How Do We Solve Toronto’s Rental Crisis?


Or if you prefer a debate before the debate, let’s start with, “Does Toronto have a rental crisis?”

Friday’s blog about the compensation paid to tenants upon legal eviction from a landlord resulted in a few different conversations about the state of the rental market, so I’d like to continue on that theme today.

There has been a lot of press lately about the “crisis,” and I’d like to draw your attention to one group who is actively lobbying somebody to fix the problem…


There’s a bit of a “chicken and the egg” phenomenon when it comes to the intersection of rental prices in Toronto, and the increasing price of downtown condos.

Despite the constant talk in the media of an unstable Toronto real estate market, my investor clients are coming back in droves.

Specifically the clients who are looking to purchase 1-bed, 1-bath condos, and rent them out long-term.

You might think that with the recent legislation, much of which we discussed last Friday, that many investors would be turning the other way, or even downright scared of becoming a landlord.  But there’s one thing that’s keeping them in the market, and making many want to become even more active: the increasing rents in Toronto.

I’m absolutely shocked at the rents out there right now.  Just flabbergasted.

A 495 square foot, 1-bed, 1-bath, with a balcony, no parking, and a locker.

How much?

Any ideas?

How about $2,150 in King West.

It’s just shocking.

And thus my investor-clients see the increasing rents, which increases the capitalization rate and return on investment for any given property, and the investment becomes even more attractive.

So are the condo prices going up in response to the higher rents, as demand surges among investors?

Or are the rents increasing as prices go up, since investors need to cover their costs?

Because of the recent implementation of rent controls, I don’t think investors are able to increase rents, freely, to cover their costs.

Ironically, I think if I had to choose the chicken, or the egg, I’d say that more people are buying because the rents are so high, than charging higher rent because of the price they paid.

And if that’s the case, then why are rents going up?

Call me predictable.

Call me naive.

Call me simple.

But once again, the answer is, our good old friend, supply and demand.

The demand part, we know.

People want to live downtown, whether it’s because they’re working longer hours and have less time to travel, or they want to ditch the car and avoid the commute, or there’s a movement among millennials to get out of their parents’ homes sooner than the previous generation.

The city population is growing, especially downtown, and the demand has never been higher.

But the supply has also never been lower.

And it goes without saying that increasing demand, and decreasing supply, is a recipe for disaster in any market.

The unintended consequences from the Liberal government’s “Fair Housing Plan” announced in April were many, but interestingly enough, the one that was the least predictable, and seems to be having the most effect, is the decline in rental units coming onto the market.

Instituting rent controls, theoretically, at least, should massively increase the time that the average tenant stays in one place, meaning there are fewer units coming back onto the market.

But more importantly, the rent controls make developing purpose-built rentals far less attractive to developers.

I’ve been saving articles on the rental market in Toronto for the last few months, and I find the trend rather interesting.

*June 13th, 2017 – “Developers Call For Changes To Ontario Rent Control Measures”

This was when we first started to hear about developers maybe looking at their purpose-built rental projects, and wondering whether or not it would be worthwhile to convert them to condos.

Ironically, it was the CEO of the Federation of Rental-housing Providers of Ontario (FRPO), Jim Murphy, who spoke out against the rent controls.

You would think the FRPO would be in favour of rent controls, but they can actually see the fores through the trees.  They know what can happen if the government institutes a cap on rent increases that makes it unattractive for long-term investments among REITs looking to build rentals.

Mr. Murphy actually suggested that the cap be somewhere in the 10% neighbourhood, rather than 2.5%.

*September 13th, 2017 – “Toronto To Get 2,000 Market-Rent And Affordable Units”

This was a Toronto Star article about the City of Toronto’s decision to sell four pieces of land – two in the West Don Lands, one on Grosvenor Street, and one on Grenville Street, and mandate that they must be used for market rent and affordable housing.  The city seems to be patting themselves on the back, making it known that they would sell for more if there were no restrictions on the use of the lands.

600 of the 2,000 units will be “affordable,” and the other 1,400 would be market-rent.

1 in 10 of each unit will be “designed for large families.”

It’s important to note that there are 181,000 people on the wait list for affordable housing.

*September 25th, 2017 – “1,000 rental units cancelled because of Ontario rent control, new report finds”

Here’s where we started to see actual evidence of would-be, purpose-built rentals, changing course and becoming condominiums instead.

