It was another strong month of sales as the Toronto Real Estate Board reported the sale of 8,596 homes, at an average price of $1,070,911, up 12.6% over August 2020. Sales volume would have been higher had it not been for the lack of homes for sale. Only 10,609 homes came on to the market in August, nearly 50% less than normal, and of course, without inventory, sales cannot take place. I believe the reason for the low number of homes coming up for sale is the fact that with the Covid restrictions relaxing, and the summer weather, most of the people who would have placed their homes for sale decided to enjoy the summer and postponed their plans for selling until after Labor Day. So while I do expect the market to be better supplied, I am certain it will be met with even more demand.
While more homes will come onto the market in September, it’s not going to solve the intense buyer competition and increase in prices, as there is still greater interest in purchasing homes as opposed to homes available for sale. This situation will become worse once immigration into Canada resumes. The federal parties vying for office in the upcoming federal election have all made housing supply and affordability a focal point in their campaigns. Working with provincial and municipal levels of government on solving supply-related issues is much more important to affordability than interfering with consumer choice during the home buying and selling offer process. Not only does an average building permit, process and levies, cost a builder between $100,000 to $175,000 per lot, adding insult to injury, that process can take anywhere from 3-5 years due to government red tape. Solving that bottleneck will go a long way to bringing supply up to the level of demand and stabilizing prices.
As we head into the Fall market, I expect the luxury segment to see strong price appreciation, and out-perform the rest of the market, due to heightened foreign demand and local buyers returning from vacations. I also expect the condo market to perform very well due to the demand from both foreign and domestic students, new immigrants and a higher demand for Airbnb as the number of visitors into Canada returns to traditional levels. It should be a very strong market ahead so, if you are thinking of making a move feel free to give me a call, I’m never too busy to offer my advice on how to capitalize on it.
I hope you enjoyed the summer and stay safe!