Housing supply

Insatiable demand and low supply for housing means records continue to be set

Once we have even a small degree of understanding of who is driving the bus here, only then does it really make sense to consider what kinds of measures, if any, are worth worth considering to calm things down.

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Now that it’s December and 2021 is almost behind us, it seems only fitting that this crazy, record-breaking year for real estate in Toronto is ending with new highs.


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November sales figures, released last week by the Toronto Regional Real Estate Board, will come as no surprise to those who have followed this market, however casually.

Inventories remain low, prices continue to rise and, with no strong and decisive moves on the interest rate front, there is no sign that much will change soon.

With 9,017 sales, the most, in fact, ever reported by TRREB for the month of November, the seasonal slowdown that once characterized our market seems to be a thing of the past.

Eager buyers, obviously eager to lock in interest rates at rock bottom for a limited time, don’t seem to have a chance to pause.

Thus, demand remains insatiable while the supply of new listings, an essential component of any healthy and balanced market, is far from sufficient.


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For the sixth month in a row, new listings continued to decline to a total of just 10,306 for the month of November, down 13.2% year-over-year.

Given the nature of supply and demand, the upward pressure on prices continued unabated.

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With the average sale price in the City of Toronto now at $1,163,323, the average cost of a home is up 21.7% from November 2020. Which, it should be noted, was already a increase of 13.3% compared to the same month a year earlier. which was, at the time, considered a remarkable indication of the strength of our pandemic real estate market.


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What all of this really means is that numbers aside, the conditions that have defined our real estate market since the pandemic began have shifted from what seemed like a remarkable anomaly to essentially our new normal.

While there used to be a gap between sale prices in 416 and 905, which by extension represents the availability of options for those priced out of town homes, the exodus of suburbs caused by the pandemic has driven this migration at lightning speed. This inventory has been absorbed, which is why prices are rising so dramatically almost everywhere.

In the coming months, I hope to see more scrutiny and analysis aimed at understanding who exactly is competing to buy these homes. It seems obvious that the state of our market cannot simply be the result of a battle between budding owners.


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It just seems unlikely nearly two years into a pandemic that has been seen as the catalyst for changing the nature of how we all relate to our homes.

Someone needs to consider how much of the current momentum in our market is driven by corporate ownership and speculation, both institutional type investors gobbling up as much inventory as they can and those simply using home equity lines of credit to finance a down payment on second or third properties.

Even though these buyers represent only a portion of the people bidding on any given property on any given offering night, this kind of turnout is significant enough to add momentum – and price upside.

Once we have even a small degree of understanding of who is driving the bus here, only then does it really make sense to consider what kinds of measures, if any, are worth worth considering to calm things down.

Despite all the rhetoric about government interventions such as banning blind auctions and introducing cooling-off periods, none of this will make the slightest difference if it is the investor class that is fueling this fire.




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