LOOKING TO VANCOUVER FOR REAL ESTATE MARKET PRECEDENCE
This week I had 3 calls from my clients about the current state of the Toronto real estate market. These are smart, educated people who look to trustworthy sources for this information but have been misinformed by the media. My clients wanted to know what was really going on in Toronto and they came to the right source. I’ve spent the last 11+ years immersed in real estate. I live, breathe and of course, sell real estate. I know the Toronto real estate market better than any financial economist or news reporter spouting there ill interpreted facts.
And let me tell you, there is no ‘perfect storm’ brewing and the market certainly isn’t tanking. Wynne’s measures may have temporarily slowed rising Toronto prices, but the whole picture including our low interest rates, low housing supply, a strong economy, a constant influx of people moving to Toronto and zero rental vacancy rates depict a healthier market than the media’s headlines would lead you to believe.
In fact, the market was originally so healthy and so hot that the government implemented their measures in an attempt to cool it. But the truth is that those economic conditions that caused it to escalate in the first place haven’t changed.
And renters are feeling those woes. In July we had five properties up for lease and every single one of them had at least four offers with renters bending over backwards to get the place. Most vying were offering four to six months rent up front and some were even offering a full year to ensure they beat out the competition.
What I’m seeing everyday is certainly different than what the media has been projecting. Last week MLS was flooded with listings that were just updated as ‘sold’. Not only was it flooded, most sold went firm and were for asking or above. Those that went below did so marginally.
So, was the fair housing plan to blame for the slowing sales and the increase in rental competition we’ve seen over the last few months? Likely, but maybe not in the way Wynne was hoping for. Perception is everything and I think consumers got scared. Fear mongering and click bating were running rampant in the headlines and it had an affect on both buyers and sellers alike.
And trust me, I’ve seen plenty of headlines over the last decade. But years of keeping a pulse on the market has me considering historical precedence, trusting the current data and looking to similar markets like Vancouver for predictions of where we could be headed.
The trends of the previous months have showed a cooling of the market — at least where sales are concerned — but the decline in sales volumes is not an accurate number when gauging the market, nor is the average sale price in an entire city since real estate is a local market game.
But, nonetheless I’m reminded of Vancouver in August of last year, where similar measures and government intervention in British Columbia led to a temporary cooling of their market for about 10 months. And, let’s be real if we were going to look at any other market for comparison, Vancouver would be it.
After a few months the Vancouver market was bouncing back from the legislation and the market is now just as active, prices have risen and are once again setting new records. I’ve already seen a shift in our own market, just last month we sold three apartments with the exact same layout in the same building, within one month from the first sale to the last. The latter fetched 5% more than the first. Does that really sound like a declining buyers market to you? I should also note every one of those buyers came in with low ball offers and all were turned away and record prices were still achieved for each sale.
If Vancouver is any indication of what might happen over the next few months, buyers should get into the market now and lock down a fixed mortgage rate. If you can afford to get into the market and have been thinking about getting in, don’t wait for some ‘crash’. Now, is your time. With increased housing supply and more stagnant price growth it may not be a buyers market but you should be able to purchase without competing or setting new price precedents.
Don’t let stories in the media intimidate you. Educate yourself and when in doubt, head back to our blog for the #HonestBroker truth.