The “report” referenced gave us this headline about cancelled rental units, but perhaps an even more alarming stat, which the next story shows.

*September 25th, 2017 – “New study finds Ontario’s rental housing supply is facing a shortfall of over 6,000 units per year to meet annual demand”

This story appeared everywhere, and was picked up by every online news outlet.

With a headline like that, who doesn’t want to read it?

The report, completed by Urbanation, was commissioned by the Federation of Rental-housing Providers of Ontario (FRPO), who I’ll tell you more about shortly.

*October 9th, 2017 – “Rising Prices And Evictions: Toronto’s Housing Market Has ‘Gone Bonkers’”

This was a Globe & Mail piece with some “faces and names” to put to the stories we hear so often about just how expensive rents are getting.

One of the people profiled in the article is a “normal” 39-year-old woman, who spends 46% of her salary on rent.

Expect to see a lot more of these types of stories.  Just as we saw this kind of angle when the housing market for sales was red-hot, this makes for a great read among a host of people who can relate to the topic.

*October 12th, 2017 – “Toronto’s Rental Market Is Downright Scary Right Now”

This isn’t really an “article” per se, but rather 150 words on BlogTO about a very important study released last week by Ryerson University.

The study is called “Getting to 8,000” with a subtitle of “Building a healthier rental market for the Toronto area.”

If you’re wondering why that 8,000 number is significant, it’s because you saw the number “6,000” per year a few articles ago.

Recall that the Urbanation study showed a housing shortfall of 6,000 units per year.

The Ryerson study is recommending that the city and province strive to see 8,000 new rental units built per year.

If you have time, read the Ryerson study, which you can find HERE.

It’s 40 pages long, but a really interesting read, with a lot of stats and figures you’d be quoting while in line at Tim Horton’s to get your coffee.

Let me give you the Coles Notes on this.

The report offers seven public policy recommendations:

Making better use of land and existing housing

1. Municipalities introduce vacant unit taxes throughout the Toronto Area

2. Municipalities regulate short-term rentals throughout the Toronto Area

3. Municipalities adopt land-use changes to permit more residential development

Incentivizing new purpose-built market rental units

4. Province of Ontario expands and increases the proposed development charge rebate program

5. Municipalities expand incentives to all rental developments

6. Province of Ontario or the Federal Government develops an agency to provide a “one-window” service to offer development incentives

7. Federal Government makes changes to HST policy including implementing a zero-rating system to claim HST credits and the CRA’s exclusive use of the “Lending Value” and “Cost” approaches to determining fair market value when calculating self-supply HST.

There’s a lot of other good nuggets in there, such as their “Barriers” section, which references the barriers to building rentals in the city, but I need to move on here…

I mentioned the Federation of Rental-housing Providers of Ontario (FRPO) a few moments ago, and I’d like to draw attention to their public policy ideas as well.

The FRPO launched a website last month:

Be forewarned about the blinding, bright-pink background of the website that’s made my eyes sore for the last hour.

The FRPO launched this site in response to the Urbanation report (which they commissioned) back in September, but now that Ryerson has released their own report, I wonder if they’ll implement those findings as well.

Just as was contained in the Ryerson report, the FRPO’s “Rent-On” campaign offers several policy approaches to increase the supply of rental housing in Toronto:

1) Implement a new rolling exemption for purpose-built rental buildings from rent control, i.e. units after a designated date would not be subject to rent control to encourage new investment. The NDP government of the early 1990’s first introduced this concept.

2) Modify the rent increase guideline applicable to new purpose-built rental buildings (i.e. not condominium registered) to inflation plus a certain percentage. This formula, will provide the modest investment return necessary to ensure continued growth in the supply of new, purpose-built rental housing, while respecting the Ontario Government’s intent to assure tenants have reasonable, predictable rents they can afford. • Rental housing needs fairness in property taxation.

3) Rental buildings can be assessed at up to 3 times a single-family home. The government of Ontario has introduced property tax fairness for new purpose-built rentals, but all multi-res rental units need to be assessed at the same rate as single family homes province wide. By legislation, savings would be passed along to tenants.

4) Some municipalities have introduced municipal licensing fees for rental units. There should be no new taxes on industry that could act as a disincentive to build new supply. Further, Ontario municipalities should implement programs that waive development charges and building permit fees for new purpose-built rental. Vancouver has a similar program already in place.

