Anybody waiting to jump into the Toronto real estate market may want to rethink their approach. The latest TRREB Market Watch revealed that while home sales in the GTHA reach the second-highest level ever for the month of October, housing supply remains a major issue in the real estate market.
The price of Toronto real estate continues to experience record highs, with performing consistently, and yet the city and surrounding areas continue to experience diminishing shortages of quality properties. The ongoing issue of housing supply has been discussed and studied by officials at all levels, though any sort of concrete solution still seems like it could be years away.
TRREB October 2021 Market Watch
The Toronto Regional Real Estate Board (TRREB) recently released its October 2021 Market Watch, which revealed that real estate sales in October were at the second highest level ever for the month, with the number of new listings down by one-third compared to last October. Supply in the Toronto housing market has been consistently low since the beginning of the pandemic-related real estate boom, and October’s numbers show that this trend is clearly not going anywhere.
The huge mismatch between supply and demand within the GTHA was addressed by TRREB President Kevin Crigger, who stated “The only sustainable way to address housing affordability in the GTA is to deal with the persistent mismatch between demand and supply. Demand isn’t going away. And that’s why all three levels of government need to focus on supply.” Crigger implored a collaboration between federal, provincial and municipal governments to address supply, adding that the group effort could be spearheaded in part with housing-related incentives tied to federal infrastructure investments.
Toronto housing supply shortage to continue with no end in sight
The report by TRREB showed that every aspect of the housing market has been affected by supply shortages, and experts don’t expect this to change anytime soon. There may be an opportunity for buyers to explore a slightly deeper real estate market around the holidays, but it’s likely that supply won’t be as plentiful as it has been in previous years. Many solutions to the supply issue have been proposed, but nothing has been laid out in detail. In fact, housing inventory fell all across Canada in October, signalling that Canadian’s appetite for real estate is far from satiated.
Lessened supply means that housing prices are likely to remain high, with the average price of a Toronto home sold in October rising nearly 20% to just under $1.2 million. In an effort to address the constantly growing price of real estate in the province, the Ontario government announced plans to create a housing affordability task force. The government has also pledged to address the supply shortage by investing in new housing starts, boasting that new housing and rental housing starts are 16% and 14% higher respectively over last year’s numbers.
Looking to the future of the Toronto real estate market
It’s clear that demand for real estate isn’t going anywhere, and at least for the time, supply just can’t keep up. Prospective real estate investors currently have two viable options – jump into the market now when a viable property becomes available or wait out the market and see what happens. Jumping into the market now means paying a higher price for a high quality property and possibly getting involved in bidding wars, but reaping the rewards of a red hot rental market where good tenants are plentiful. Waiting out the market, however, carries the very real risk of prices rising even higher and the supply shortage becoming a long term trend in the Toronto housing market. No matter which option you choose, it’s clear that Toronto real estate investors are in for a long ride.
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