Toronto real estate prices are on the decline, apparently, however Toronto home sales are also up 12%. This information, to the untrained eye seems contradictory.
If we take a long view of Toronto real estate, we have heard in the past few months that prices are rising in a certain residential housing type while others are down. The mixed reports all aim to indicate that Toronto and Canada’s real estate market is in a correction or a bursting bubble.
The problem with writing from a particular angle, one that is a hopeful scope for certain demographics and scary for others is that the information is skewed to favour a particular perspective.
When it comes to the increase in real estate prices we can safely note that price growth SLOWING does not mean that it has stopped. That’s correct: the aggregate data being published doesn’t account for a lot of things.
That means that they don’t take into account the size of the property, the taxes or the location. They simply take in house prices and the number of sales compared to the hottest market ever and decide that this is necessarily the case that we are in a decline.
The fact is, there are markets that aren’t recession or bubble-proof, but they can surely stay competitive in terms of growth in an economic decline. Some of this can be attributed to organic demand or the fundamentals. That means people WANT or NEED to live in these specific markets. Toronto is one of the few examples of this in Canada.
Let’s take a broad look at why this is significant for the average person in Canada. Market regulations, specifically the new taxes and rules that make it more difficult to purchase a home. This is actually compounded by the strict and slow process of construction in Ontario.
When it comes a to supply issue in the city of Toronto, specifically that of affordable or mid-range costing housing the only answer for many is condos.
While it is necessarily true that there will be at least 20,000 new units in the city of Toronto within the next few years, how many of those are spoken for? The fact is, you cannot stop people from buying multiple properties. You can place a foreign buyer tax, on residential properties- but you can’t stop people who have no intention to invest.