•Rental housing providers should be given the option to sub meter electrically heated units like they already can for other forms of hydro so that high energy users bear the increased cost of usage, while energy-efficient tenants would be rewarded with lower bills.

5) Maintain vacancy decontrol. Since 2012 in Ontario over $5.2 billion in renovations of rental units have taken place as a result of this measure to improve living quality and maintain our purpose-built rental housing stock much of which is 35 years or older.

Some of the same ideas, and some new.

But I think you’re getting the picture here: put enough people in a room, and you can come up with a list of ideas on how to increase the supply of rentals in the city.

So my obvious question at this point: what do you think?

And before we get to the conversation about how to increase the supply of rental units, feel free to take a step backwards and offer an opinion on whether or not this is even an initiative that needs undertaking.

The post How Do We Solve Toronto’s Rental Crisis? appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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When Does A Landlord Need To Provide Compensation During An Eviction?


There is a LOT of incorrect information floating around on this topic, and as a result, buyers and sellers in the real estate market are misinformed.

Many are making mistakes, as evidenced by the clauses we’re seeing included in offers dealing with compensation for tenants who are being evicted upon the sale of a unit.

Let’s take a look at “Form N12” which clearly specifies when compensation applies, but first, we’ll trace the legislation back to where it began…


In case you’ve been living in a cave…………on the moon………………with your eyes closed and your hands over your ears (Simpsons quote, I believe?), you’ve heard about the Liberal government’s “Fair Housing Plan” and the associated changes to the Residential Tenancies Act.

There are many notable changes, but the one I want to explore today is regarding the compensation for tenants who are legally evicted.

Once upon a time, a landlord could serve a tenant, who was on a month-to-month term, with Form N12, and evict the tenant for “personal use.”

We all know that “personal use” clause was a farce.

Tenants all over the city would say that their brother, mother, or sister was going to move into the unit, and then simply re-rent it, or put it on the open market.

Going back a few revisions ago, the “personal use” clause wasn’t even detailed on the Form N12.  The form used to be a lot simpler, and a lot easier to manipulate.

After stories broke in early 2017 about landlords increasing rents by 80%, and during the real estate boom/crisis/peak/insanity, the Liberal government decided they needed to step in and make things more “fair.”

Enter: The Fair Housing Plan, much of which was deemed, by people who own real estate, to be unfair.

The Liberal government was very, very slow to detail what they had planned.

Their “16 Point Plan” contained few specific measures to be implemented, but rather made references to areas that would be explored, committee’s that would conduct studies and provide findings, and the usual government red-tape rhetoric.

The section regarding “protecting renters,” specifically their #3 point of sixteen, referred to legislation, but made no specific promises:


“Introduce legislation that would, if passed, strengthen the Residential Tenancies Act…”

It looked as though, as was the case with most of the points, nothing had firmly been decided.

“Adequately compensated” could have meant absolutely anything, and of course, the government could have just ignored the whole idea, and moved on.

But in September, they implemented the “adequate compensation,” which was determined to be a full month’s rent:


Many of us were shocked.

Fair or unfair, perhaps it’s a topic for another day.

But the penalties – up to $25,000, would surely scare away any landlords that thought about trying to play outside the rules.

But somewhere along the way, the market and its participants – landlords, tenants, buyers, sellers, real estate agents, and even lawyers, became confused about when the compensation applies.

This idea that “Once a tenant is in the unit, you can never get them out” began to circulate, which simply wasn’t true.

The mistake at hand, is predicated on the idea that ALL tenants must be compensated during ALL evictions, and that’s not the case.

Bill 124, Rental Fairness Act, 2017, contains amendments to the Residential Tenancies Act, 2006.

You can read the bill in full HERE.

Scroll down a few paragraphs, and you’ll see the following:

Notice of termination by landlord under section 48

Currently, subsection 48 (1) allows a landlord to give a termination notice if the landlord requires possession of the rental unit for the purpose of residential occupation by the landlord, a member of the landlord’s family or other specified persons.  Under subsection 48 (1), as amended, the landlord must require possession for the purpose of residential occupation for at least one year.  Under new section 48.1, a landlord who gives a termination notice under section 48 is required to compensate the tenant in an amount equal to one month’s rent or to offer the tenant another unit acceptable to the tenant.

