Toronto’s sweltering real estate market may be entering its annual winter chill, but that doesn’t mean we can expect a broader market cooldown to continue, the market is still simmering through an anticipated seasonal dip.
Extremely high home prices, sales activity and demand have led Remax agents to suspect that Toronto is experiencing “hotter than ever” in the fall of 2021, despite the expected seasonal cooling.
As usual, real estate experts point to a critically low supply of housing, which is fueling competition and pushing up house prices.
Even with the perpetual procession of new residential developments reshaping the region’s skylines, the GTA just isn’t building the homes it needs to take us out of the madness that residential real estate turned into in the 416 and 905.
Remax’s blog states that “Industry experts argue that the number one panacea for cooling this environment and enabling more young families and new homebuyers to get a home is more housing.”
An extremely tight seller’s market is nothing new in Toronto itself, and it’s not improving from the latest numbers.
The Toronto Regional Real Estate Board (TRREB) reports that the number of active homes in the city of Toronto fell sharply in September, down 43.85 percent year-over-year, while the number of new homes fell by 31.36 percent.
WATCH “AT A GLANCE”! Check out TRREB’s monthly market report for September sales that shows total residential transactions, total new listings, and average sales price, with a focus on year-over-year, prior months, and seasonally adjusted metrics. FULL REPORT🔗 https://t.co/KiPbvOQBp6 pic.twitter.com/5cxaZOYth0
— Toronto Regional Real Estate Council (@TheReal_TRREB) October 7, 2021
If new listings were to disappear altogether, it would only take 1.4 months of sales at current levels to exhaust every single unit for sale in the city.
Such low inventory supply contributes to spiraling price growth, making homes even less accessible to the masses, with the average sale price for all home categories rising a whopping 18.3 percent to $1,136,280.
Some help could be on the way, as new housing developments are gaining momentum in the city and the surrounding region.
The Canada Mortgage and Housing Corporation (CMHC) reports a 65.24 percent year-on-year increase in the housing market in September, with more than 4,600 new units shoveling in that month alone.
New home construction at the current pace may still not be enough to correct the market, with some predictions of tight conditions lasting well into the future.
These experts are pinning the affordability crisis to the rules, regulations, and fees that contribute to approval and construction timelines, putting pressure on politicians to pave an easier path for housing startups.
The lifting of travel restrictions and a return to pre-lockdown immigration levels is expected to bring even more demand to the Toronto market, with 1.2 million new entrants to the country over the next three years, with many expected to settle in the Toronto area.