August 2021 GTA real estate review
Today, we chat with Lawrence Mak, a Mississauga realtor, to go over what’s happening in the GTA real estate market. We discuss the TRREB numbers for the month of August, and what we can expect in the fall. Join us for the full discussion below:
Lawrence Mak’s contact info:
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:11] Welcome everybody. Today, I am joined by Mississauga realtor Lawrence Mak to talk about the freshly released Toronto Real Estate Board numbers for the month of August. It was a hot month, steamy month. Lawrence, hopefully you got some vacation, but I think you were busy in between. Talk to us about what you saw in August in Toronto real estate.
Lawrence: [00:00:37] Thanks a lot, Chris. Well, let me just share my screen, one second.
Chris: [00:00:41] Alright, graphs, we go straight into the graphs.
Pent up demand for Toronto real estate
Lawrence: [00:00:44] Straight into the graphs. All right. This is the statistics for last month in August. Average price point was about one point seven million, which is up 13 percent from last year. So those are on average, between condos, detached, semi-detached.
Chris: [00:00:59] So let’s, let’s pause there because I think this is significant. Here you have in this graph, four years, five years of price action or historical price data, and you can see each successive year from 2017 2018, 2019, 2020, and then you have this massive jump to 2021. I mean, that’s pretty remarkable in the last five years.
Lawrence: [00:01:22] There’s a lot of pent up demand for real estate right now and probably in the future.
Chris: [00:01:28] Crazy, and so what what’s driving this price action that significant? I imagine it’s supply and demand.
Lawrence: [00:01:34] Just basically supply and demand. The, I mean, the average price went up 13 percent and it’s considered a little bit of a lull, in my opinion, right before the storm. I really do feel September and October are going to be very, very strong. The number of sales have dropped from last year, actually. It’s only about 8600 sales in August versus about 11000 in the previous year. And I think a lot of that has to do with COVID. It’s just that now that the weather is nicer and the lockdown restrictions have been eased quite a bit, everybody is just going out to enjoy the summer. So no one’s really thinking about real estate.
Chris: [00:02:10] Right. So what you’re saying is sales were down in August because listings were down. It’s not that people didn’t want to buy, it’s that people didn’t want to sell. People weren’t interested in selling.
Low supply still rules the market
Lawrence: [00:02:20] Yeah. Well, I mean, the average price still went up, but just the number, the volume in terms of the number of transactions was down. And so it’s anticipated pretty much after next week, once all the kids go back to school and everyone’s head starts getting a little clearer and you’re not really enjoying the summer, weather as nice, it’s just going to get crazy. I mean, I’m already hearing many, many multiples, 20, 30 type of offers further in the outskirts, and I think it’s just going to come back.
Chris: [00:02:47] Brutal. Ok, so we’re going we’re going back to that territory after a little bit of a lull. A little bit of a breather.
Lawrence: [00:02:53] Yeah, I think so. And so this is all different housing such as condos, detached, semi-detached. So again, this is the number of sales, about 11000 last year, about 8600, so the number of houses dropped 20 percent in terms of the number of sales and even the number of active listings.
Chris: [00:03:12] That’s significant. That’s down 40 percent, 43 percent down year over year.
Lawrence: [00:03:16] People just aren’t selling houses right now. And then, I mean, I had I mean, I’ve got three listings coming online this month and I pretty much told everybody to wait in August. They’re thinking about selling in August. And I’m like, just wait a few weeks. Then we sell in September and everyone said, OK. So I mean, I think a lot of other realtors and sellers are doing that as well and you’ll see a lot more transactions in September. So just detached homes, detached homes in Toronto, for instance, averages about one point seven million, up about 11 percent. I know, quite a bit. Mississauga, down a bit from last month. But still, I mean, all of these are still up significantly from the previous year. This is about 1.5 million in Mississauga for a detached home, up 13, 14 percent. And Oakville, for instance, you know you’re hitting close to two million, up 24 percent. I mean, this trajectory.
Chris: [00:04:09] It’s just taking off. It’s insane.
Lawrence: [00:04:12] Just taking off. I mean, that’s just.
Chris: [00:04:14] Wow, OK. So do you have another slide because I want to ask a question after this.
Lawrence: [00:04:19] Sure. I mean, these are the slides for the detached, and we can talk about condos letter. What’s your question?
Does Toronto have a housing crisis?
Chris: [00:04:24] Yeah. Well, I mean, when you see these graphs and I’m, I’m asking this question in the context of the coming election. It seems to me that this is not sustainable and something needs to give eventually. So it is becoming a political issue. In your professional opinion, do we have a housing crisis in the GTA?
Lawrence: [00:04:46] Definitely. I mean, we have so many people coming in and just not enough supply.
