17 March 2021 ~ 0 Comments

Housing Bubble? B.O.C. says no, then says watch out for escalating prices.

There is so much information floating around about housing bubbles in places like Toronto, you can’t blame buyers or sellers on what and who to believe?

Last year CMHC (Canada Mortgage and Housing) predicted house prices would drop anywhere between 9%-18%, before picking back up in 2021. 

A few short months ago, the Bank of Canada stated: ‘Bank of Canada doesn’t see housing bubble but its watching out, deputy governor says’.

Since then both the CMHC and BOC have adjusted their forecasts. So, who and what are we exactly supposed to believe? Well to be fair to both, we are certainly living in unprecedented times. And even in the best and more normal of times, pegging what is going to happen with house prices is almost impossible to predict.

Now, what’s been happening in the Toronto market in February? Well, pretty much a continuation of the past few months. One clear exception is that the demand in the condo resale market is back pretty much to pre pandemic levels, albeit the supply side still has some access to rid of. But condo sales are way up, and the deals are becoming much harder to find.

Everyone said people wouldn’t want to return to living in communal spaces (condo buildings) and working from home is the new thing. Well, I have some news for you. People’s want for affordable housing is the bigger focus and condos meet that need for many buyers. And eventually, what suits employers best will determine where you work. 

Even the condo rental side is picking back up. It’s still going to lag onwards for a bit, but it’s encouraging to see the activity.

How about the house side in Toronto? February sales were up 52% as well as new listings almost matching it at 43%. Now we could just be borrowing from the buyer and sellers who would have been on the market in April and May, traditional strong months in sales. We’ll have to wait and see but it’s interesting to note that active listings are flat (new supply is being eaten up by demand).

The biggest news and probably no surprise, is that the average price through the Toronto Regional Real Estate Board is now $1,045,488. This average has been hovering around the mid $900,000’s for the past seven months. Then it shot up this past month. This of course includes the GTA, which the 905 has been leading or holding their own when it comes to activity and price growth. 

In Toronto, where almost two thirds of sales last month were in the condo market, the 905 that number sits at about 15%. 

It will be interesting to see how this trends out as we approach the historically busy spring market. 

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