Experts say Toronto’s scorching housing market is hotter than ever
Toronto’s sizzling real estate market may be entering its annual winter chill, but that doesn’t mean we can expect a wider market slowdown as the market is still simmering through an expected seasonal slump.
Extreme highs in property prices, sales activity and demand lead Remax agents to suspect that Toronto will experience “hotter conditions than ever” in the fall of 2021, despite the expected seasonal cool-down.
As usual, real estate experts point out a critically low supply of housing, which is fueling competition and driving up property prices.
Even with the perpetual procession of new housing developments reshaping the area’s skylines, the GTA just isn’t building the apartment necessary to break us out of the madness that residential properties have turned into in the 416 and 905.
Remax blog states, “Industry experts claim that the primary panacea to cooling this environment and ensuring more young families and first-time buyers have homes is greater housing availability.”
An extremely tight sellers’ market is nothing new in Toronto itself and is not improving even according to the latest figures.
The Toronto Regional Real Estate Board (TRREB) reports that the number of active housing listings in the city of Toronto fell sharply in September, down 43.85 percent year-over-year, while new listings plummeted 31.36 percent.
SEE “AT A GLANCE”! Check out TRREB’s monthly market report for September sales, which captures total residential transactions, total new entries and average sales price, with an emphasis on prior year values, previous months and seasonally adjusted stats. Full report🔗 https://t.co/KiPbvOQBp6 pic.twitter.com/5cxaZOYth0
– Toronto Regional Real Estate Board (@TheReal_TRREB) October 7, 2021
At current levels, if new listings were to disappear entirely, it would only take 1.4 months to exhaust every single unit for sale in town.
Such a low supply of existing buildings contributes to the fact that the out-of-control price growth makes housing even less accessible to the masses. The average retail price for all apartment categories rose a staggering 18.3 percent to $ 1,136,280.
This could be remedied, because new residential construction is picking up speed in the city and in the surrounding area.
Canada Mortgage and Housing Corporation (CMHC) reports a 65.24 percent year-over-year increase in home starts in September, with shovels being shoveled for over 4,600 new units this month alone.
Building new homes at the current pace may still not be enough to correct the market as some predictions of tense conditions extend well into the future.
These experts attribute the affordability crisis to the rules, regulations, and fees that extend permit and construction deadlines, and put direct pressure on politicians to pave an easier path for housing.
The lifting of travel restrictions and a return to pre-lockdown immigration levels are expected to add even more demand to the Toronto market, with 1.2 million newcomers forecast to the country over the next three years and many to settle in the Toronto area.