Every couple of years we seem to see Toronto increasing their municipal land transfer tax (LTT) on luxury properties.  It happened back in 2024, when increased rates were imposed upon sales in Toronto of properties over $3M, and it’s just happened again.

As of April 1, 2026, we have new rates for the LTT on the sale of properties over $3M in Toronto.  The provincial land transfer tax has not made any similar changes at any point, but the city of Toronto is rapidly increasing the cost to buy within the Toronto boundaries.

We looked at the anticipated increased revenue the city would make when they did this back at the start of 2024, we said they’d bring in about $27M in additional revenue as a result of the increases.  That sounds like a pretty significant amount, but keep in mind that back in late 2023, the City of Toronto’s updated Long Term Financial Plan and staff report showed an estimated $1.5 billion starting pressure for the 2024 operating budget and $29.5 billion in capital needs, which both form part of a $46.5 billion shortfall over the next 10 years.  The forecasted $27M would have brought in less than 2% of the amount needed to address the operating budget shortfall.

Given the city remains in difficult financial circumstances, it is clear that the increased tax didn’t help in a material fashion.  The latest increase is actually going to be far less impactful, as it is mostly increases of around 1%  for those higher price bands.

Let’s look at the new changes and how much additional money it could bring in – plus how many deals need to be lost as buyers decide to purchase their high end homes outside of the city.

Apples to apples.

We’re primarily focused on resale properties in our team and the data we can access is largely limited to residential resale properties.  As such, all of our analyses below are based on that data.   We’re after some broad (but accurate) implications of the new LTT rates, but we aren’t considering:

• non-MLS transactions
• builder/direct new-home and new-condo closings
• commercial / industrial / multi-residential / vacant land transfers
• other taxable conveyances the City records but that do not show up in our records

While some of the specific numbers of the implications of the new LTT rates will be understated, our analysis does paint a clear picture of what it means to the resale market.  Now that we’re officially covered, let’s get into it.

First, a history lesson.

We’ve created a handy chart to show the recent history of the Toronto Land Transfer Tax.  The orange column is what it was for about six years, and the blue columns show the rate increase amount that was put into place as of January 1, 2024.  The green column is the brand new rate increase amounts that apply to properties bought in the city as of April 1, 2026.

There have been no changes made to the land transfer tax due on the purchase of any properties up to $3M, but if you’re at that level or higher, we saw it go from a flat rate of 2.5% on any amount above the $3M level, to a graduated system.  The higher the price point, the higher the rate you’re paying on that portion of your purchase.

The latest round of increases have added about 1% to most of the price bands, with a range from 0.9% to up to 1.1%.

It’s all marginal.

A reminder that the land transfer tax is a marginal tax bracket, which means that for any price above a threshold, you pay:

• The full tax from all lower brackets
• Plus the tax on the portion that falls inside the current bracket

For example, a $1.2 million purchase does not pay 2.0% on the full $1.2 million. Instead, it pays:

• 5% on the first $55,000 = $275
• 0% on the next $195,000 = $1,950
• 5% on the next $150,000 = $2,250
• 0% on the remaining $800,000 = $16,000
• Which would bring the total municipal land transfer tax to $20,475.

This is relevant as we look at what impact these higher tax brackets will have on the sales taking place moving forward.

The past ain’t the future.

A caveat we often give is that what happened in the past is not necessarily indicative of what will happen in the future.  That being said, we need to base our analysis on certain assumptions, so the big assumption in our analysis here is that we’ll see similar types of transactions and numbers of transactions in 2026 as we did in 2025.  Here’s how the 23,475 sales in the city of Toronto were spread across the various price bands.

A few things about the above data are very relevant to our review.

First, 97% of the sales that took place in Toronto in 2025 were under $3M, which means the change that just took place is utterly irrelevant to those sales.  The Toronto LTT rate for these properties has not changed since 2017 and they can go merrily about their business.

The next thing worth pointing out is that the 740 sales that were in the $3M plus price bands last year were mostly in the $3M to $5M range.  59% of the sales were in the $3M to $4M band and another 22% were in the $4M to $5M band, so over 80% of the sales were in that $3M to $5M range.

If we assume that 2026 will see a similar spread of deals as we saw in 2025, how are these higher land transfer tax rates in those price bands going to bring in to the city in increased revenue?

It’s more, but it’s not a lot more.

We pulled the average price for each of the price bands for the sales in 2025 and then calculated the Toronto LTT for each of those bands.  This is relying on averages within each price band so it will not be 100% accurate, but it is enough to give us an idea of what 2026 will look like for increased revenue with the new increased LTT rates.

The city would have brought in about $450M in municipal land transfer tax in 2025 based on these sales.  With the new higher rates for the higher end price points, that means an estimated revenue for 2026 of about $458M, which works out to about $8M more in land transfer tax revenue for the city.

As we see very few sales at the $5M or above price point, the bulk of this $8M comes from sales in the $3M to $5M range.

$8M is still better than a kick in the pants, right?

The final aspect of the new LTT tax rates worth discussing is the fact that our model makes the assumption that the same level of sales take place in Toronto despite increasing costs for those buyers.  While it may be unlikely that a lower price point buyer will choose to buy outside of the city to save on the land transfer tax, we have had clients who considered the difference in closing costs significant.

At the higher price points that this latest round of LTT rate increases impacts, the difference between what you pay in Toronto versus surrounding municipalities amounts to significant dollars.

For example, a $5 million buyer in Toronto would pay about $272K in total LTT, of which $112K is the provincial portion.  If the buyer chose to purchase instead in another city such as Oakville, they would save $160K on their closing costs.  That’s a significant amount of money and while the latest increase in Toronto’s LTT rates doesn’t materially change the amount they pay, it is reaching levels that could result in some buyers deciding they’d rather put that money into a home purchase outside of Toronto.

While it is complicated to project how many lost deals it would take for the city to not see that projected $8M increased LTT from high end sales, we know that any purchase that moves outside of the city loses the entirety of the MLTT, not just the portion at the higher end.  Our calculation is that it would take about 67 of these high end deals leaving the city for that projected $8M in extra LTT revenue to disappear completely.

We regularly work with buyers and sellers impacted by decisions like this latest Toronto LTT rate increases, and it’s important that your agent understands the factors that influence the high end and luxury market in the city.  If you’re looking to buy or sell in the $3M plus range and want agents that understand how that segment actually works, get in touch!

It’s pretty well known that real estate agents are somewhat prone to hyperbole.  We’ve written in the past about the secret codewords that agents use to try to convince buyers a home is appealing.

