Toronto is resilient but the July 2020 GTA real estate market is still a mix of good, bad, and ugly…
We sit down to talk with Lawrence Mak, a real estate broker from RE/MAX Realtron Realty Inc., to talk about the July 2020 GTA real estate market.
Here, we’re talking more about the July 2020 GTA real estate market.
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:00] I’m joined by Mississauga realtor Lawrence Back, and we’re going to talk about the July real estate numbers in Toronto that were just released yesterday, fresh off the press. Lawrence, tell me three words to describe Toronto’s real estate in July.
Lawrence: [00:00:16] Thanks, Chris. The three words I’d go first, the good, the bad, and the ugly.
Chris: [00:00:20] All right. I like that nice and simple. Well, I got to ask you then and what was good about it. You have some numbers to share.
Lawrence: [00:00:27] Yeah, I do. Give me a second. Let me check it out.
Chris: [00:00:32] Awesome.
The Toronto Real Estate Market is Strong
Lawrence: [00:00:33] Well, the good news is that the real estate market has been booming. Obviously depends on which side of the equation you’re on, whether it’s good or bad for your buyers. Now, that’s great. But in terms of the numbers, sales last year, 11,081 sales, that’s up 30 percent from last year. The average price is $944,000, which is up 17-percent from last year. And even condos average $683,000, which is up 9-percent from last year. So it’s really been very, very good. The main reason for that is because the best as we can tell all the March, April, and May volume that would have normally gone through. But because it was shut down a bit because of COVID seems to be a backlog and now it’s coming out in June and July.
Chris: [00:01:17] Right. Right, and you can see that trend from the previous year. It looks like we’ve kind of shifted everything over slightly. So what’s in store for the future is the big question mark, isn’t it?
Lawrence: [00:01:29] Yeah, for sure. It’s really hard to say whether or not this is kind of like the new fall market or just a stunted spring market and then another fall market’s going to go after that. No one has any idea. But right now, as it looks like, it’s just really chugging along really quickly.
Chris: [00:01:45] So that’s good if you’re selling, I would imagine. This is a double-edged sword. What happens if you’re buying?
It’s a tough time to be a buyer in Toronto
Lawrence: [00:01:52] Yeah. So if you’re buying, the bad news is there are no more deals. Typically, if you’re looking for a balanced market, you want four to six months of inventory. What inventory means is that if the if no one else is listing any new houses, then that’s how many months will take for you to go through the inventory. So typically four to six months is a balanced market. Right now, as you can see, most of the months of inventory are two months or less. And that just means it’s a seller’s market. And this is between all the different reasons in the GTA, all the different types of houses such as condo apartments, townhouses, semi-detached, and detached. We’re talking these are the different areas, Peel, Durham, Hilton, York. It’s not as good for buyers.
I mean, people who are looking for a super deal and it doesn’t exist anymore. Maybe those pockets once in a while. But we’re talking, you know, set a price, which means that someone listed for $800,000 you’re pretty much selling at $800,000. Days on market, we’re talking about three weeks or less. So that means within two or three weeks they are being sold.
Act fast if you’re a buyer
Chris: [00:02:51] Yeah, that’s amazing. So you got you’ve got to act fast if you’re a buyer. That’s what we’re seeing on our side.
Lawrence: [00:02:56] Pretty much, make sure you get pre-approved, make sure you get all your paperwork ahead of time, make sure you have your deposit check ready. And then when you find the place that you need, just go into it.
Chris: [00:03:05] Yeah, absolutely. Unconditional offers on financing. No luxury of a conditional offer.
Lawrence: [00:03:10] Yeah, it’s it’s very difficult to do that. It’s a little easier usually in the detached realm, maybe around the 905, it’s a little bit easier to put in some conditions. But on the multiple offer situations. Again, it’s, it’s like normal. You want to just go in really strong and really high.
The rental market is ugly
Chris: [00:03:29] Well, we got the good we’ve got bad, talk to me about the ugly.
Lawrence: [00:03:33] The really ugly stuff is the rental market. It’s been a mess. It’s a very difficult situation for everybody. There’s been a new bill that was introduced, Bill 184. It changed a few of the laws, specifically increased the penalties for landlords and a bunch of other stuff. And it didn’t make it that favorable for landlords, but similarly for the tenants. They’re also reopening the hearings so that you can start to evict again and that’s not fair for the tenants.
In terms of the statistics, the number of leases, 7,320, which is down 25-percent from last year. Well, actually last quarter of last year Q2, and the average price, $3,393, which is down 6-percent from the same quarter from the previous year. So basically the rental market has loosened up a little bit. Before there were a lot of multiple offers in terms of the renters now, it’s a little bit easier for the renters, but still, it’s really hard on both sides of the equation because from the tenant point of view, maybe you’ve lost your job and you can’t afford the rent anymore. But similarly, from a landlord’s point of view, if you don’t get the rent coming in, you can’t pay for your mortgage. And so everybody’s not doing great.
It’s a difficult time for everyone
Chris: [00:04:39] Yeah, I can imagine. And then compounding this, you have the issue of Airbnb tourism shutting down the Airbnb are not renting out, you know, so now those are turning into long term rentals. So, the quantity of rentals must be way up as well. The volume available listings.
Lawrence: [00:04:56] Exactly. There have been articles where all of a sudden in a particular building. There are about 100 hundred rentals going up, 100 listings, so because Airbnb exactly what you said, there’s a lot less tourism. And so because of that, the Airbnb owners now have to figure out what to do, whether they sell it or they’ve got to convert it to a long term or rental situation, in which case the market is opening up a bit more for that so that there are more options for the different renters.
Chris: [00:05:21] Well, that certainly does sound ugly. So there you have it. The good, the bad, the ugly for the July real estate market. Lawrence, If somebody wants to get in touch with you, what’s the best way?
Lawrence: [00:05:33] Well, I should be all over social media, but you can find me at lawrencemak.com or you can call me anytime 416-276-4895.
Chris: [00:05:41] Thank you, Lawrence. Again, my name is Chris Moulder with Tridac Mortgage. If you need to get in touch with me i’m just a phone call or click away. See you soon, thanks again, Lawrence, for joining us today.
Lawrence: [00:05:53] Thanks Chris, talk to you soon.
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