Notice what isn’t present there?

Anything about the buyer of the property paying compensation.

The new “Form N12” is exactly the same as the old Form N12, save for the inclusion of the highlighted box below:


Notice that “Reason 1” is bolded.

What is reason 1?

Refer back to the first page of Form N12, and you’ll see two reasons, as follows:


Notice that Reason 1, refers to ending the tenancy so the landlord and/or family can occupy the unit.

Reason 2, refers to ending the tenancy because the landlord is selling the unit, and the buyer intends to occupy the unit.

Here’s where the confusions sets in for many people.

Because while I see this as pretty cut and dry, I’ve spoken to tenants who believe they need to be compensated when the unit in which they reside is sold, and they’re provided with a legal eviction on behalf of the buyer.

I’ve also spoken to a lawyer who believes that “all month-to-month tenants being evicted” need to be compensated, and who suggests that this Form N12 is flawed!

Is it possible that this is what the Liberal government had first intended?

Because from where I stand, the seller of a condo, with a month-to-month tenant, shouldn’t be punished for wanting to sell his or her asset.

But maybe it doesn’t matter if it’s the current owner who is evicting, or the future owner who has contracted to purchase the property.  An eviction is an eviction, right?  And the government is trying to help evicted tenants, correct?

I’ll be very interested to see if there are any cases at the Landlord & Tenant Board in this regard.

There are so many people out there that are under the impression, either because it’s what they’ve heard, or what they feel is just, that ALL tenants are due compensation regardless of the situation, that I almost feel as though the legislation is unclear.


But if you’re a landlord, make sure you know what the Form N12 says!

The post When Does A Landlord Need To Provide Compensation During An Eviction? appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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Urban Living Downtown Townhouses | Pick5



The post Urban Living Downtown Townhouses | Pick5 appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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Hot Loft of the Week: 1 Columbus Ave #201


Welcome to One Columbus Ave!

These lofts were developed by Jackson Goad Architects and it was registered in March of 1997.

It has 4 storeys and 10 units, and it is self managed.

This loft is gorgeous, comes with brick walls, private elevator, oversized windows, 10ft high wood ceilings, metal beams, and heated concrete floors.

The only downside here is that it’s only 1 bed, and 1 bath.

Let’s take a look!

Price: $1,799,000

Taxes: $4,563.71/2017

Bedrooms: 1

Bathrooms: 1

Maintenance Fees: $664.63

SQFT: 1400-1599

Parking: Yes

MLS: W3952159

W3952159 W3952159_2 W3952159_3 W3952159_4 W3952159_5 W3952159_6 W3952159_7 W3952159_8 W3952159_9 W3952159_10 W3952159_11 W3952159_12 W3952159_13 W3952159_14 W3952159_15 W3952159_16 W3952159_17 W3952159_18 W3952159_19 W3952159_20

What do you think about our Hot Loft of the Week? Yay or Nay?

The post Hot Loft of the Week: 1 Columbus Ave #201 appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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Hot House of the Week: 94 Eileen Avenue


Welcome to Lambton!

Completely rebuilt smart home.

Bright and airy with 10ft. ceilings, and heated floors.

It has a separate entrance to the basement, and it is made out of aluminum siding and wood.

Comes with an above ground pool, three parking spaces, pool shed, and a timed lighting system.

Let’s take a look!

Price: $879,999

Taxes: $3,543.06/2017

Bedrooms: 2 + 1

Bathrooms: 3

Lot Size: 25 x 109 Feet

Parking: Yes

MLS: W3950380

W3950380 W3950380_2 W3950380_3 W3950380_4 W3950380_5 W3950380_6 W3950380_7 W3950380_8 W3950380_9 W3950380_10 W3950380_11 W3950380_12 W3950380_13 W3950380_14 W3950380_15 W3950380_16 W3950380_17 W3950380_18 W3950380_19 W3950380_20

What do you think about our Hot House of the Week? Yay or Nay?

The post Hot House of the Week: 94 Eileen Avenue appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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Hot Loft of the Week: 99 Coleman Ave 204


Welcome to the Coleman Lofts!

These lofts were developed by 99 Coleman Avenue Inc. and it was registered in December of 1991.

It has 3 storeys and 18 units, and it is managed by the board of directors!

