SALES COMMENTARYAFFORDABILITY in housing and not sale numbers has taken over the real estate discussion for most people with the politicians jumping on board. For 2021 year-to-date, the number of sales under $600,00 was 13,049 units or 15% of total sales on TRREB. In 2020 to the end of August, the numbers were 13,437 and 23%. While the drop-in units sold was just 3%, for the same period, year-to-date sales for the total market from 2020 to 2021 were up by 52%! When you look at the sales-to-new listing ratio, prices can only go up from here. Currently, we are at a decade-old low for listings!
So, what is the answer: not government housing or purpose-built rental housing. Rather governments need to work together to build Co-Op housing. Non-profit Co-Op housing usually requires a small down payment to buy a share in the Co-Op and the Co-Op itself gets a mortgage on the whole property. People living in these units are responsible for paying and operating the Co-Op. Governments can also be responsible for buying the land and speeding up municipal approvals. The result is that you can reduce construction costs by 40% and create a pride of ownership which is non-existent with renters.
Affordability also leads to a discussion of the condo market. (Toronto is one of the few major cities of the world with low-rise housing). While condos and particularly downtown condos underperformed the market in 2020, we forecast a strong rebound in 2021. Overall sales in August of 2021 were 20% lower than in 2020 at 8600 units but condo sales were 11% higher than in August of 2020. Not only are condo sales higher this August, but ‘new’ and ‘active’ listings in 2021 are now 37% and 43% lower than this time last year. All indications are that condo prices will continue to increase over the fall months.