While people are pretty good at seeing past the flowery phrases dressing up the listing, it can be much harder to decipher the differences between two seemingly similar properties.  After all, numbers don’t lie, right?

So, numbers can lie.

Real estate is full of numbers and while the price is arguably the most important one, lots of the other numbers aren’t always what they seem.  Consider the following examples:

• Two 4-bedroom homes, where one has three good-sized bedrooms on the 2^nd floor and a spare bedroom (or den) on the ground floor. Suitable for a family with young kids, closets in all the rooms and able to fit beds, dressers and so forth.  The other property has one huge bedroom on the 2^nd floor, with massive walk in closets and a spa bathroom retreat and three smallish “bedrooms” in the basement, one of which has no windows.  Great for a couple with no kids who want hobby rooms in the basement.
• Two 785 sf condo units, each with two bedrooms and two washrooms. The first is a rectangular shaped split wing layout with two 10×12 bedrooms at either end of the condo, with ensuite washrooms off both, one of which opens to the hallway so guests can access it without going through a bedroom.  The other is a small L shape, with a full bathroom right beside the entrance door, a hallway leading down to a small bedroom with an angled wall, and a primary suite beside it with the washroom took into the other side of the angled wall.

Two properties can appear nearly identical on paper if you look at just the numbers, but there are often considerable differences between them when you look closer.

According to Webster’s Dictionary…

Numbers aren’t the only area where seemingly identical properties can differ significantly.  We have some standards that apply to how real estate agents can describe different attributes, but they aren’t always followed to the letter.  Some agents consider a kitchen “newly” renovated if it happened in the last five years, whereas others follow the more stringent approach of it literally just got renovated before we listed the home for sale.

While flat out misrepresentation is relatively rare, people can hold very different definitions of what certain descriptions mean.  Where do you fall on the below scales?

• Is a walk-in closet a large room with a dressing bench in the middle and custom shelving on all sides, or is a walk in closet any closet that has enough space for you to walk inside and cuddle your clothes?
• Is a family size kitchen a big room with tons of cabinetry, an extended island with spots for stools, as well as a separate eating area with a kitchen table? Or is it a narrow galley style that has a bistro table and two small chairs at the end beside the dishwasher?
• Are high-end appliances delivered from Europe and installed by a team of four who wear white booties when they enter your home, or are they a mismatched group of premium versions of different appliance brands that you see in most homes?
• Is the only hardwood that can be called hardwood flooring actual hardwood such as oak, hickory or maple, or is engineered hardwood with a thin layer of hardwood veneer also hardwood flooring?

We could go on and on, but when no specific details are provided on any claimed “feature” of a home, it is likely there are big differences between two listings who both claim they have it.

Where did I put my glasses?

Finally, there are homes that seem to have identical features as per the listing, but it turns out that not all things are created equal.  Which would you prefer?

• If you’re invited to enjoy your private backyard oasis with a pool and hot tub, do you envision an inground pool, with a hot tub section you can swim into from the pool? What if it is an aboveground pool with a hot tub in a different section of the backyard?
• Is it a media room if there are couches (that don’t come with the house) and a first generation low resolution digital projector (that is generously being included), or is a media room a custom built space with built-in furniture, sound baffling and a state of the art video and audio system?
• If both properties have a balcony, does it make a difference if one faces the Gardiner and is loud and dusty all year round, whereas the other faces the lake and views of the setting sun?

The above examples may seem pretty far fetched but trust us, they have all happened.  The quality, age and inclusions in a given attribute can make a huge difference in the value – or lack thereof – to potential buyers.

We’ve looked at a lot of properties for our clients and with our clients.  If we had to estimate the numbers, it would be somewhere between “too many” and a bazillion.  As a result, we’re very good at spotting differences that the numbers and images may not make clear to the general public.

This is surprisingly relevant on the sale side work we do, as a big part of setting your list price is comparing your home against other properties.  We often encounter situations where we see significant differences between our seller’s home and the recently sold and currently on the market competition.  This allows us to make sure we don’t leave money on the table, or mistakenly over price and not get the result our clients need.

If you’re looking to make a move and want to work with agents who know what to look for when comparing properties, get in touch with us!

We’re less than a week away from a highly anticipated overnight rate announcement from the Bank of Canada.  Does this mean interest rates are about to drop?  If so, how much and are more coming? More importantly, how will this impact real estate markets?

We’ve looked at what’s likely to happen and come up with our analysis on the likely impact.  Let’s review how we got here and what’s coming next week.

Ah, the spring of 2020…let the good times roll!

On March 27, 2020, the Bank of Canada dropped the overnight rate by half a percent to 0.25% and kept it at this record low level for almost two years.  As the overnight rate directly influences lenders’ prime rates, we saw very low interest rates being offered on variable loans and lines of credit, including variable-rate mortgages.

It was a very good time to borrow money and lots of people took advantage of the low rates making the payments on mortgages affordable – well, payable.

Then came the spring of 2022.

After almost two years of these low, low rates, the Bank of Canada began to raise the overnight rate on March 2, 2022.  We saw ten increases in the overnight rate from March, 2022 to July, 2023 and since July 12, 2023, the overnight rate has been steady at 5.00%.  Canada’s prime rate went to 7.20% and remains at that level.

Anyone who had signed up for a variable rate mortgage in that two-year period of very low rates (basically spring of 2020 to spring of 2022) experienced their rates rising at a very rapid pace. The affordability of their mortgage payment went away for many homeowners and at the same time lots of potential home buyers saw their ability to afford a mortgage disappear.  The result was a tremendous slow down in the number of sales and considerable fluctuations in the average price for real estate in Toronto and the GTA.

Welcome to the summer of 2024!

After almost a year of no change to the overnight rate (and therefore prime rate), it seems likely that we are about to start seeing some change!

Just a little bit over 75% of economists (22 of 29) are predicting that the Bank of Canada will cut its key interest rate by 25 basis points to 4.75% on June 5, 2024. Financial markets have already priced in slightly more than a 60% chance of that, so most of the smart people in the finance industry think change is coming.

Is this the start of interest rates dropping back to their old levels?

The short answer to that is no.  It seems very unlikely that we will return to anywhere near the record-low interest rates we saw back in early 2020.  The COVID pandemic made central banks in many countries take unprecedented action to stimulate the economy and Canada was certainly no exception.

While we won’t hit that sub 1% level this year (or perhaps ever again), the overwhelming majority of economists expect at least three rate cuts this year.  If June sees the first of these cuts, that leaves two out of four more overnight rate announcement dates where we could see further price drops.  After June 5, 2024, the rest of the dates are as follows.