It is over 950sqft of open space and has soaring ceilings and a beautiful skylight.

There is a spiral staircase that leads to the master bedroom on the second level.

Let’s take a look!

Price: $529,000

Taxes: $2,454.71/2017

Bedrooms: 1+1

Bathrooms: 2

Maintenance Fees: $445.06

SQFT: 900-999

Parking: Yes

MLS: E3950933

E3950933 E3950933_2 E3950933_3 E3950933_4 E3950933_5 E3950933_6 E3950933_7 E3950933_8 E3950933_9 E3950933_10 E3950933_11 E3950933_12 E3950933_13 E3950933_14 E3950933_15 E3950933_16 E3950933_17 E3950933_18 E3950933_19

What do you think about our Hot Loft of the Week? Yay or Nay?

The post Hot Loft of the Week: 99 Coleman Ave 204 appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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Making Sense Of The September TREB Numbers


I think a lot of you have been waiting for this; both the numbers, and my response to them.

The short of it is: the bears were wrong…..for one month, at least.

The long of it is: time could prove the bears right….because nobody knows what lays ahead.

Let’s look at September’s key real estate metrics, and I’ll share some of my own experiences from the past month, trying to navigate the difficult Toronto real estate market…


Sometimes, that’s how I feel when trying to make sense of the TREB numbers; like Matt Damon in front of a blackboard, attempting to solve a complex math problem.

I actually have no idea what the heck those symbols are.  They look like asterisks to me.  Actually, they look quite a lot like a map of airport terminals.

I think it’s been about 15 years since I had to find a derivative, or anti-derivative.

And it’s definitely been 20 years since I drew a parabola, or knew what sine, cosine, and tangent were.

Secant, cosecant, and cotangent?

My brother did a 5-year Hons. B.Math at the University of Waterloo, and I remember the textbook for one of his courses was twenty pages thick.  Twenty pages.  For an entire year.  I guess you’d spend an entire week trying to solve one problem.

There are no Fibonacci sequences in the September TREB numbers, which you can read at length HERE.

But there are a few statistics that make little sense, or that only confuse where we are in the market.

Recall my “Predictions For The Fall Market” blog post from September, which spawned a TRB-record, 202 comments.

I made one bold prediction, that I stuck to even as contrarians fumed: that the average sale price in September would be higher than that of August.

And honestly, how in the world is that to be considered “bold?”

As I said in September’s post, “This is a no-brainer.”

The average sale price couldn’t possibly dip from the $732,292 low that resulted in August.  It would have been impossible, in my mind.

Having dropped from over $920,000 in April, it just didn’t seem reasonable, in my mind, that we would see a fifth straight monthly decline in the average sale price, especially when you consider that, a) August is slow, b) September is busy.

The average sale price in September, in fact, increased by 5.6%, from August.

Recall that I took a lot of flak from people for that “Predictions” post after Labour Day, with comments like these:


No, this isn’t an “I told you so” moment, but rather I wanted to highlight another ongoing theme in this current real estate market, one that is gaining serious momentum: anger.

Read any newspaper article online in the Globe & Mail, National Post, or Toronto Star.  Any columnist who has the audacity to write a positive article about real estate gets absolutely eviscerated by the commenters.

Why are people so angry about real estate?

I have a theory, as you know.  And it’s one that a lot of you won’t like.

It’s that most market bears do not own real estate.

The folks championing this 30-40% market decline?  Most aren’t home-owners, I’ll tell you that.

The ones attacking newspaper columnists online, and hating anybody who has anything to do with real estate?  They don’t go home to their $2,000,000 detached in Playter Estates at night, I’ll tell you that too.

I suppose you could argue the opposite – that I sell real estate for a living, and I’ll continue to argue that the market is healthy, and will trend upwards, even though I’ve reiterated many times that I will sell real estate in markets up, down, and sideways.

But I’m not vicious.  The online comments for real estate news articles are downright nasty!  Why are people so mad about the direction of the real estate market, and why are they so spiteful and malicious at anything shining a positive light?

In any event, there are three key numbers I’d like to examine from this past month’s TREB numbers.

While we could look at a host of different statistics, these are the ones I find the most interesting:

1) Average Sale Price, Toronto
2) Average Sale Price, Condominium, 416
3) New Listings, Toronto

Let’s start with the one that gets the most attention…


1) Average Sale Price

As previously noted, the average sale price increased 5.6% from August to September, which I really don’t find surprising at all.

