months and again part of that is just that we’re, seeing more inventory, so the downtown condo market uh.
Interestingly enough, usually the hottest market is probably i’d, say among the cooler markets. When we’re, looking at sort of low-rise homes, sort of the the tightest markets and the most competitive uh are really these outer suburbs.
Those are the markets where supply is really tight, demands really strong tons of tons of activity, low rise homes downtown Toronto still busy, but not quite as competitive as it was even even two months ago and john, are you noticing a sweet spot um? You know, and quite frankly, this is just anecdotal when i talk to people on b m Bloomberg or people who are talking about housing, because you know it becomes a popular subject with people that the higher you get in pricing, that’s.
Where things get a little more tricky, given the environment right now, almost like there is, there is a sweet spot of where the demand is tied to what the actual price or or how high you can go as a potential buyer right now.
Yeah. Definitely i mean, of course, the we are seeing that the more affordable homes are certainly the most competitive. You know, but having said that, i mean with with rates the way they are. I think it has helped uh fuel some some decent demand, even in the higher end market, i mean we’re still, interestingly enough, seeing a lot of competition in homes – and you know in the two plus million price range uh, which is generally considered The higher end in the city uh, you know so there’s.
There’s, still a decent amount of competition and interest. And again, i think part of that is just that money’s, so cheap. So for some people it’s, just a lot easier to upsize. Now you know when you can borrow at 1.
7 all right. What does your crystal ball? Tell you, john? Where do you think we go from here? I mean certainly the the story of immigration has been complicated by covet 19. That has been one of the driving forces behind the population, growth in cities like toronto and, ultimately, the housing story.
The head of the cmhc not too long ago on b m bloomberg, said what happens to the jobs picture in this country three, four five months from now, and how’s that going to impact demand? So what does your gut tell you? Yeah? I mean, i think there’s, certainly, of course, some risks in the economy i mean my feeling is, i think the low-rise single-family home segment probably can manage those i mean the demand is still strong.
The supply is still pretty tight. We don’t have a lot of new construction in that space. So even if we see demand, pull off or or an increase in inventory, it’s, probably not going to lead to any downward pressure on prices, but the condo market.
In a particular downtown completely different story, uh, you know i, i see rental listings continuing to increase because we’re not going to have those international students back anytime soon, uh immigration is not going to rebound anytime quickly.
So we’re. Going to see continued downward pressure on rents and and we’re starting to see downward pressure on prices. It’s not coming through in the average prices, but downtown’s got five months of condo inventory and when you have a lot of units that are very similar, i mean one of the only ways to sort of stand out is The price less than what your neighbors are listening for, and we’re starting to see that right now.
Well, i’m glad. You brought that up too, because obviously the headline can be misleading when it comes to that condo story, so that’s well worth watching. John always good. To get your insight analysis thanks very much john pasalis joining us with the latest on those housing monthly numbers that we & # 39.
Latest Toronto Condo Projects