• Wednesday, July 24
• Wednesday, September 4
• Wednesday, October 23
• Wednesday, December 11

There is some disagreement amongst economists as to where we will end the year, but the median forecast for an end-2024 rate is 4.00%, with the dissenting economists (about half) saying 4.25%.  This means that from our current (as of today, May 31, 2024) overnight rate of 5% will drop somewhere between .75% to 1% over the course of the year.

How much of an impact does a 0.25% interest rate cut actually have?

In order to answer this question, we need to look at it from two perspectives.

The first is the actual dollar impact.  With a current typical variable rate of 5.9%, the monthly payment for every $100K of mortgage is about $633.  If the Bank of Canada drops their overnight rate to 4.75% and lenders drop prime accordingly, then we would see that variable rate drop to 5.65%.  That lower prime rate results in a monthly payment of about $619 for ever $100K of mortgage.  Yup, about $14 cheaper.

If you had an $800K mortgage, that would mean that your monthly mortgage payment of $5,064 would drop by $112 to $4,952 per month.  An improvement, but nothing that will cause you to open bottles of champagne to celebrate!

If the actual dollar impact isn’t much, the other aspect to consider is how it impacts people from a perspective stance.  With prime at 7.2% for the past year and no indication of it lowering, people began to consider this the new normal.  Any homeowners who found their mortgage payments no longer affordable came to the conclusion that things weren’t improving anytime soon and sold, sometimes at a loss.  Prospective buyers who were waiting on lowering mortgage rates to make a home affordable decided that home ownership might not be in the cards for them.

From this perspective, the impact of a lowered interest rate – with more to come over the course of the year – is much more meaningful than the actual dollar impact.  Home owners with variable rate mortgage who have held on to their properties will see some small relief in their payments and will feel better about keeping the home longer.  Buyers who could have afforded to purchase over the last year but who were nervous about where rates were going may now feel confident about moving forward with a purchase.

Will the end of the year be a whole different ball game?

Will the forecasted end of year overnight rate of between 4.25% to 4% have a huge impact on people in terms of dollars?  If we take the most optimistic scenario where the overnight rate goes from it’s current 5% to 4% by the end of the year, we see some more significant dollar impacts, but not really anything that will change the market as a whole.

Our current $633 per $100K of mortgage would drop down to $575 per month if we see prime drop by 1% by the end of 2024.  That’s $58 per month and works out to a savings of about $464 per month if you had an $800K mortgage.  While any drop in monthly payments is useful, going from a mortgage payment of $5,064 to a mortgage payment of $4,600 isn’t exactly a sea change.

While predicting markets is a difficult thing to do, we’re confident that what’s coming will have a small impact on real estate sales and prices.

We are predicting that these forecasted rate drops will encourage some home owners to keep their properties longer, which means a slight drop in the number of homes hitting the market.  At the same time, we think that buyers who were already able to afford the payment (or who were on the cusp of affording it) will move forward into making a purchase.  It should mean an increase in the number of sales in the latter half of this year, but not to a significant extent.

If you’re thinking about buying or selling this year, depending on how things go with interest rates, then we’d love to help you navigate the changing landscape.  Get in touch with us to have a discussion about the best approach!

In December 2021, the Ontario government appointed nine members to a new Housing Affordability Task Force and gave them a mandate to explore measures to address housing affordability.  On February 8, 2022, the task force released their report, with 55 recommendations.

We wrote an article about the implications of the report and the recommendations back then and you can find it here.

With more than ¾ of the recommendations fully or partially implemented, we’ve more or less fixed this housing affordability issue, right?

Judging by the fact that the average price for a home in the GTA is $1.156M as of April 2024, it doesn’t seem like the recommendations have worked that well so far.  In fact, a year ago (April 2023), the average price was $1.152M, so we’ve basically seen prices stay the same recently.  If that continues for say, 20 years, we might see housing become more affordable.  The median household income in Ontario is about $73,000, which is coincidentally about what a $1M mortgage would cost annually at current interest rates.

If you’re keen on seeing what recommendations have been implemented, you can go directly to the source.  The report as well as the progress made is available on the provincial government’s website here.

We wanted to share some thoughts on what is still needed to be done to help making housing affordable in the GTA and beyond.  Let’s get to it!

First, the bad news.

With house prices in Ontario having almost tripled in the past 10 years, growing much faster than incomes, home ownership is beyond the reach of most first-time buyers across the province, even those with well-paying jobs.

It has arguably never been more difficult than it is right now to enter the housing market.  Economic factors such as high interest rates, high construction financing costs and a shortage of skilled labour have all compounded the issue.  Add in the fact that wages have not kept pace with the rising cost of housing and it’s not hyperbole to say we continue to be in a housing crisis in the GTA and many parts of Ontario.

Cheer up, buttercup.

As we mentioned, there is some good news in that the Ontario government has been working away on the recommendations made by the Housing Affordability Task Force.  The focus has very much been on how to increase supply, as the old levers of supply and demand have been the reason we’ve seen such quickly rising home prices in the last decade.

Housing starts (i.e. building homes) in 2021 and 2022 were the highest they had been in almost 40 years, so supply is coming, albeit slower than we’d like to see.  While this is great news, we know that the housing affordability crisis continues to pose a major challenge across Ontario.  The good news is that the province has the right tools to continue tackling the housing affordability crisis and implement the  Task Force’s 13 remaining recommendations.

The Ontario Real Estate Association (OREA) has identified three big focus areas and members of the Refined team are part of the Realtors that are presenting these recommendations to MPPs in Toronto.  Let’s go over what needs to happen next in order to continue to improve housing affordability in Toronto, the GTA and the province as a whole.

Quit being so exclusionary.

The first focus area that should help with housing affordability is the elimination of exclusionary zoning.

Many regions across Ontario are zoned to only allow single-family homes to be built.  This means that a homeowner can tear down a war-time bungalow to build a four-storey mansion, but if that same homeowner wants to convert the bungalow into a duplex or a triplex, they are faced with extensive red tape.

The Ontario Government has the ability to mandate four units as-of-right in municipalities across the province and we’re recommending they do so.  This measure is one of the fastest solutions to get much needed ‘missing-middle’ housing built across the province, including duplexes, triplexes, and fourplexes, without being hampered by red tape and lengthy approvals processes.

Show them the money!

The second focus area is increasing funding for skilled trades.

The province has put forward a goal to build 1.5 million homes over the next decade, but there is a dire lack of skilled labour to meet this demand.  The Canadian Home Builders Association estimates that 22% of the construction workforce is nearing retirement. This will only exacerbate the skilled labour shortage we are already facing.

