Oh boy do Toronto Real Estate Prices bring the heat!

Toronto Real Estate Prices Are Hot, currently on fire actually, however the irony is that it seems to only be a spark in comparison of the roaring fire yet to come.  This news is the latest coming in scorching hot from CIBC’s Deputy Chief Economist Benjamin Tal in a recent article for Financial Post.

‘If you think Toronto is unaffordable now, you wait’: CIBC’s Benjamin Tal on GTA housing

In the video, Tal notes that during the pandemic, there was a fuel in demand for bigger housing and greener pastures, hence the to migration from downtown condos to the suburbs.  This fuelled the fire in detached home prices across GTA cities, and left a large inventory of DT condos on the market in it’s dust.

Now however, there appears to be a rubber band effect happening.

The condo market has seen an increase in both sales and prices over the last couple of month, beginning in Feb 2021.  As of the last 4 week period, March 16 – April 13, the average price of a Toronto condo is $717,000, an increase of 8% over the same time period last year.

John Pasalis, of Realosophy Realty, had this to say for the National Post:

‘People who are thinking they are just going to go in and buy something for $30,000 under asking are going to be really surprised. That’s not the market today; that was the market in October.’

The fact is that everything must come to an end.  More and more people are realizing that with the roll out of COVID vaccines, shortages and all, an end is eventually on the horizon.  Coupled with a resistance to the insanity of suburban home prices, a return to the city, where condos are the main source of housing (and much more affordable) is imminent.

Another notable by Tal?

If people have purchased and live in a home 2 hours away from Toronto but still work in the city remotely, they may have to come into the city for work and meetings etc. eventually.  Thus, to serve that need, some suburbanites may opt to purchase a DT condo in addition to the sprawling detached home they own.

If they don’t – they may soon be priced out to buy.  A reality big European cities like London & Berlin, or in the US, Manhattan, face.  Where renting is incredibly common due to lack of home price affordability.

He goes on to say that the rental markets in the short term may have come down, but in 2022/23 we should see rental rates rise again to levels seen in 2019.  Which we see as a golden nugget for existing and potential condo investors that have been forced to deal with tenants leaving and rents reducing.

The Economist is also a very big believer in the fundamentals that make Toronto such an incredible city.  Demand.  From a long term perspective, the fact that Toronto Real Estate Prices are Hot, is consistent with the big picture.  Supply is a very big issue, with affordable housing being non-existent, and more needs to be done to increase rental housing in order to curb that.  Also..

Canada was just ranked the #1 country in the world.  (Which of course most of us already know!)

What do you think that means for a country with an already existing open armed immigration policy?  Yep.  Further, what do you think that means for the city in which 35% of all immigrants flock to once they get here? Further yeps. Also.. also..

Interest rates, while they’ve begun to creep up, continue to remain unbelievably low.

Moral of the story?

If Toronto Real Estate prices have you wondering which direction the market is heading.  There appears to only be one long term answer.

Up.

-Abode Realty

Don’t miss the fire that is the Toronto housing market!  Visit the Abode Realty Buyer’s page today and seize the opportunity to buy a piece of Toronto – while it still exists.