The fine folks at the Toronto Regional Real Estate Board have released their 2026 Q1 report on the rental market.  The report focuses on condominium rental units, both condo apartments as well as townhouses, in Toronto, York, Peel, Halton, Durham, Dufferin and Simcoe.

Here’s a link to the full report if you want to check it out.

As always, we reviewed the data to see what’s worth noting.  Let’s get into it!

More…but also less.

The report shows that across the TRREB boundaries (the GTA and a bit beyond) apartment rentals rose about 11% year-over-year, from 14,800 leases in Q1 2025 to 16,400 in Q1 2026. In the same periods, listings rose 6%, from 22,600 to 24,000, so supply remained heavy enough to preserve renter choice and negotiating power.

Put another way, more places were rented in this first quarter of 2026 than in the first quarter of 2025, but we also saw a somewhat smaller increase in the number of places for rent.  If you combine those two things – an increase in demand, with a smaller increase in supply – you’d naturally assume that rental prices would be going up.

Instead, rents fell across every apartment bedroom type, which is a bit of a head scratcher.  Average apartment rents were lower year-over-year for bachelors, one-bedrooms, two-bedrooms, and three-bedrooms. The biggest winner (for tenants) is the one-bedroom average rent, which fell 4.1% to $2,246 from $2,343. That’s about $100 less per month that landlords of these units are receiving in rent.

Two-bedrooms fell 3.2% to $2,939, and three-bedrooms fell 2.7% to $3,757, so it seems like the bigger, higher priced rental units did better than the smaller, cheaper places.  This is likely due to the level of supply, as while demand for family-size units has only increased over the last number of years, developers have focused on the smaller, single person or couple occupancy units.

Renting out a place?  You’re probably in Toronto.

Another interesting aspect of the report is that Toronto still dominated apartment leasing volume.  Out of 16,365 apartment leases across all TRREB areas, the City of Toronto accounted for 11,411, or roughly 70% of total apartment rental transactions. Toronto Central alone had 8,783 leases, making it the core of the rental market with more than half of rentals taking place there.

York Region had meaningful apartment volume, but at lower average rents than Toronto.  York Region had 1,908 apartment leases in Q1 2026. Its average one-bedroom rent was $2,165, compared with $2,322 in Toronto Central. Two-bedrooms averaged $2,732 in York Region, compared with $3,186 in Toronto Central.

While York is often the home of the highest average priced property in the GTA (trading places with Halton on some months), the average price for a condo unit in York is comparable to the average in Toronto, so while landlords in York are getting lower rent, they also paid less for their units.

Ready to rent?  Consider a townhouse.

The final odd aspect that we found in the report was in the rental townhouse portion of the market.  While the level of activity was pretty stable when compared year over year, the average rent dropped considerably.

When we compare Q1 of this year to Q1 of 2025, townhouse leases were nearly flat, rising 1.7% year-over-year from 1,156 to 1,176. In the same time comparison, average townhouse rents fell overall, with three-bedroom townhouse rents down 7.5% year-over-year. This is contrary to the condo apartment segment of the rental market, which as we mentioned, had larger three-bedroom units see the smallest average drop in rental prices of all the types of condo units.

Our take on this is that tenants who were renting out townhouses were most likely to have seen the comparable cost of owning a place equalize over the past year.  As purchase prices dropped in many segments of the markets across the GTA, a tenant who was already paying considerable money to rent a townhouse began to see prices that would carry for similar numbers to their current rent.  It seems that townhouse landlords had to make their rental rates more attractive to continue to appeal to tenants for their property who might otherwise look to jump into the property market themselves.

Every segment of the market – whether it is rental or for sale, condo or freehold, entry level or high end – has its own trends, rhythms and cycles.  If you’re thinking about buying or selling, renting or renting out, then you need to work with agents who understand the market you’re focused upon.  Get in touch with us to hear our thoughts on how to best move you forward!

While real estate is often focused on numbers and statistics, we can’t forget that it is about people, and people often frame their realities using stories.  As such, we wanted to talk about the story for homeowners in the last little while and what the next chapter will look like given all the recent changes.  Grab a mug of hot chocolate and settle in for the story.

Once upon a time, someone bought a home.

This story should be familiar to you, either because something very similar happened to you, or to people you know.

The story starts with someone buying a home.  They save up a down payment, they work with a trusted Realtor to find, negotiate and close on the home and the happy day arrives when they are given the keys and settle into their new home.