To mitigate this issue, we recommend that the Ontario government implement incentives for construction workers.  It needs to become more appealing to study trades and this means more money put into interest-free apprentice loans, grants for completing each stage of a designated Red Seal trade as well as completing an apprenticeship and programs designed for women and BIPOC to more easily enter the trades.

Welcome to my store.  I mean, my home.

The final focus area is facilitating commercial to residential conversions.

With the rise in popularity of e-commerce, as well as many organizations working remotely or in a hybrid format post-pandemic, there is a sizeable amount of commercial real estate that is currently underutilized.

Commercial real estate, such as strip malls, plazas, and office buildings are often located close to public amenities, such as public transportation, making them the perfect location for housing development.

The Ontario Government should legislate commercial-to-residential conversions province-wide to allow for more housing options.

While real housing affordability may be difficult to achieve, with a concerted effort from the Ontario Government, we strongly believe that implementing the policy changes listed above will move us closer to tackling this crisis.

If you’re wanting to get into the housing market and don’t know how to make it happen, we often work with first-time home buyers who need knowledgeable advice and the tips and tricks on how to find and buy a home of their own!  If that sounds like you, then don’t hesitate to get in touch.

If you’ve ever had a conversation with friends about their experiences with real estate agents, you’ve likely heard some horror stories about uninformed, unmotivated, and unprofessional agents.  When you delve into the specifics, the key failing is often a lack of specific knowledge that would have helped make the process go better for the client.

When it comes to real estate investment, the situation is similar, and is arguably even more pronounced.  Take a look at some of the key results of a survey of real estate investors by the Real Estate Council of Ontario.

• 21 per cent of investors wished they had looked at more properties.
• 26 per cent of investors wished they had a better grasp of the buying process.
• 32 per cent of first-time investors said they were not prepared or knowledgeable about the home buying process.
• 43 per cent of investors said there were sections of the real estate contract that they did not fully understand.

As we read the list above, one thing became abundantly clear – most investors are poorly served by their real estate agents.  Let’s reframe the points above from the perspective of how agents failed their clients.

• About 1 in 5 agents pressured their investor clients to buy a property early in the process rather than showing them more investment options.
• More than a quarter of agents couldn’t adequately explain the process of buying an income property.
• Almost 1 in 3 agents working with first-time investors didn’t prepare or educate those clients.
• Almost half of the agents involved in helping investors buy income properties had clients who didn’t fully understand the contract they signed.

The simple fact of the matter is that while all licensed real estate agents can help investors buy an income property, a lot of them shouldn’t be doing it.

The process, the terms, the calculations to determine which option is the best investment – these are all aspects of buying an investment property that can be confusing and intimidating.  Add in changes to government rules and regulations, financing qualifications and shifting markets and you have a challenging situation to handle properly.

The good news is that picking a real estate agent for your income property purchase isn’t rocket science.  It’s all about making sure that the person you’re trusting to help you navigate you through the process actually understands the process.  Without further adieu, here’s our three rules for picking an agent to buying an income property.

Rule #1 – The agent has to be an investor as well.

If the agent is not a real estate investor as well, don’t hire them to be your agent.  They don’t need to own a slew of properties, but if they haven’t bought and sold investment properties of their own, and if they haven’t owned and managed an investment property, don’t hire them.  An agent who is also an investor is able to bring that knowledge and perspective to the search for your investment property.  They’ve spent the time in the past to figure out how to do it properly, because they’ve actually put their own money on the line.

Within the Refined team, we have years and years of experience owning investment properties.  We’ve bought and sold our own investment properties, renovated to increase rents, found and on a few occasions evicted tenants and overseen property managers, contractors, and tradespeople.  Does that help when we work with investors?  Absolutely.

Rule # 2 – The agent has to be able to do the math.

If the agent can’t calculate cap rates, fill in all the pieces of the ROI formula and generally provide you with the information you need to compare properties and decide, then they aren’t doing their full job.  If you are the one struggling to gather this information and assess what it means, you will miss out on fast moving opportunities and won’t have the time to see as many options.  You don’t need your agent to be a tax accountant but they have to be very comfortable with the math.  It’s an investment of your funds and needs to be treated as such.

Within the Refined team, we have agents who have taken courses in statistics, financial statement analysis, macro economics, accounting, Canadian taxation, international taxation and intergalactic taxation.  Well, the last one we made up, but the rest is true.  We’re very comfortable with numbers and analyzing them and we have used that knowledge to create spreadsheets to analyze real estate investments quickly and thoroughly. 

Rule #3 – The agent has to see the big picture.

In any real estate purchase, an understanding of the overall market as well as specific neighbourhoods or streets is crucial.  For investment properties, the agent needs to be able to also consider macro economics of the region.  The strength or weakness of the area’s economy impacts rental rates and vacancy rates, which in turn impacts housing appreciation or depreciation.   When the provincial or federal government announces funding for a major project that creates thousands of jobs, those new jobholders need places to live and rental properties in that area are in demand.  When a major employer in a town closes down or lays off hundreds of people, those jobseekers move elsewhere and rental properties that used to rely on them are now vacant.  The agent you hire needs to be able to place the different real estate investment options in a bigger context than just the land and building.

Within the Refined team, we have access to detailed demographics and economic data for the various neighbourhoods, communities, and regions within the GTA.  When we combine that information with specific market conditions, rental rates, vacancy rates and purchase prices, we give our investor clients confidence in their decision to buy or pass on a given investment. 

As the survey we discussed shows, there are a lot of investors out there who, in a weak moment, choose a weak agent.  By following the above rules, you can make sure that doesn’t happen to you.  If you like the sound of that, then get in touch with us.  We’d love to make sure your next income property is a star in your portfolio!

With recent headlines about many condo developments being put on hold due to the market, we’re fielding a lot of questions from our clients who own condo units they’re considering selling.

The most common question is whether now is a bad time to sell a condo.  The question may be simple, but the answer is actually a bit complex.  Before we get into that, let’s share the story of a condo apartment sale we came across recently.  It was a two bedroom, two washroom condo with parking and a balcony located in the west end of Toronto.

The condo sold a week ago after more than six months on the market, for about $20K less than what the seller was asking. The agent who got it sold was the 4^th agent to give it try, as the previous three agents were fired.  All told, there were five MLS listings before it finally got sold.  Four agents, five listings, six months is not exactly a stellar track record.  We weren’t involved in either the sale or buy side but we think there are some insights to be had from reviewing what works when selling a condo – as well as what doesn’t work!

