Now that we’re into December and 2021 is almost behind us, it seems only fitting that this wild, record-setting year of Toronto real estate is winding down with more records being set.
The November sales figures, released last week by Toronto Regional Real Estate Board, will come as no surprise to those who have been even casually following this market.
Inventory remains low, prices continue to rise, and in the absence of any strong and decisive moves on the interest rate front, there is little indication that much will change any time soon.
With 9,017 sales, the most, in fact, ever reported by TRREB for the month of November, the seasonal slow-down that once characterized our market appears to be a thing of the past.
Eager buyers, evidently keen to lock in limited-time-only rock-bottom interest rates, don’t appear to have the option to take a break.
Thus, demand remains insatiable while the supply of new listings, an essential component of any healthy and balanced marketplace, is far below adequate.
For the sixth consecutive month, new listings continued their decline to a total of just 10,306 for the month of November — down 13.2% year-over-year.
Given the nature of supply and demand, the upward pressure on prices has continued unabated.
With the average selling price in the city of Toronto now $1,163,323, the average cost of a home is up a full 21.7% from November 2020. Which, it should be noted, was already an increase of 13.3% from the same month one year prior which was, at the time, considered a noteworthy indication of how strong our pandemic real estate market was proving itself to be.
What this all means, really, is that the numbers aside, the conditions that have defined our real estate marketplace since the pandemic began have gone from what felt like a remarkable anomaly to essentially our new normal.
Whereas once there was a gap between sale prices in the 416 and 905, which by extension represents the availability of options for those priced out of homes in the city, the pandemic-driven suburban exodus drove that migration at warp speed. That inventory has been absorbed, which is why you see prices almost everywhere rising so dramatically.
In the months ahead, what I hope to see is some further scrutiny and analysis dedicated to understanding whom exactly is competing to buy these homes. It seems obvious that the state of our market cannot simply be the result of fired-up would-be homeowners battling it out against one another.
That just seems unlikely almost two years into a pandemic that was understood to be the catalyst for changing the nature of the way we all relate to our homes.
Someone needs to be looking at how much of the current momentum in our marketplace is being driven by corporate ownership and speculation, both the institutional-type investors gobbling up as much inventory as they can and those simply utilizing home equity lines of credit to fund a down payment on second or third properties.
Even if such buyers only make up a portion of people making offers on any given property on any given offer night, that type of participation is substantial enough to be adding to the momentum — and the rising prices.
Once we have even a small degree of understanding around who is driving the bus here, only then does it actually make sense to consider the types of measures, if any, worth considering to calm things down.
For all the talk of government
interventions like banning blind bidding and introducing cooling off
periods, none of that will make so much as a hint of difference if it’s
the investor class pouring fuel on this fire.
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