Key points:
- Buyer sentiment and confidence is up, coinciding with the end of the Bank of Canada’s rate hike cycle.
- As the spring market gets into full swing, we are seeing an increase in inventory, buyers, and housing prices.
March 2023 TREB Review
In this video, I chat with Mississauga realtor Lawrence Mak about the newest TREB numbers. We chat about recent housing trends in the GTA, where things are headed this spring, and how the Bank of Canada has influenced today’s activities.
Lawrence Mak’s contact info:
Phone: (416) 276-4895
Website: lawrencemak.com
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:00] Welcome, everybody. I am Chris Molder, Toronto mortgage broker, and I am joined today by my good friend and realtor in Mississauga, Lawrence Mak. How are you, Lawrence?
Lawrence: [00:00:11] I’m awesome, Chris. How are you doing?
Chris: [00:00:13] Good, good. Nice to connect with you. It’s early April at the time of this recording and we just got the March real estate numbers released from TREB yesterday. And I always look forward to these conversations with you because you have some good tidbits. So what is going on in the Toronto real estate market? I hear things are starting to pick up. What are you seeing in the data? Things you have to share with us?
Buyer confidence is up in Toronto
Lawrence: [00:00:37] Things are picking up a lot here in a lot of multiple offers all over the place. Yeah. So, you know, I think the buyer sentiment and confidence is up, at least in the short term.
Chris: [00:00:48] Yeah. And you know, and that’s not a coincidence because I think it coincides with rates starting to reach their threshold. Yeah. The Bank of Canada didn’t increase in the month of March for the first time in 12 months and we are slowly, very slowly starting to see fixed rates start to edge their way down. And I think that’s helping buyers come to market with more confidence. Would you agree? Is that what you’re seeing?
Lawrence: [00:01:16] Oh, 100%. I’m pretty sure that’s what’s happening, at least for the past couple of months. And then once they didn’t raise rates in the last rate announcement, things got a little crazier.
Chris: [00:01:26] Yeah, a little a little more heated. Very good. Are you going to do a screen share with us? Do you have some some things to show us?
Lawrence: [00:01:32] Yeah, hold on a sec. All right. So this is the quick snapshot of the market report from from the last month. This is just Toronto in terms of the city of Toronto and not all of the GTA. Okay. But to give you a quick snapshot, it looks like all the prices went down 11% from last year, 18.3% for semi-detached, that kind of stuff. Right. But that doesn’t give you the whole picture. So I’ll just give just.
Chris: [00:01:57] Can can I pause you there on on that slide? So this is just for clarification. This is March 2022 to March 2023. So we’re looking year over year, March.
The spring market is in full swing
Lawrence: [00:02:06] Year over year. And so that’s why I wanted to show the next slide. So right now, you know, some of the media might tell you everything’s going down, that kind of stuff. But if you look at the next slide here, so this is this is the high point of last year, February, March. And this is basically right when the rate hike started. Yep. So it was crazy last year at the beginning, January, February, and all of a sudden, oh, no. Right. Interest rates are going up. And so that’s roughly what you’re going to see for the big drop here. Okay. But if you look at this is the end of last year and then this is this year. Yep. As you can see, there’s a lot of more buyer confidence and the average price is going up.
Chris: [00:02:43] Right? So when I look at this, what I’m seeing is the bottom of the market happened already. Potentially.
Lawrence: [00:02:51] Yeah. That that’s sort of what I see as well.
Chris: [00:02:54] Which coincides with probably December. January would would have been the bottom of the of the market if you were trying to time it.
Lawrence: [00:03:01] Yeah. Something like that. And then basically we’re we’re pretty much you know in well into the spring market. Yeah. As you may or may not know or as your listeners may or may not know, there’s usually two different well, there’s four different seasons of real estate. And the most important one is the spring market, which is when the weather starts getting warmer and everyone starts getting happier and people start buying stuff. So as you can see, basically every year you’ll see there’s a spike during the spring, right? Sometimes this longer than others, sometimes are shorter. But basically we’re starting the spring market. And so that’s why you’re going to see more inventory come out, but a lot more buyers and a lot more average sales price.