Here’s the history.

Let’s go through the details of what happened with this condo sale.

• The first listing went up at the start of November last year, for sale for $725,000, offers anytime.
• The second listing went up January 12^th with a new agent, listed at the same price of $725,000. After 27 days on the market, it was terminated.
• The third agent made their attempt in the middle of February, listing the unit for sale at $739,900 but after 27 days, they were also let go.
• The fourth and final agent came onto the scene near the start of April, listing the unit for sale for $649,000 but this time they were holding back offers for a week. That didn’t work and after 12 days, this listing was terminated.
• The same agent relisted it (making it the fifth listing since they started their attempt to sell last year) at $739,900 and sold it for $720,000.

Quite the story!  There’s one big question we should try to answer about the sale.

Did the seller get what they wanted?

That’s a hard question to answer, so let’s look at it from a few different perspectives.

Back at the start of November when they hired the first agent to sell the unit, they put a possession date of between 30 to 60 days.  They were clearly hoping to be out before the holidays or the start of the new year.  That was definitely not the case and instead of selling in November, they had the unit on the market all month, as well as in December, January, February, March and April.  If you’ve ever had the joy of selling your home, you know that keeping it in showing ready condition for a week is hard to do, let alone for almost half a year!  By this metric, we’d say the seller definitely didn’t get what they wanted.

While we don’t know the seller or the four agents involved in this sale, we do think that interviewing, hiring and signing paperwork four times was not something the seller initially envisioned happening.  We also bet that the three times they fired their agent wasn’t pleasant and the paperwork to terminate the listing and their representation would also have been time consuming.  As such, from a time spent worrying about the listings and interacting with their agent(s), this likely wasn’t what the seller wanted.

Finally, let’s talk about the sale price.  The seller originally wanted $725,000 and 169 days later they sold for $720,000.  That’s pretty close to their original list price, though a bit down from the $740,000 they raised it to for the 3rd and 5th listings.  It is a pretty quick closing of about a month, so that may have factored into their willingness to take $20K less than what they wanted.  We’d say that from the sale price perspective, the seller would have (hopefully) felt like they more or less got what they wanted.

So, is now a good time to sell a condo?

There are a few insights to be had from this example that inform our answer as to whether now is a condo time to sell a condo apartment.

The above example shows that for this specific unit, now was a much better time to sell than six months ago.  The average price for a condo apartment in Toronto in November, 2023 was $716,000 and as of March, 2024, it rose to $729,000.  That’s just $13K difference, but it’s about 2% higher and we’re at the highest average sale price in the city since September, 2023.  As such, now is definitely a better time than it has been!

Despite the length of time this particular condo took to sell, the average days on market for condo apartments in Toronto has been dropping over the past couple of months.  At the start of the year, it took 41 days on average for a condo apartment to sell in the city, then it dropped to 30 days in February and as of March, it had dropped to 27 days on average.  That still isn’t exactly speedy, but it is the quickest we’ve seen the condo market move since October of last year.

Both the number of sales as well as the average sale to list price ratio has also been slowly increasing this year.  March saw the most sales of condo units in the city since June, 2023, so the market is picking up in terms of activity.  At the same time, buyers are paying about 99% of list price on average these days, which is the highest it has been since July, 2023.

Put it all together and we’d say that now is a better time to sell a condo than it has been for quite a while, but we’re far from the busy seller’s market we saw back in early 2022.  If you’ve been waiting to sell for past six months or so, then that was likely a good decision.  If you’re thinking that now is when selling might make more sense, give us a call so that we can dive into the specifics for your unit and building.

After all, we don’t want someone writing an article about your place six months from now!

Over the last few years it has become very clear that the run up in real estate prices in Canada – and in major urban centres like Vancouver and Toronto in particular – has caused a housing affordability crisis.  While homeowners have benefited from the tremendous increase in average house price, renters and the next generation of potential homeowners have found it very difficult to afford a home that suits their needs.

Housing affordability has become one of the biggest topics in Canada and as such, it is no surprise that the latest Federal budget, Budget 2024, Fairness for Every Generation, contains a number of measures focused on real estate affordability.

Let’s look at Budget 2024 from a real estate perspective to see what’s included, what seems like a good idea, and what may miss the mark entirely.

On one hand…

The government has described Budget 2024 as a budget that “takes bold action to build more homes…and will grow the economy in a way that’s shared by all.”  Those are welcome words and given we’ve seen a number of housing announcements in recent weeks, including Canada’s Housing Plan, which was released on Friday, April 12, 2024, it’s clear that the federal government knows housing affordability is a real issue.

Budget 2024 details an ambitious set of housing initiatives aimed at tackling the housing crisis through increasing housing supply, helping homebuyers and renters, and supporting innovative solutions for builders.  That means we’re gonna fix this, right?  Hold on a moment.

…but on the other hand.

While the new initiatives focused on increasing housing supply are absolutely welcome, they come hand in hand with a number of new tax measures that could negatively affect housing supply and affordability.

Housing is a complex issue, so it’s not particularly surprising that some aspects of the budget designed to help other parts of the economy have ripple effects on housing affordability, but it is disappointing to see that the Federal government is diminishing the impact of new initiatives with new tax measures.

Is it one step forward and one step back, or does Budget 2024 actually look like it will help with housing affordability overall?  Let’s go through the bits of the budget that impact real estate along with our take on whether it’s a good thing or a bad thing.

Capital Gains Tax Inclusion Rate

The government is increasing the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts from one-half to two-thirds. Individuals will continue to pay tax on 50 per cent of any capital gains up to $250,000 per year. The new rules will apply to capital gains realized on or after June 25, 2024.  Selling your principal residence will continue to be exempt from capital gains taxation.

Good or Bad?  This is potentially bad news for housing affordability, as in some cases, the increased capital gains will make it more expensive to increase supply.  For example, hiking the capital gains tax could increase the costs of converting underused commercial property into new housing.

Increase in Home Buyers’ Plan Limit

The Home Buyers’ Plan (HBP) limit will increase from $35,000 to $60,000 for an individual or $120,000 for a couple, allowing first-time homebuyers to withdraw more from their Registered Retirement Savings Plans (RRSPs) for down payments, benefiting from the tax advantages of RRSP contributions.

Canadians withdrawing from their HBP between January 1, 2022, and December 31, 2025, will benefit from an extended repayment grace period, now up to five years, allowing them to better manage mortgage payments.

Good or Bad?  This is good news for housing affordability in the sense that it will make it easier for potential home purchasers to put down a larger downpayment and allow them more time to repay the withdrawal.  At the same time, an initiative that increases demand for real estate by adding more buyers to the mix, is not particularly helpful as supply remains the biggest aspect pushing prices up.