I think a lot of us realized that the August figure was artificially low, partially because it’s the second-slowest month of the year, outside December, and partially because the ratio of condos to houses increased dramatically as the spring went on (you can read more about this in my September 11th post – “Making Sense of the Drop In Average Home Price”)

Let’s see where things stand, compared to my post in September:


The 5.6% increase stops a 4-month trend in a declining average sale price.

And the decline from April to September is now less pronounced at -15.77%, whereas this number had reached -20.5% in August.

The average home price is now back up over January’s level, however the big question in my mind remains: where does it go from here?

Look at the fall of 2016 for a moment.

We saw a 6.0% increase from August to September, which is exactly in line with this year’s 5.6% increase – yet another reason why I figured the average home price increasing in September was a no-brainer.

But after that big jump, we saw only a 0.9% increase in October, and then a 1.8% increase in November, before the yearly drop-off in December – a whopping 6.3%.

It bears mentioning here, just to get sidetracked if for only a moment, that a December drop-off is normal.  That doesn’t mean your home is worth 6.3% less in December than it was in November, but rather there are very few, if any, luxury homes sold in December, and the ratio of condo sales to home sales increased dramatically.

So back to the question at hand – what do we expect for October and November?

As I predicted after Labour Day, I do expect the average home price to increase 10% this fall, which would bring it back up over $800,000.

Not quite the same “no-brainer” as the average home price increasing from August to September, but I do think it’s going to happen.

We need only see the average home price increase another 3.1% to get to $800,000, and I think that could happen in October alone, let alone by the end of November.

2) Average Sale Price – 416 Condominium

Raise your hand if you haven’t heard at least once this past month, something to the extent of, “The condo market is holding steady.”

Had I made any sort of prediction in the past few months that the housing market would outpace the condominium market, as it always does, and should, I would have been dead wrong.

Another one of my bold predictions from the past was, “Fifty years from now, only the city’s elite will own freehold properties.”

I still stand by that prediction.

Simply put, there will never be any more freehold properties built.  Maybe tearing down a bungalow on a wide lot, and building two semi-detached homes on its place gives you another one home.  But as a percentage increase, specifically in the central core, we’ll be trending pretty close to 0.00% from here on out.

About 99% of “new” housing in the core will be in the form of condominiums.

And it doesn’t take Good Will Hunting to do the math, and see how the supply-and-demand equation will affect house values.

Having said all that, the numbers for the condo market are shocking.

Let me show you the average sale price for condominiums, specifically in the 416, and compare the monthly increase/decrease to that of the overall average sale price:


As you can see, the condominium market has been far less volatile.

But the decrease has also been far less pronounced.

The December-to-April increase in average sale price was 23.9%, in line with the 26.05% we saw in the overall average sale price in Toronto.

But the decline of the latter was 15.77%, as shown in the first chart, compared to a much smaller 4.19% decline in the average 416 condo sale.

Who would have ever predicted that the condo market would outpace the housing market in 2017?

What I’m seeing out there in the condo market right now is shocking.

Not to name names, but I showed a unit to investors on the weekend – east-side, 495 square feet, original 2004 finishes, priced at $399,900.  That’s already $808/sqft, with no parking, and no locker.

But wait – there’s a hold-back on offers, and the listing agent told me on Saturday night, “I might be getting a bully offer, or two, tomorrow.”

So what does that mean?  $425,000?  $450,000?

Are we really going to see a 2004-condition condo, no parking, no locker, break $900/sqft?

Whether it “only” gets $808/sqft, or whether it breaks $900, the activity is just insane.

And it can all be traced back to the lack of product available on the market, which, of course, the TREB numbers do not show…

3) “Increase” In Listings

This is where things get really interesting.

It’s also where many people, bullish or bearish, can be seen to “make numbers say anything they want.”

The September TREB number show:

New Listings +42.9% from August
New Listings +9.4% from September, 2016

Active Listings +15.8% from August
Active Listings +69.0% from September 2016

So first of all, what’s an active listing, and what’s a new listing?

“New Listings” are exactly as you would assume – a count of all the new listings that month in TREB, including those for properties that have already been listed, regardless of month.  The “New” listings does not sort, filter, or clean the data – it’s just all new listings.

