Read on Twitter
I haven’t been writing Twitter threads lately, but I felt like weighing in on the current market.
From the data I am seeing and the anecdotal comments from Realtors, demand has clearly picked up in the resale housing market in the GTA, but looks like listings are coming.
From the data I am seeing and the anecdotal comments from Realtors, demand has clearly picked up in the resale housing market in the GTA, but looks like listings are coming.
CMHC’s Siddall warned that we shouldn’t be reading too much into the pricing during a low volume, low supply market. Pricing is always sticky in the short term, so there is some truth to that. Strikes me as covering his butt a bit as data bucks his forecast, but it’s early.
Siddall quoting a mortgage broker with a 2 star YELP rating makes me laugh, but that is a thread for another day.
The fact that we don’t have more listings is still a bit puzzling, especially on the condo apartment side. With the much talked out decline in tourism and out of town contract work (especially film industry), AirBnB listings are hitting the rental market.
The influx of short-term rentals has been discussed ad nauseam, but why aren’t these investors selling when the ownership market appears to be much stronger than the rental market? Any ideas?
One must conclude that they expect the rental market and/or AirBnB market to bounce back.
Rents have clearly declined recently for studios and 1 beds, but demand is still decent. I spoke on a @In2itionRealty Zoom meeting recently & several brokers said as much.
Rents have clearly declined recently for studios and 1 beds, but demand is still decent. I spoke on a @In2itionRealty Zoom meeting recently & several brokers said as much.
Those same brokers admitted that two bedroom demand was non-existent (their portfolios are primarily recently completed Toronto condos). Expensive units and decline in desire to take on roommates at this time is killing that market. WFH with roomie is a no go right now.
The rent decline is bringing forward the told ya so gang. The Toronto is oversupplied crowd (the folks that say new supply doesn’t help affordability, but think oversupply will drive down rents - these dinks exist, seriously, they hold both those views)
This may seem like semantics, but we’re not oversupplied right now, we’re suffering from under demand. People are afraid to move, others that want to come from other countries for work and school cannot, and even recent graduates are starting jobs by working at home at mom & dads
There is a freeze on movement - retirees not moving down, new households not forming, and delinquent tenants not evicted. We are not in a normal market, not even close.
If you put my feet to the fire, I’ll say the market starts to recover in the GTA overall in July, with slower take up in the downtown towers due to overcrowding, elevators, less need to be close to the office, and generally expensive rental rates.
This is not to say we’ll get back to the Oct/Nov 2019 peak rentals rates anytime soon, especially with the amount of supply coming. 2021 could match the 2015 record level for apartment completions.
Remember that despite the guarantees by the perma-bears that this record boom would drive down rents and prices in 2015, it didn’t. Rents and prices were relatively flat. But, the market will be different next year as employment will take a while to come back.
There is too much uncertainty and too many unknowns to really formulate a forecast with any real certainty. When you make a bold claim, all you end up doing after that is search for data that supports that thesis.
Prior to the pandemic, if you thought the market was a bubble with too much debt, you’re looking at low immigration, job loss, deferral cliff & rising supply.
Prior to the pandemic, if you thought the market was healthy, you’re looking at recent resale activity, bidding wars, potential move-down buyers staying put (& certainly not going to retirement homes) + the fact that this is a blue collar recession, white collar buyers all good
I’m continuing to focus on the long term, instead of short term. Toronto is a dynamic city(I have been in most major US cities - still missing LA, San Diego, Denver) and people will come here, businesses will come here. Turmoil in the States will only help us.
If you’re buying with a 5-10 year hold anticipated, rates are good and competition is lower than usual. Investors will sell rental suites and stall rent declines. Be prepared for short-term volatility. Good luck. 
