The Toronto Real Estate Market is Upside Down!
July 29, 2020
To say that it’s been a weird year would be a colossal understatement. Our world turned upside down in the middle of March and though there have been almost 9,000 COVID related deaths in Canada, if we hadn’t followed proper protocols and advice, the toll could have been much higher. I want to acknowledge that while many of us complain about having everything change overnight, thousands of people lost their lives. Though whatever downturn people are experiencing in the markets, it’s important to keep human loss in mind.
In this blog though, I am discussing the real estate market.
The bottom fell out of the real estate market mid-March. What was shaping up to be a record year stopped almost overnight, which is completely understandable. Anything that wasn’t an absolutely necessity didn’t happen.
The market began to return to normal in May and in June bounced back almost completely. I think the more we learned about the virus, the more comfortable people felt making a move. Though the process is still not quite the same as it was before March, we know a lot more about how COVID-19 is transmitted and how to keep ourselves safe. In fact, in Phase 3, realtors will be allowed to hold open houses, though I won’t be rushing to host them.
In terms of my own experience, I’m seeing a steadiness in the market but not an overwhelming amount of craziness. I have several condos currently on the market and a house coming to market in August. (it’s a super cute bungalow in East York, btw.)
While Toronto has been a city of two markets for decades (condos and houses) it’s become even more pronounced and has swung in the opposite direction. A large number of entry-level condos are coming to market, which is softening the market a little. One reason is that with the pandemic, travel to Toronto was … limited. People who were relying on Airbnb for income found that source dried up completely. Combined with the new bylaws about short-term rentals, for many owners, it didn’t make sense to keep the units or even look for long-term tenants, so they’re selling them. The rental market has also softened, although I believe this is completely temporary. (See my predictions in the next blog!)
The demand for larger condos is still strong as people continue to downsize, but more smaller condos on the market means they’re sitting longer on the market than usual. Normally I recommend that people who are moving from a condo to a house buy first, but right now I’d focus on selling your condo before buying that house. The housing market is still hot and you cannot go in with an offer conditional on selling, which means you could be stuck paying two mortgages.
If you’re not flipping, it’s a good time to buy, but I wouldn’t be looking at places that are getting into bidding wars. There is enough product out there that there are deals to be had.
I’m still fielding questions about what’s happening with new construction. I’m less of a believer than I was before. Developers are still trying to sell them at three years from now prices and I think it’s risky. There are no longer good deals with new construction as the market is levelling out. I’ve always been a big proponent of resale product and that holds true even more now. The resale market offers some excellent opportunities; more space, more selection and definitely better price points.
As always, if you have any questions about the market, please get in touch!