Episode 104: 2022 is not 2017 & stop blaming foreign buyers

Let me start by making something very, very clear. 2022 is not like 2017.

Why is 2017 so important?

We had a similar run-up in pricing followed by a screeching halt and a bad scenario in the suburbs. What happened in our urban markets? Maybe a 5% pullback, but in general we had the high prices supported and then continued another run once buyers became more comfortable with the new regulations.

This is not shocking, but before April 2017 there was no stress test. There was no foreign buyer tax. None of the protective measures were in place. We had an environment that allowed many people to get in over their heads. The market and some of its players promoted heavy speculation, especially in the suburban markets.

People were signing up deals then assigning them – aka flipping paper. Some communities, especially suburban communities, were gaining value as we’ve never seen before. People made $100K in a day by flipping their agreements to the next buyer, like the real estate version of hot potato.

Prices went nuts; people laughed their way to the bank until they didn’t.

Many of the agents that weren’t active during that time are predicting a similar market reaction now when interest rates increase this month and a potential announcement by the Federal government.

What announcement? We’ve talked about this over the past few weeks. They’re going to do something that likely increases the downpayment for investor buyers. There may be a temporary ban on foreign buyer activity, (which is not a problem in Toronto like you think it is).

Most of the conversation around “foreign buyers” is extraordinarily misguided, and borderline racist. One agent on TikTok even went on a rant about “these foreign investors are coming with their money bags that they want to park in Canada…they have deep pockets, and they don’t care what they’re doing to the housing market….what they’re doing to locals who want to buy here….so these foreign investors are driving up the housing market…and my poor local buyers are getting priced out.”

I understand the emotion of not getting into the market because there’s so much demand, but if you think that some international buyer is the one bidding up your entry-level condo…you’re wrong.

Well…that all depends on how you define a foreign buyer. Is a foreign buyer someone who’s coming here for school? For work? To take advantage of all of the opportunities Toronto has to offer?

Then you’d be right.

But your “poor local buyer” needs to understand that owning real estate is not a right. And, as long as Toronto is a global leader in tech, finance, crypto, health care, sports and film, we’ll be on the radar of the world, and people will want to live here.

Faceless global corporations aren’t the problem you think they are. So, if you’d like to blame affordability on them, go ahead, but it’s not going to change your reality.

So yes, comparables do matter. The house or condo you didn’t win most likely didn’t get bought by a faceless global corporation.

So please stop with that rhetoric. It’s embarrassing and completely misguided.

The only focus of any buyer in Toronto should be to get in wherever you can and hold until you’re ready to move up, move on, or retire. And, do that over and over again.

The government isn’t going to help you; nobody will help you. More support for buyers equals more demand equals higher prices.

I hope they ban foreign buying…you know what comes with that? A ton of exemptions. People that are coming here for work, for school, to live. All will be exempt.

There will be a temporary blip in the market, and then once buyers get comfortable with the new way of doing things, we’ll have another run-up in pricing.

Can’t buy in Toronto? Understandable. But, don’t blame the foreigner. Look at other, more affordable markets and buy there.

When I lost everything I had in 2016, I saved up $20K and bought a small property in Parry Sound and rented it out. Then in a year, or so, I sold it after a slight improvement and put my money into a pre-construction condo for my family. A few years after that, I was able to buy the house we’re in now.

I had to baby-step my way back to life.

Why are so many refusing to do that? Why sit here and complain when all you have to do is get creative?

Buy somewhere else (with the help of a trusted local advisor) and rent where you currently reside. Let that real estate work for you until you can get what you want in the city you want to make home.

The world has many rewards available for optimistic, positive people. No time for rants. Only positive, forwarding thinking action.

Thank you for attending my ted talk!

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!

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.

And, please find me on Twitter as I’ve been more active there these days.

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: $1,801,047
House Median Price: $1,600,000
310 Active Listings
79 Firm Sales This Week
Months of Inventory (MoI) ~ 0.62
Average Days on Market ~ 8.76 DoM

Condo Average Price: $896,048
Condo Median Price: $786,500
800 Active Listings
216 Firm Sales This Week
MoI ~ 0.65
Average Days on Market (DOM) ~ 11.08

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,988,148
House Median Price: $3,125,000
75 Active Listings
6 Firm Sales This Week
Months of Inventory (MoI) ~ 0.71
Average Days on Market ~ 19 DoM

Condo Average Price: $1,530,849
Condo Median Price: $890,000
139 Active Listings
21 Firm Sales This Week
MoI ~ 1.45
Average Days on Market ~ 9

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,300,000
House Median Price: $2,100,000
33 Active Listings (nearly doubled week/week)
5 Firm Sales This Week
Months of Inventory (MoI) ~ 0.50
Average Days on Market ~ 7 DoM

Condo Average Price: $808,873
Condo Median Price: $752,000
55 Active Listings
13 Firm Sales This Week
MoI ~ 0.59
Average Days on Market ~ 9 DoM

Birch Cliff
House Average Price: $1,227,388
House Median Price: $1,227,550
11 Active Listings
8 Firm Sales This Week
Months of Inventory (MoI) ~ 0.61
Average Days on Market ~ 12 DoM

Kingston Rd Corridor to Highland Creek (NEW Week 2)
House Average Price: $1,535,552
House Median Price: $1,400,000
53 Active Listings
19 Firm Sales This Week
Months of Inventory (MoI) ~ 0.60
Average Days on Market ~ 9.72 DoM

Condo Average Price: $756,339
Condo Median Price: $649,000
39 Active Listings
9 Firm Sales This Week
MoI ~ 0.54
Average Days on Market ~ 20.4 DoM

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