Extended Mortgage Amortization Periods

The budget will introduce a provision for 30-year mortgage amortizations for first-time homebuyers purchasing newly built homes, starting August 1, 2024. This extension aims to make monthly mortgage payments more manageable.

Good or Bad?  Again, this is a mixed bag when it comes to housing affordability.  Yes, this is good news for buyers of newly built homes, as they can have lower monthly mortgage payments due to a longer amortization period.  At the same time, this is an initiative that increases demand for real estate by making it more affordable for buyers without actually addressing the supply side.

Permanent Amortization Relief

Enhancements to the Canadian Mortgage Charter will include permanent amortization relief for existing homeowners meeting specific criteria, thus allowing them to reduce their monthly mortgage payments as needed.

Good or Bad?  This is good news for housing affordability for specific homeowners, though it doesn’t increase supply.  In essence, it seems like it will make things easier for certain types of homeowners in specific situations, likely at the expense of their lender.  While it may be more of a shifting of costs, we’re all for anything that makes it more affordable for homeowners, so we’ll call this one a win.

Housing Accelerator Fund Enhancement

An additional $400 million will be added to the Housing Accelerator Fund, raising its total to $4.4 billion, aiming to fast-track the construction of an additional 12,000 new homes over the next three years.

Good or Bad?  This is good news for housing affordability, with the caveat that a fund has to be disbursed and used in order for the results to be achieved.  There are a lot of examples of the Housing Accelerator Fund being disbursed to municipalities and housing projects announced as a result, but having the money and people moving in are very different things.  We’ll also point out that while $400 million is a lot of money, it’s about a 9% increase to the existing fund, so not a game changer.

Canada Housing Infrastructure Fund

A new $6 billion fund will support the construction and upgrading of essential housing infrastructure to facilitate more homebuilding activities. The government is looking to partner with provinces to deliver this funding, in addition to working directly with municipalities.

Good or Bad?  This is definitely good news for housing affordability, as one of the under recognized challenges with building new housing supply is essential housing infrastructure is also required.  Aspects such as water and wastewater systems, roads and bridges, electrical infrastructure all need to be in place at the appropriate level in order for these new homes to actually be livable.

Support for Renters

New measures for renters include launching a new $15 million Tenant Protection Fund, creating a new Canadian Renters’ Bill of Rights, and making sure renters get credit for on-time rent payments.

Good or Bad?  This is bad news for housing affordability from our perspective.  We say that because it’s focusing on things that are not core challenges with renting in Canada.  Within Ontario, our Landlord and Tenant Board is fundamentally broken and it causes tremendous hardship for both tenants and landlords when the other side is acting in bad faith.  We see zero likelihood in the feasibility of renters getting credit for on-time rental payment, as the rental market is comprised of many, individual landlords and tenants and the reporting requirements would be near impossible.

Making Your Home Cheaper to Heat and Easier on the Environment

To help Canadians lower monthly home heating costs, the government is reinvesting $903.5 million into a new Canada Greener Homes Affordability Program to support energy efficient retrofits for homeowners and renters with low- to median-incomes.

Good or Bad?  We’d say this is good news, albeit on a very limited level.  It doesn’t meaningfully impact housing affordability to lower utilities cost, but it can’t hurt.

Combatting Mortgage Fraud

Government will be consulting with the mortgage industry on making a tool available through the Canada Revenue Agency to verify borrower income for mortgages.

Good or Bad?  It’s just a commitment to consult, so it’s hard to say how this will look or if anything will come of it.  Despite that, we’d say that a tool that reduces mortgage fraud – and therefore reduces purchases and demand – is a good thing.

Investing in New Approaches to Homebuilding

Government is earmarking $50 million through Canada’s regional development agencies to support innovative housing projects, including those in modular housing, automation, and robotics.

Good or Bad?  This is a good thing, but the amount seems very low and we’re not holding our breath it will result in meaningful innovation.

Providing Low-Cost Loans to Prefabricated Housing Projects

Earmarking at least $500 million in low-cost financing is to be made available through the program for new apartments that use prefabricated or innovative homebuilding techniques.

Good or Bad?  It’s a step in the right direction in that it makes it more affordable for builders or developers to use new approaches to building, but will these savings be passed on to buyers or make more projects complete than would otherwise happen?  Time will tell!

Offering Low-Cost Financing for Homeowners to Add Additional Suites

Proposing a new Canada Secondary Suite Loan Program, delivered by the Canada Mortgage and Housing Corporation, will enable homeowners to access up to $40,000 in low-interest loans to add a secondary suite to their homes.

Good or Bad?  Our perspective on this is that it is a welcome addition that encourages adding secondary suites, but we predict a limited uptake from home owners and no meaningful increase in housing supply.

Accelerated Capital Cost Allowance Increase

The federal government is increasing the post-tax Accelerated Capital Cost Allowance from 4% to 10% for purpose-built rentals. This will act as a major incentive for the construction of a new supply of purpose-build rentals.

Good or Bad?  This one’s easy – it’s a good thing!  We continue to suffer from a lack of purpose-built rentals in Toronto and the GTA and we need the full gamut of affordable housing – both for owning and renting – in order for our cities to thrive.

That’s it?

There are few additional measures that the Federal government has included in Budget 2024 that are worth mentioning.

• The government intends to restrict the purchase and acquisition of existing single-family homes by large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement. We’ve seen issues in the US with large corporate investors buying up housing stock and thereby driving up real estate prices, so this is a good area to consult on before Canada sees a similar situation.
• The government is also considering introducing a new tax on residentially zoned vacant land and will launch consultations later this year. We’re very much against this idea, as hiking taxes on vacant lands zoned for residential is a risky measure that may result in costs passed on to new home buyers.
• The government intends to establish a subsidiary of the Canada Mortgage and Housing Corporation (CMHC) to deliver flood reinsurance. While not directly impacting overall housing affordability, this is a good initiative as climate change is definitely making insurance and specifically flooding a growing concern.

All in all, a lot of measures in Budget 2024 designed to help with housing affordability in Canada.

While we are in favour of a number of the initiatives in the budget, we do feel like the Federal government has missed the market on their focus in a number of ways.  While some may have limited impact, others may in fact reduce the overall effectiveness of the more impactful measures.

The new taxation measures are likely to make certain types of investment in housing less appealing and that is something we need to avoid if we’re to make housing more affordable for the next generation.

