The Toronto Real Estate Market Continues its Upward Tear.
The weather doesn’t seem to be the only thing unseasonably warm this year. The Toronto Real Estate market reported its continued exponential trend.
Overall, sales were up by 42%, with prices rising 5% when compared to the month prior.
What is Driving the Market?
“Of note is the market sectors on the outskirts of the GTA that continue to drive this upward trend in statistics.” Says Graham F. Alloway, Founder & Broker of Record of ReaLawState. “We are continuing to see immense pressure and outrageous demand in a few hot areas. Its important to look at the big picture.”
Examination of the different areas of the GTA show hot activity in the suburbs. Sales outside of the core GTA continue to pull Toronto’s average price and sale numbers upward.
“Strong and recovering sectors combined with lower-than-ever mortgage rates are contributing to the continued market craze. Buyers are making situational & lifestyle changes due to the shift to remote and self-directed work. First time home buyers are discovering advantages to owning, and those moving are using the opportunity to refinance as an excuse. We will see how long this craze continues when Toronto makes the decision to finally open up.”, Graham said.
York Region saw a 46% increase in sales and a 5% jump in price.
This trend is emphasized when you zoom out further to Regions that might not be fully covered by TRREB. Simcoe County, for example, saw a 62% jump in reported sales and a 65% spike in price.
Comparatively, City of Toronto (proper) saw an increase of 37% in sales and a meager 8% improvement in Average Sale Price.
“When you have overall upward trends in Sales & Selling Price for a metropolis, with an lagging figure in the City’s Centre, it begins to tell a very different story.” Said Baron Alloway, Sales Representative and Executive Director at ReaLawState.
“I keep hearing of those hesitant to buy into the market because of a looming correction. I simply respond by saying product type and location matters. If the driving forces behind the upward trend remain, we might see a shift in leading and lagging market sectors, but overall this market will sustain.” He said.
Even if interest rates rise, its not likely to cause a catastrophe.
“The sheer demand of buyers over sellers at the moment is astonishing. Even if half of these buyers were to get cold feet due to higher interest rates, its doubtful things would come off that far, if at all.”
For now, the market direction shows no signs of stopping.
“Sellers and REALTORS(R) are realizing that Torontonians continue to escape city life. Listings on TRREB’s MLS(R) system are increasing and sales figures are rising for properties this board is not typically responsible for.”
Evan Schwartz, a Sales Representative at ReaLawState, commented on the type of inventory flying off the shelves.
“From my own Real Estate practice, its clear that buyers want turn key.” He said.
“If your property isn’t ready for the Buyer’s moving truck the following day, its far less likely to get snapped up in this market. Nobody wants a project.”
Evan continued by commenting that overpayment on a property is an issue in this asset class, issuing a warning not to let emotions get the better of buyers.
“I’m watching condos sell far above what they should bear even in these superheated scenarios. Its a negative cycle that is getting worse. When cooler heads prevail, there will be those that will have paid the price.”
The Death of The Investment Condo?
As rental rates for one and two bedroom units continue their (more gradual) descent, and more Landlords make the tough decision to offload the investment, many wonder if the writing is on the wall for one-unit investment assets. In a time when buying has become more affordable than ever before, there are less and less incentives to rent. Even with a nominal rise in interest rates, tenants are predicted to continue to become buyers. The conversion is predicted to offset the spike in investment listings, preventing a condo crash.
ReaLawState Realty Brokerage provides an unmatched experience by pairing you with Agents and Lawyers in every transaction. Interested in learning more? Contact us for a free consultation today.
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