Episode 102: It’s local buyers, not foreigners causing big price gains.

Two weeks and two firsts. Last week we saw the average urban Toronto house hit over $2mm for the first time, and this week we only had one sale under $1mm.

Toronto’s urban markets have finally moved into a $1mm entry-level environment. I mean, it feels like we’ve been there for over a year now anyway.

I can’t tell you the last time we successfully represented a buyer who had a sub $1mm budget and wanted a house in Toronto. It’s just not possible in most of the markets we trade.

The good news is, it seems as though some listings are finally starting to creep back in. With over 30 houses added to the urban supply (nowhere near enough, but it’s a start) and a similar amount added to condo land, we may see supply improve as we approach March.

So, if anyone out there still believes that the “spring market” is the best time to sell, give your heads a shake and fire your agent. The past two months have been the best time to sell.

What happens when the federal government announces increased down payments for investment properties? Will prices come down? Or, if Doug Ford follows through on his plan to build one and a half million homes in Ontario? Will prices drop then?

You know the answer already. It’s a big loud NO! You cannot outbuild demand in big cities like Toronto. Where will all of the people building these homes be housed?

We all know that aggressive price gains, like this, aren’t sustainable. I don’t even know why we talk about sustainability and price gains in the same breath.

Why can’t we look at why it’s happening and draw the correct conclusions? A few TikTok agents right now have gone on rants blaming the “foreigner not leaving enough properties for good old local buyers.” I cringe every time I hear this sentiment.

Have you taken a moment to know who these “foreigners” are? They’re not faceless corporations buying up one-bedroom condos in the Canary District tapping their fingers together like Mr. Burns in the Simpsons.

These are people coming here for our world-class, higher learning opportunities and the countless jobs in our leading tech, finance, film, healthcare and crypto industries. These “foreigners” are just like you and me.

The difference? You were born here, and they weren’t. I feel the frustration around the market entirely, and what was once affordable feels like it’s slowly slipping away.

But, Toronto is going through a growth spurt. We’re getting the attention we didn’t have before. We’re moving out of a pandemic that’s ravaged the entire world. People are making moves and are excited to be here and take advantage of all of the things that make Toronto unforgettable, all the things we’ve known since we were little kids.

We can’t gatekeep Toronto. Properties here are going to get even more expensive in the future. Will it still be the foreigner’s fault? Or, maybe it’s your fault for thinking the market will crash and not buying when you should have. Or, perhaps it’s time to adjust your expectations and notch down on the real estate ladder to start.

I hate having to be so blunt about this, as I know this is a very emotional experience for many buyers with budgets that aren’t working in Toronto anymore. I get that. But, when that frustration turns to blame…that’s when I get triggered.

I’d like to be clear about a few things. We’re seeing significant price gains in this market, which means some buyers ignore previous comparable sales and decide to go over the top to ensure they get the property.

Does that mean they’re rich? Feeding into the “only rich can afford homes in Toronto” narrative? No, this means they’re well funded and can get what they want. They’re looking in the appropriate housing category.

If you’re constantly being outbid by hundreds of thousands of dollars on every property, it simply means that you’re not looking at suitable properties. Now, these may be properties you could have afforded six months or a year ago, but a lot has changed in that time.

There are some cases where homes are selling for unjustifiably high prices. But, good agents understand anomalies and work that into their pricing recommendations to their buyers.

A home that sells today for $1.2mm is not selling tomorrow for $1.5mm. That’s just not real and not happening frequently enough to be the problem.

Having an open bidding system will result in the same high sale. We’re all for full transparency here and want to do whatever makes buyers and sellers feel heard and good. I’ve seen it all being on the listing side of bidding wars. Nobody is beating offers by hundreds of thousands of dollars, pushing up prices every day.

And, you want to know who’s not the one driving up prices? Foreign buyers. When looking at the resale housing market…condos and houses…the majority of the buyers involved in the bidding wars are local buyers. So, please stop pushing the foreign buyer narrative. They’re not hurting you. You’re only hurting yourself by ranting about something that 1. doesn’t exist, and 2. you have zero control over.

Sellers get to market quickly as supply is improving. But, don’t worry, as supply improves the newly achieved high prices will be supported long term.

Buyers, time for a reality check. How many bids have you lost? By how much? How quickly are you seeing newly listed properties? How are you losing? So many questions! Buyers that work with The Spring Team aren’t even allowed to go on a showing until we’ve done a full buyer consultation. Via zoom or in person. Once we have the whole picture and game plan together, then we’ll go out.

That’s why our buyers are usually less stressed out and way more successful regularly. Reach out to book a consultation.

Have a wonderful day, and don’t forget to share this. We have over 42,000 subscribers, and the list keeps growing. Thank you for that!

And, don’t forget to follow us on Instagram and Facebook. We post some real-time stats on our channels you don’t want to miss. You can also catch up on my 2022 real estate forecast post here.

That’s all for today; thanks so much for your energy and attention. If you want some clarity on the market and your specific situation, please DM, comment below or email Ara@thespringteam.ca.

Urban Markets: Downtown & Surrounding Areas
House Average Price: $2,024,109
House Median Price: $1,850,909
253 Active Listings
78 Firm Sales This Week
Months of Inventory (MoI) ~ 0.62
Average Days on Market ~ 9.52 DoM

Condo Average Price: $869,347
Condo Median Price: $795,000
683 Active Listings
227 Firm Sales This Week
MoI ~ 0.65
Average Days on Market (DOM) ~ 12.6

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,723,600
House Median Price: $3,200,000
63 Active Listings
15 Firm Sales This Week
Months of Inventory (MoI) ~ 0.71
Average Days on Market ~ 27 DoM

Condo Average Price: $1,296,631
Condo Median Price: $1,132,450
134 Active Listings
28 Firm Sales This Week
MoI ~ 1.45
Average Days on Market ~ 23

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,562,530
House Median Price: $2,482,500
24 Active Listings (nearly doubled week/week)
6 Firm Sales This Week
Months of Inventory (MoI) ~ 0.50
Average Days on Market ~ 7 DoM

Condo Average Price: $1,050,699
Condo Median Price: $805,000
55 Active Listings
10 Firm Sales This Week
MoI ~ 0.59
Average Days on Market ~ 13 DoM

Birch Cliff
House Average Price: $1,886,667
House Median Price: $1,410,000
12 Active Listings
3 Firm Sales This Week
Months of Inventory (MoI) ~ 0.61
Average Days on Market ~ 8.6 DoM

Kingston Rd Corridor to Highland Creek (NEW Week 2)
House Average Price: $1,504,918
House Median Price: $1,410,000
43 Active Listings
17 Firm Sales This Week
Months of Inventory (MoI) ~ 0.60
Average Days on Market ~ 9.72 DoM

Condo Average Price: $650,092
Condo Median Price: $652,775
21 Active Listings
6 Firm Sales This Week
MoI ~ 0.54
Average Days on Market ~ 20.4 DoM

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