If you like talking politics, budgets and the economy – and you’re looking to buy or sell real estate – then we should really hang out.  Get in touch with us and we’ll make it happen!

In the past we’ve written about exclusive real estate listings, which are homes for sale that are not being listing on the local real estate boards Multiple Listing Service (MLS).  Such homes are considered to be exclusive listings and while they may have a For Sale on the front lawn, they may not, and neighbours may have no idea the home is even for sale.  There can be good reasons as to why an exclusive listing makes sense but in many cases, listing on the MLS system makes a lot more sense.

While exclusive listings have been around for quite a while, there are now new rules around how such listings work and that will have a dramatic change on the number of such listings.  Spoiler alert, you’ll see far fewer exclusive listings moving forward.

Let’s review what’s changed and what it means!

Those are some mighty exclusive pockets.

There used to be no restrictions around exclusive listings.  Whether they were called private listings, pocket listings or something else, it all really meant the same thing –  if they didn’t go on the Multiple Listing Service, it was an exclusive listing.

Whether it was through For Sale signs on the front lawn with an “EXCLUSIVE” rider at the top of the sign, private realtor-only messaging groups, or email blasts out to a database of thousands of agents or prospective buyers, only one thing was consistent – it wasn’t on the MLS.

Apart from that key aspect, exclusive listings varied tremendously.  They could have marketing packages that rivalled what you would see from a listing on MLS, or they could have absolutely no marketing at all.  They could offer a co-operating brokerage commission similar to the norm in the area, or they could offer something radically different.  They might sell to someone the listing agent knew, so no other agent was involved, or it might involve both the listing agent and a buying agent.

It really was simply an alternate approach to selling real estate that some sellers decided they preferred.  Within our team, we’ve had a number of exclusive listings over the years and in each case, we’ve had a frank conversation with our seller clients about the pros and cons of each method.  As of January 1, 2024, those conversations look quite different.

You there, co-operate!

At the start of 2024, many real estate boards across the country implemented a changed approach to exclusive listings.  While a few did it in late 2023, most boards waited until the new year to make the change.

This change was instituted as a result of the national associate of realtors, the Canadian Real Estate Association (or CREA), putting into effect a new Article in the national REALTOR’s code.  Entitled the “Duty of Cooperation” (Article 30 of the REALTOR® Code), the Cooperation Policy requires real estate agents to place property listings on an MLS® System within three days of public marketing, unless an exemption applies. The new policy will also require disclosure of the date in which the property will be published to the MLS® System.

The big change is the addition of this three day rule.  Prior to January 1, 2024, an exclusive listing could be exclusive for as long as the listing agent and the seller wanted.  A property could be listed exclusively for days, weeks, months or even years, with no requirement it ever go onto the MLS system.

Now, once an exclusive is publicly marketed, the clock starts ticking and within three days of that beginning, it needs to go on the MLS system.

So, what’s considered public marketing?

Public marketing means any marketing to the public or anyone not directly affiliated with the listing brokerage/office, excluding one-to-one direct communication.

In the past you could see a For Sale sign on a front lawn with an exclusive rider for weeks or months, you could often go to a section on real estate brokerage’s websites where they promoted exclusive listings and agents could and would message every agent they knew about a new exclusive listing.  If a listing agent wanted to take out newspaper ads or social media ads for their exclusive listing, they could.

As of January 1^st, any of the above examples would start the clock ticking on the three day rule and by that point, the exclusive listing would need to go onto the MLS.  A real estate agent can still discuss their exclusive listings within their brokerage, or call other agents on a one to one basis, but everything else counts as public marketing.

Why the change?

The question that was asked by many real estate agents in the months leading up to this new rule was simple – why the change?

The official answer from CREA to that question is as follows.

MLS® Systems facilitate increased exposure of listings to a broad group of REALTORS® and their clients, benefitting both sellers and buyers. From a seller’s perspective, a listing with exposure on an MLS® System may increase the number of offers received and improve their chances of receiving the most competitive offers for their home. From a buyer’s perspective, they benefit when their REALTORS® have access to a more complete inventory of homes for sale that may meet their needs. From a REALTORS® perspective, efficient and effective cooperation through MLS® Systems maximizes opportunities for REALTORS® to bring together home buyers and sellers.

Our unofficial take on it is that exclusive listings were damaging to the public’s perception of real estate agents.

During a hot market, buyers would grow frustrated at seeing homes sell in a desired neighbourhood without ever being publicly for sale.  It created a perception that real estate agents were creating a shadow or hidden market where ideal properties were kept from the public at large.  While this may not be 100% accurate, it did cause frustration and an increase in confusion amongst the buying public.

The other way it damaged the reputation of the real estate industry had to do with any incidences of exclusive listings that somehow took advantage of the seller of the listing.  A risk of selling off the market (and an exclusive listing is, by definition, not on the public market in full) is that you don’t get paid market price.  Consider an aged seller who was convinced by an unethical real estate agent to sign an exclusive listing and then after weeks or months of no activity, accepting a low priced offer because that’s what “the market” would pay for the home.  Even worse, what if the real estate agent offered to buy it themselves at a price that was lower than the market would have paid?  A terrible situation that, while rare, could occur under the old rules.

Is it a good thing?

In our experience, many ethnical, good agents found the change to be relatively benign.  If you are representing your seller client’s best interests, there are relatively few situations where a lengthy exclusive period makes sense.

Since the new rules came into place, we’ve represented a few sellers who appreciated the benefits of an exclusive listing, and we found the change to not be impactful.

• We were still permitted to share the exclusive listing within our team and the 150 active agents in our brokerage.
• We could still call agents we knew who might have a buyer interested in the exclusive listing.
• We could still do a brief exclusive marketing period in that three day window where we felt out a large group of agents about the listing and our price before we went onto the MLS system.

In short, we consider the change to be a good thing.  Ethical agents who look after their client’s best interests won’t find it negatively impact their ability to sell the home for a good price and any agents who were trying to use the secrecy of an exclusive offer to somehow benefit themselves or another party to their seller’s detriment can no longer do so.

As real estate rules change, it pays to work with agents who understand the new rules and know how to make sure you continue to be well served.  If that sounds like something you agree with, get in touch with us to talking about buying or selling!

We regularly help our clients make decisions on whether renovating prior to selling a home makes sense.  In some cases, renovating and enjoying the improved home for a number of years before selling is actually the best option.

We have lots of experience with what appeals to buyers due to the  umpteen thousand different homes we’ve seen in our work with our clients.  In case you didn’t know, “umpteen” is an actual value – it falls somewhere between “a wee bit” and “a pile” in the measurement scale.

