September 2021 TRREB numbers review
We recently sat down with Philip Kocev, broker and managing partner at iPro Realty, to discuss the TRREB numbers for September. We chat about the current real estate market in the GTA, and where the trends may be leading us heading into 2022. Join us for the full discussion below:
Philip Kocev’s contact info:
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:01] Welcome everybody, it’s Chris Molder here from Tridac Mortgage, and I’m sitting down with a very special guest. I’m very pleased to be joined by Philip Kocev, broker and managing partner at iPro Realty. Philip, good morning. How are you?
Philip: [00:00:18] Good morning. Thank you. Doing well.
Shrinking supply in the GTA
Chris: [00:00:21] Good to see you. Well, I want to get your take on the freshly released TREB numbers for the month of September, and I think there’s some, some interesting trends to discuss. Perhaps not so surprising, and I’m really curious to get your take. So I’m going to do a quick screen share here, and tell me, what are we, what are we looking at? I guess the first thing that I see here is this month of September that home sales are up slightly versus August, but down versus last year. What’s going on?
Philip: [00:00:56] Yeah. So when we see that, you know, a couple of things, really. Last year, of course, September we were were making up – September, October, November – we were making up for a bunch of sales that didn’t happen earlier in the year. So naturally, last fall was, was much more active than we would normally see in the fall season. So it wasn’t surprising to see that September sales were down, and I think it was about 18%. However, when you look at the number of listings that we had to deal with in September, those listings are down about, I think it’s 34% from last year. So it’s, it’s showing that we are still seeing a shrinking in the supply. And so buyers are out there, but the supply still isn’t quite there to meet that demand.
Chris: [00:01:50] Right. So what what we’re seeing from these numbers is sales are down versus last year – the volume of sales, the number of transactions. But most significantly, what’s selling the story is the number of new listings because they’re down almost 30%, one third less listings this September versus September of 2020.
Philip: [00:02:11] Exactly. And that also isn’t surprising to us because when you look at your, your numbers there, March, April, May, look at, you know, the number of listings that we had at the beginning of this year compared to even, you know, that, that four year graph there. So we had a lot more activity in the first half of the year. And you know, of course, there’s only going to be so many people that are, are switching properties in a year. So it’s natural that towards the end of the year, you’re going to see less listings. So we’ll, we’ll be really watching carefully to see, how does demand align with that? Is our is our demand still that much stronger? In which case, you’re going to continue to see, you know, that, that really strong price growth that we’ve been seeing, you know, which is, which is interesting, you know, sort of, sort of thing to look at as well.
Low supply is fueling price growth
Chris: [00:03:04] Right. Because here I see the sales to new listings ratio. And so I see a very definite trend here that we’re floating somewhere, I guess between, it doesn’t show you here on the chart, but 75% and 80% for 2021. So meaning that, is it fair to say if the sales to new listings ratio is 80%, that 80% of new listings will sell? Is that…?
Philip: [00:03:33] Yeah, it’s, it’s a tightening of that, of that supply and demand curve. So the higher the number, the more listings that are selling that are, that are on the market. So that starts to show that there’s less choice out there or more buyers. Yeah. So it’s either that listings are going down or buyers and demand is going up.
Chris: [00:03:55] Right. So when you have demand going up and supply going down, what ends up happening?
Philip: [00:04:01] Of course, you end up what we’ve been experiencing for many, many years and waiting to see whether or not that is going to shift at any time. And so, yeah, not surprisingly, all those sales are down and and some people suggest, you know, look at that number and say, oh, 18% down in sales, that means there’s a shift in the market. But yes, when you look at the fact that that means that what meant less listings, that has led to an increase in price year over year. And that trend is something that we’ve continued to see, obviously. And that really, and I know it’s something that all realtors in our industry have been saying for a long time. It’s supply, supply, supply. And the reality is that’s when you see this kind of price growth.
Chris: [00:04:51] Right, right. And if we look at this chart here, average resale home price for the month of September, one thing stands out, and that it is the highest it’s been, I guess, historically because we’re looking at the last four years and every year just keeps on pushing new boundaries. So we’re at a new record. It looks like it’s well over 1.1 million at the moment.
Philip: [00:05:17] Yeah. And that’s that’s our, our GTA sort of average. But even in, in the city of Toronto, we’re around that 1.1 average price. So yeah, that is unlikely to change, you know, in the near future, if that supply continues to remain as tight as it, it has been these, these last few years.
2022 will be active for real estate
Chris: [00:05:39] Yes. Well, and that’s, that’s my question here because, you know, as your clients, I’m sure, ask you all the time is, well, what do you expect to happen in the future? Should I jump into the market now? Should I wait? Are we expecting prices to come down or supply to go up? I guess they’re all interconnected. So with the remaining minute, minute and a half that we have here, what’s your hot take on where we expect things to go? I guess we’re talking about 2022 calendar, 2022 now.
Philip: [00:06:11] Yeah. And I mean, of course, if I had that crystal ball, that would be awesome. But by past experience and you know where, where we’ve been, you know, the reality is if interest rates continue to stay low, which is, you know, expected and we look to to folks like yourself to help guide us on on that. But the other thing is that, you know, we do keep forgetting that a lot of the sales that happened in the last 18 months have been domestic sales. We haven’t had immigration open, so we don’t really, we have yet to enter a post-pandemic market. So we don’t really know what’s going to happen in the spring if we get full force ahead and immigration opens. We have, you know, schools, international students back, consuming our rental units. So if those things start to happen next year, which is what everybody would hope and like to, then you’re going to see a very active spring next year. And if this is the kind of supply that we continue to see, then you’re going to start to see some, some heavy competition again between buyers next year. So yeah, I would say if you’re in the market to try and buy you, you know, probably have as good as you can get right now because it’s, it’s not necessarily a crazy frenzy. Rates are good, but you know, watch it carefully because we probably will have a very active year next year.
Chris: [00:07:39] Yeah, that’s that’s great insight and and a great point. We aren’t really back to business as usual, and if we already have supply and demand issues, what’s going to happen when we open up to the world post-pandemic? Great points. Phil, thank you so much for joining us today. If anybody would like to get in touch with you and anyone at the iPro team, can you talk to us a little bit about iPro and how they can get in touch with you?
Philip: [00:08:07] Sure. So iPro is one of the largest independent brokerages here in the GTA. We have 14 offices in different locations and nearly 2000 realtors, so we’d be happy to help clients out. And you can visit our website at iprorealty.com and reach out to any of our locations.
Chris: [00:08:29] Awesome. Phil, thank you so much. Have a wonderful Thanksgiving weekend, and we’ll see you again soon.
Philip: [00:08:35] Thank you, Chris. You too.
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