Toronto Real Estate is Confusing

Have you read the headlines? Are you confused? Make sure you read this and share with your circle. Just this morning I read two articles with the headlines: “Sales plunge as buyers react to the Ontario Fair Housing Plan” which would lead folks to believe that the market is crashing or there’s a serious discount buying opportunity out there. Please, I beg you to read beyond the headlines. It’s important to know that a cute little puppy dies every time you share an article or form an opinion based on a headline (it also make you look like an idiot). You’ve been warned.

Ontario Fair Housing Plan Announcement

We first heard about the Province’s new Fair Housing Plan at the beginning of April (which was really all about Toronto Real Estate). We broke it down for you so read this and come back. …better? Sousa could have stood there with Premier Wynne and read the new menu of Swiss Chalet and the market would have reacted in the same exact way. Wynne didn’t even have to do anything to cool the market. The proposal was enough to spook some buyers.

Home Capital’s Woes

Then you heard about Home Capital’s (Canada’s largest non bank lender) woes and there was panic in the air. Now go read this and come back….get it? Many articles tried to compare this to “Canada’s Lehman Brothers” type moment…the problem with that is, it’s wrong. In the states over 6 million people lost their homes due to predatory lending. In Home Capital’s case there was a small percentage of fraudulent loans brought in by unethical broker partners which triggered OSC investigations causing a run on their deposits which made it impossible for Home Trust to fund mortgages. The bank was the one defaulting…not the homeowner. Since the Home Capital announcement they have managed to find more funding and have continued to fulfill their mortgage commitments.

Now please know that the Home Capital problem is a big one and you’d be a fool to completely ignore it. It is indeed a problem for a lot of Buyers if Home Capitol goes under. They hold 2% of Canada’s non-bank funded mortgages so that’s a lot of people that will have trouble renewing and may be forced to sell. That would bring more inventory on the market and nudge us closer to a Buyer’s market….but their demise wouldn’t cause an all out assault on home values in Toronto specifically. That’s just not how the economics work.


Don’t get too excited. This isn’t the crash you’ve been waiting for but this is the opportunity you’ve been waiting for. Since the beginning of April we’ve seen a massive decline in the number of properties that are holding back offers (offer dates with hopes of multiples) and many properties not selling on the proposed offer night and being re-listed the next day for a price the Sellers’ are willing to accept.

  • Total sales are down 26% but prices aren’t following suit. Prices are still stable. In in the first quarter of this year if you expected a million, you got $1.2…if you expected $900K you got a million and so on. Now, prices are getting more predictable numbers (and a little less in some instances). This is good. It’s called balance.
  • There are 73% more listings (especially houses) in Toronto’s urban communities South of Bloor when compared to the middle of Q1 2017. This means much much more for Buyers to choose from.
  • Low-balls aren’t a thing. Please don’t embarrass yourself (and us) by trying to “steal” properties and wasting everyone’s time. I’m one of the top brokers in the City and if there’s a deal to be had, I’ll get it for you.
  • The main driver of growth for the big banks are mortgages. HSBC just announced their lowest rate ever. Regardless of what the BoC does, the big banks will do their best to keep rates affordable for Buyers.
  • Sell first. If you have something to sell that is. Otherwise…read on.

You’ll need to stay on top of new listings as they list. With no offer dates set by the Seller, it’s very important for you to be the first to see the home to avoid competition. Sign up for a real time MLS search here.


Time to adjust your expectations. Look, prices are still amazing and are stabilized at an all-time high. You can still cash out your investment and make an amazing return if you’ve bought 18 months ago or earlier.

  • You likely aren’t going to get an offer frenzy when you list. We’re most likely going to get one buyer and you may even sell a few grand under asking but of course if we’re priced properly that’s not something that’ll happen.
  • You likely aren’t going to get that “crazy number” you’re hoping for
  • If a similar house sold for $1.5 million back in February, you may not get that much now but you’ll get close.
  • Do not set an offer date on your property. List it at a price you’re willing to accept and wait.
  • Be very very flexible with showings – say yes more than you say no (in fact…never say no)
  • Sell before Buying. The exact opposite advice we were giving in Q1 of this year. There’s no guarantee you’re home will sell and for and for as much money as you’d hoped so your buying decision needs to be made on your sale price.

Lastly, please don’t blame me (us) for not creating the frenzy you’d hoped for. It’s true, we don’t pepper the community with wasteful direct mail we prefer to join people’s digital feeds with our ads 🙂 so that’s not the reason you’re not getting the action you’d hoped for. This is what a balanced market feels like. This is normal. Selling a home in 6 days for an insane number that doesn’t make any sense isn’t normal and we’re not likely to see gains like this ever again in our lifetime.

Hopefully this clears things up for you. If not, give me a shout and we’ll chat about your specific situation.