Chris: [00:03:40] Right. So there’s a seasonality to this as well before we can claim victory that prices are going up.
Lawrence: [00:03:45] Definitely for sure. So from a month over a month basis, it is going up. But again, the media will say that things are going down. But again, they’re using this data point, which is last year, which was quite high. Um, I’ll just quickly go through some other ones. For example, this one is Mississauga Detached Home. Same thing. So detached homes in Mississauga took a pretty big hit last year, at least is making a rebound now. So that’s good. So Oakville. Oakville is doing quite well, over the last couple of months. This is detached homes. Yeah.
Chris: [00:04:18] Quite different from Mississauga, isn’t it?
Rental prices continue to increase
Lawrence: [00:04:21] Yeah. Well, I mean, they’re kind of similar markets, but they’re both the detached suburb market kind of thing. Right. And you can see that buyer confidence is up there. Yeah. And these are the condos. So this is the Toronto C01, which is just basically downtown core in terms of the condos. And then it gives you an idea here again, this is the peak. This is the drop from last year. And then this is where we’re at now.
Chris: [00:04:46] Right,11%.
Lawrence: [00:04:47] So everything is good. And the last thing I’m going to go through actually was the rental market. So the rental market, this is also Toronto, C01, which is downtown. Um, on average, the prices for rentals have gone up quite a bit. You know, almost 20% for 1 or 2 bedrooms. This is from last year. Again, this is the readings from the last quarter. So that would be Q4 of 2022. You don’t have the numbers for Q1 yet, which come out shortly, but we don’t have them yet. And as you can see. Uh, for these are the three bedrooms. There’s also a -16% drop from last year. But this is clearly a big spike. But in general, you see that the average rent rate is going up. And I think this is very important for all the people to understand because the interest rates are, were going up a lot. A lot of first time buyers couldn’t afford their actual first home. And then so what ended up happening is a lot of them ended up renting, which means that the rental market started to heat up quite a bit from last year. And so we’re seeing that a lot with a lot of multiple offers and a lot of activity in the rental market. Yes. And I expect that to continue for the foreseeable future until either interest rates go down or until I guess, you know, in the short term, if interest rates stop going up, then everybody has the confidence to maybe start buying and then maybe they can make that plunge. It may not mean the borderline people can’t afford it because the interest rate go up, but there are other people that could afford it. Maybe they just were a little gun shy and now they feel a little more confident.
Chris: [00:06:20] Yeah, I think there’s there are a lot of fence sitters, aren’t there?
Lawrence: [00:06:25] I think so, yeah. That’s that’s my gut feeling. Even right now with my own business, it feels like there’s a lot more buyers who feel more confident that they can, you know, sustain the if there’s other interest rate hikes or sustain the mortgage payments in the future over the next 3 to 5 years kind of thing. But previously last year, they were all quite, quite scared.
Need more help or information?
Chris: [00:06:47] Yeah. Yeah. I think it’s just a question of confidence and we’re establishing a new normal now with, with where interest rates are trending. And, and I think perhaps I get the feeling that the worst of this downturn is behind us. And I don’t expect that things are going to accelerate quickly to where they were March of last year, February, March of last year, which was the peak. But but certainly more confidence will build in the market. Listen, Lawrence, thanks very much for for joining me on this call today. Always a wealth of information. Look forward to the next one. If anybody wants to get in touch with you, what’s the best way?
Lawrence: [00:07:27] Call me (416) 276-4895 or come to my website, lawrencemak.com.
Chris: [00:07:33] Right on. Thanks again, Lawrence. My name is Chris Molder. Until next time. Bye for now.
Lawrence: [00:07:39] Bye.
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