Chris: [00:04:51] Right. So, so it’s like, and this is during pandemic without pre-pandemic population trends of immigration, students. And Toronto keeps on building itself up as a global hub. So we’ve got a problem. So, you know, is there anything that you have heard from any of the candidates that makes any sense that can address this? Or is this just a behemoth that’s, that’s got a life of its own and there’s nothing to control it. It’s a runaway freight train. Look out.
Federal party platforms on housing
Lawrence: [00:05:22] Yeah, I mean, in my opinion, the party platforms in terms of the housing aren’t really going to address the problems, even stuff like blind bidding are just bringing a few more houses online or whatever. I mean, first of all, at least in Ontario, like real estate is a provincial matter. So depending on how they’re going to implement things like criminalizing blind bidding, I don’t see how that’s going to help. Like that’s not really the problem. The problem is supply. Whether you’re going to ease up on the red tape of bringing things in or development charges or whatever it is so that you could just bring more houses online. That’s just going to help, right? If you have twice as many houses that are for sale, all of a sudden the average prices is going to go down because it’s just purely supply and demand economics.
Chris: [00:06:00] Right. It is as simple as that. So there’s nothing from a political side. Whatever they’re saying, changes to mortgage rules, changes to foreign buyer rules, or blind bidding where, or the removal of blind bidding to make it an open kind of auction marketplace to buy a house. None of that’s really going to address the underlying factor here, which is that we’ve got a growing population and not enough supply. I mean, it’s as simple as that.
Lawrence: [00:06:27] Yeah, I mean, I suppose that. I mean, if you, if you go back to when they introduced the foreign buyers tax in 2017, prices basically dropped about $200,000 overnight because on April 20th, 2017, they said that, you know, all the evil foreign buyers are buying up all of our real estate and that’s why we can’t afford anything. But that was not true. As you can see, we’re just back on track again, so temporarily just kneecapped all the homeowners by about 200000. And if you’re talking about the detached homes in Toronto, we’re talking average about $400000 overnight. People who had homes that were worth 1.6 million, you know, by August, it was worth 1.2 million and eventually just climbed back up. But during that time, because they decided to introduce some random laws, I don’t think it really helps. I think I think what they really need is to have a lot more consultation with the industry leaders and organize real estate to figure out what is the best solution. I guess just, it just seems like a very kneejerk reaction. Oh, we’ll just do this, we’ll just remove blind bidding. We’ll just, you know, bring some houses online, we’ll just, you know, whatever it is that they’re doing. It just seems like a very simple solution for a complex problem. And I don’t know if they’ve really fleshed out the idea.
Chris: [00:07:36] Yeah, that, that to me, sounds like politics being very… like a political matter. It sounds, sounds big and grand, but it will get people’s attention because of the headline, but it won’t address the root problem. Lawrence, that was very helpful. I really appreciate that, that insight in the conversation today. If anybody would like to get in touch with you to talk about Toronto real estate, I know you’re, you’re based in Mississauga and Oakville. What’s the best way for somebody to reach you?
Lawrence: [00:08:13] Oh, you can find me online at Lawrence Mak dot com, or my number 416-276-4895.
Chris: [00:08:19] It’s right there at the top of the of the slide there.
People are moving back to Toronto
Lawrence: [00:08:23] The slide on Toronto condos, which I’ll quickly go through. Sorry, average price point in Toronto condos was about 720. As you can see, it’s been about flat for the last few months. But it’s still above from last year. And again, it’s expected to pick up.
Chris: [00:08:39] Yeah, and that was a big, big talking point, as well, is that, oh, condos were crashing. People weren’t downtown. Surprise, surprise, we’re back right?
Lawrence: [00:08:47] I mean, they were, right? This is code for last year, I mean, and basically you can see that the average value in the condos crashed. And then as we go back to this year, it’s been steadily increasing and I’m seeing a lot more life in like, the rental market, downtown as well. That’s going up as well. So it just seems like everyone has a lot more consumer confidence and they’re just moving back downtown and getting back to normal.
Chris: [00:09:11] Yeah. Well, I live in the city and, this was the long weekend, and it was, it was buzzing. You know, it didn’t, it felt like pre-pandemic for the first time, in my opinion, you know, with the airshow going on and everything. So it was good. Listen, Lawrence, thank you again. For anybody watching, please reach out if there are any questions, if you want to list a home or find out more about maybe what your home might be worth if you want to list or how to get into the market. Lawrence is a great guy to talk to. Always appreciate your insight, Lawrence. Have a great week. We’ll talk to you in a few months.
Lawrence: [00:09:46] Thanks, Chris much. Much appreciated. Bye bye.
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