Despite this practical experience in what constitutes a worth-while renovation for an eventual sale, we’re not contractors, architects, electricians or plumbers.  As such, we rely on the expertise and skill of such professionals to undertake the work or to speak to the feasibility or cost of any renovations.  At the same time, we love to learn and we’ve found a resource from the good folks at Canada Mortgage and Housing Corporation (CMHC) that we often share with clients.

The Renovator’s Technical Guide is a way of approaching renovation projects, using the House-As-A-System approach developed by CMHC.  The House-As-A-System approach considers how all the systems in a house interact — and how a renovation to one system can affect another.

While the guide was last updated in 2007, it still remains a fundamental resource that can help you think through how a home works and what renovations make sense for you and your family.  We’ve linked to the full PDF of the document below, but let’s give you a taste of some of the topics it covers.

Exterior Renovations

General Renovations

Energy-Efficiency Renovations

If you want to talk specifically about your home and what we would recommend as work to be done that will add value for your eventual sale, then we’d be happy to come give you our opinion.  Get in touch with us to arrange a time!

The real estate industry talks a lot about sales numbers.  Whether it’s how many sales took place last month or last year, or how many sales took place here, or there, we love to talk about transaction numbers.  Down 10% compared to this time last year, or 400 more sales this month compared to last month and so on and so on.

While those numbers are (arguably) interesting in their own right, we don’t often talk about the number of sales and whether they’re representative of the number of homes of that type.  This is pretty crucial as the number of sales of a particular housing type without mentioning the number of that type in the market can be misrepresentative.

Here’s an analogy that explains what we mean.

Who wants dinner?

Say we tracked a family’s food intake at their most recent meal together and then shared some interesting statistics and Mom, Dad, Teenager and Toddler.

• The family ate a total of 128 individual food items.
• Mom ate 20% of the total meal
• Dad ate 35% of it.
• Teenager ate 3% of the meal, or barely any of it.
• Toddler ate 41%, which is not normal for most families.

Without any detail about the 128 individual food items, we’re left to draw some conclusions that may or may not be accurate.

The first two stats seem reasonable as Mom and Dad eating between a fifth to a third of the total meal doesn’t sound terribly off, though perhaps Dad could take a breath in between bites.  The teenager eating 3% is quite alarming and might make you wonder if he was sick and barely touched his meal.  The toddler eating 41% of the total meal probably conjures images of a very large, very round child.

If we start to get into the specifics of the meal, our interpretation changes dramatically.

• Dad had two pieces of chicken, a baked potato and two rolls, plus 40 peas.
• Mom had one piece of chicken, a potato and 24 peas.
• The teenager ate just 3% of the 128 individual food items, or 4 items total. He ate two pieces of chicken, one baked potato and one roll.  He hates peas, so he didn’t have any.
• The toddler that we thought might be mistaken for a beach ball ate 53 peas. She loves ‘em, and that’s all she would eat of the dinner.

Stories about the number of real estate transactions suffer from a similar challenge in interpretation.  Just looking at the number of sales without talking about the sales per housing type is the most common way these stats are reported and you can see how it could cause a misinterpretation.  If sales are up, but it turns out that most sales were condo apartments – and you didn’t know that – you might be surprised to see that sales of houses in your area were so slow.

There’s an additional nuance that is rarely discussed in real estate sales numbers, which is asking whether those sale numbers are representative of the mix of housing stock we have in the area.  Just like the toddler appears to be consuming the largest portion of the family’s meal until we find out that peas make up most of the meal on a count per item basis, we need to know the distribution of housing types before we can fairly interpret the sales numbers.

Let’s look at the housing types in Toronto to see how they are distributed.

Welcome to Toronto, land of Condos!

When we look at the Land Registry, we are able to see some statistics as to the break down of housing types across the city.

The most common type of housing in Toronto is, by far, apartments.  They make up two-thirds of the total housing stock in the city, with 66% of all housing in Toronto being apartments.

The next most common is detached homes, which make up close to a quarter of housing supply in the city at 23% of all housing.

Semi-detached and row houses (also called townhouses) make up quite small percentages of the housing stock in Toronto, at just 6% and 5% respectively.  That may be quite surprising if you live in a neighbourhood where there are lots of semis or townhouses, but in lots of parts of the city there are none at all.

We know the percentages of housing types in Toronto now, so how do the number of sales compare?

Everyone wants to sell their townhouse apparently.

When we pulled the sales for the city of Toronto in 2023, there are some significant differences between what type of homes sold versus the percentage of the housing stock for each type.

Apartments make up two thirds of the housing in the city, but accounted for just over half of the sales in 2023.  While a lot of people were selling apartments, not nearly as much as those who owned apartments.

In contrast, the number of sales of detached houses was 28% of the total sales last year, despite making up just 23% of the total housing stock in the city.

Semi-detached sales were 9% of the total sales in 2023, but just 6% of the total housing stock.

The big outlier in the sales last year was the number of row (or townhouse) sales.  Townhouses make up just 5% of the housing stock, but they accounted for almost double that number of the sales last year, with 9% of all sales in Toronto in 2023 being townhouses.

So, which one is the plate of peas?

The reason that comparing sales numbers as a percentage with housing types as a percentage is important is because you can easily make a mistake like we initially did with the analogy of the family dinner.  Let’s review the housing stock percentages with the housing sale percentages to see what we mean.

If you thought that Toronto was a city of mostly freehold homes (detached, semi-detached and townhouses), then you’d be stunned to hear that more than half of the sales last year were apartments.  You’d start to make assumptions about no one being able to afford houses anymore and talk about why apartments were the only thing saving Toronto’s real estate agents from financial ruin.

When you know that 66% of Toronto’s population lives in an apartment, the fact that only about half of the sales last year were apartments takes on a whole different light.  Yes, real estate in Toronto is expensive, but apparently townhouses were affordable enough that a lot more people bought them last year than live in them, at least on a percentage basis.

As crucially, just like a pile of peas on a plate might individually make up a high percentage of the total meal, the various price points for different housing types dramatically impact percentage changes in a given market.  If you read that prices are down 10% month over month, is that because the peas (the lower priced apartments) dropped in value massively, or is it because the chicken (detached houses) went down a bit and that had an outsized impact on the market?  Composition, whether it is in a real estate market, or on a dinner plate, matters.

Understanding stats and looking deeper into what’s contained with the headlines is our plate of peas.  Uh, cup of tea.  If you’re thinking about buying or selling, then you should work with agents that understand the market, both in terms of sales as well as composition.  Get in touch with us so that we can look deeper into your market!