“Active Listings” refers to the number of listings on the market on the last day of the month.

And to this day, nobody can really figure out why or when one is higher than the other.  Except Good Will Hunting, but he won’t tell us the secret…

I’ve always preferred to look at the “New Listings,” and while I know double-counting properties that have been listed more than once is the drawback, I find my buyer clients don’t care about an active listing that’s been on the market for 92 days; they seek new listings that hit MLS, which we need to see right away.

So the TREB numbers show massive spikes in listing, across the board.  There are four “+” symbols above.

New listings are up 42.9% since August, which is an insane increase.  But August is slow.  It’s the second-slowest month of the year, behind December, in the minds of real estate agents (ie. the number of sales, listings, et al, notwithstanding).

New listings are up 9.4% from September of last year, which I find encouraging, since prices increased 6.0% in September of 2016, and the more listings we see, in theory, the lower the prices should be.

So where does the confusion set in?  I mean, other than trying to understand how and why the “active listings” data is so far from “new listings,” and the increases have seemingly no correlation?

Well, if you were to ask any Realtor, “Are you seeing inventory out there?” the answer would be an emphatic, NO.

There’s no inventory, folks.

I don’t care what the numbers say.  There is just nothing to sell.

I know that sounds crazy, given the TREB numbers, but I don’t work in an “on paper” market, nor do I work in a theoretical one.  I work out there, in real market conditions, and whether I have a buyer looking for a house or condo, low-end or high-end, east or west, there’s just nothing to sell them.

I made fewer for buyer clients in September than in any month this year, and I have more buyers looking than any month this year.  Do that math.

And no, it’s not because the buyers aren’t looking, or are waiting for the crash – my buyer clients are ready to buy, today, if the right property comes out.  But we just aren’t getting the listings.

Let me show you last week’s listings from Wednesday and Thursday.

On every Realtor’s MLS home page, they can customize their “listings pane.”

Mine are broken down into the areas I find I work the most, which explains why you see the five groupings below.

Here’s a shot of Wednesday’s listings:


That’s right.  On Wednesday of last week, in C09, C10, and C11 combined, which is Rosedale, Moore Park, Leaside, Davisville Village, and parts of Yonge/Eg, there were only eight new listings, and that’s for both houses and condos.


So let’s say that’s one house in Rosedale and Moore Park combined, one in Leaside, one in Davisville, then five condos at Yonge/Eg.

How many buyers are looking for houses in Leaside?  How many price points do they represent?  How does that one new listing for a house satisfy the market?

Here’s Thursday’s screen-grab:


From 28 “downtown” listings on Wednesday, to 49 on Thursday.

I’ve always told people that when the market is busy, you’re getting 60 per day.

When the market is really busy, you’re getting 80+.

When the market is crazy, you’re getting 100+.

And at certain peak times, on peak days, you can see 130-140.

So how in the world does 28, and 49, satisfy the market?

This is what I mean when I say, “There’s no inventory,” and yet we keep hearing about record inventory levels.

Let’s look at those inventory levels through the last year, and specifically look at the month-over-month increases, as well as year-over-year:


Again, if you look at the 42.9% increase in new listings month-over-month from August to September, it’s a big number.  But last month’s new listings only represented a 9.4% increase from the same level last year, which is a better comparison.

Seeing where inventory levels were in January and February certainly explains the run-up in prices.  You might argue the same for the 25,000+ listings in May.

But is 16,000 new listings “enough” to satisfy the market in a busy September?

And where are those new listings?

Why are we seeing such a dearth of new listings in the areas I track?  Why are my buyer-clients without options?

When I decided to title this blog “making sense of the September TREB numbers,” it was mainly in reference to your own interpretation, and as an unavoidable response, your predictions.

But it’s also in reference to actually making sense of numbers like the new listings, because what I’m seeing out there completely contradicts what I’m seeing on paper.

“No product” has been the theme this fall.

Now, I certainly don’t expect to see another 202 comments on this blog post, but I do expect to see a healthy debate.

What do you guys think?

Was September and aberration?  Will the new stress-test cut off the real estate market at the legs?

Do you think the October average sale price will be higher than September?

So many questions, so much to talk about.

And now you know why I left this blog for Tuesday…

The post Making Sense Of The September TREB Numbers appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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