Over a period of time, they live their lives in the new home, all the while, making their mortgage payments and not really paying a lot of attention to what’s going on in the real estate market.  While it can be all-consuming when you’re looking to buy a place, once you own your new home, your interest in the latest listings and forecasts naturally wanes.

Eventually the day arrives when they discover that the home no longer suits their needs.  Maybe they’ve had a life change with the arrival (or loss) of family members, perhaps they need more (or less) space, or their work situation could have changed and with it, where they want or need to live.

As they begin to assess options, a very important question is raised – how much can they spend on their next home?  While income, credit scores, interest rates and other aspects will impact how much of a mortgage they can be approved for now, we’re often involved to help determine the value of their current home.

For the last 20 odd years (depending on which dataset you look at), the story for home owners has been a positive one, with price appreciation.  In addition, for the last 12 years or so, mortgage rates have been at or near historic lows, which means homeowners paid less interest and paid down more principal.

Combine the two and if you or someone you know has bought and financed a home in the GTA in the past dozen years, this is what happened.

1. The value of your home has increased considerably as the real estate market went up.
2. The equity in your home increased as well due to your mortgage payments including significant principal repayments.

When the time came to consider a new home, you found that not only was your home worth a lot more than what you paid for it years ago, you also had a much smaller mortgage than when you bought it.  Hurray!

The combination of these two factors led to home owners being able to move up the property ladder.  While not all homeowners saw the exact same levels of appreciation, or had qualified for the lowest possible interest rates, in general, the story was a very positive one.

Even if a homeowner hadn’t increased their income substantially during the time in the home, they had a significant amount of capital available to allow them to move up the property ladder.  In many cases, these moves took place with the homeowner not seeing a significant difference in their monthly mortgage costs, despite buying a home that was hundreds of thousands dollars more expensive than their prior home.

It’s a good story, with happy homeowners, moving up and forward, finding new and better homes that they can afford, primarily because they were smart enough (or lucky enough depending on who you ask) to buy a home and finance it at a low rate.

Nothing stays the same forever though, and we’ve seen some significant changes in the real estate markets in the GTA in 2022, which leads us to an important question.

What will the next chapter look like?  Odds are, it won’t be as good.

When we look at what has changed this year, we see that the two factors that made being a homeowner such a good story have changed.  We’re going to have to go into a few numbers but I promise we’ll get back to the actual story bit soon.

First off, let’s look at interest rates.

The Bank of Canada has had eight policy interest rate announcements in 2022, as is the norm for the institution.  These overnight rate announcements have a direct impact on the variable rate for mortgages as these rates are what the banks use to set their prime rate.

When we look at what the results of the eight rate announcements were this year, we see that were seven rate hikes.  The latest and last for the year (which took place on December 7, 2022), saw the Bank of Canada raise its overnight rate by 50 basis points to 4.25 per cent.  The last time the bank’s policy rate was this high was in January 2008.

We won’t focus on the numbers too much, but it’s worth pointing out that at the start of the year, you could get a 5-year variable rate in Canada for 0.85%.  After the latest BOC announcement, the best out there for a  5-year variable rate in Canada is 5.30%. That’s an increase of over 500% since the start of the year.  Ouch.

The impact of these changed interest rates on how much of your monthly payment is principal versus interest is massive.

At the start of the year, if you were lucky enough to get the lowest possible variable interest rate mortgage, 81% of your mortgage payment would have been principal repayment.  That’s from your first payment and it just gets better over the term.  On average, you’d have paid 83% principal and 17% interest.

With the latest rates, your first payment would see you pay 27% principal repayment and 73% interest.  Not quite a total reversal, but pretty close.  Over the course of the term, it gets a bit better, and when you look at all of your payments, you’d pay 31% principal and 69% interest.

What about fixed rate mortgages?

On the fixed rate side, things aren’t much better.  These fixed rate mortgages are based on bond yields and they have also gone up considerably in 2022.  At the start of the year, you could get the best high-ratio, 5-year fixed rate in Canada for 2.34%.  By the end of the year, the best option is 4.69%.  That’s just over 100%, which in layman’s terms, means they doubled.  Not nearly as bad as what happened with variable rates, but still a huge change.

The impact of these changed interest rates on how much of your monthly payment is principal versus interest is also huge on the fixed rate side.

At the start of the year, if you were lucky enough to get the lowest possible fixed interest rate mortgage, 56% of your mortgage payment would have been principal repayment.  That’s from your first payment and it just gets better over the term.  On average, you’d have paid 59% principal and 41% interest.

With the latest rates, your first payment would see you pay 31% principal repayment and 69% interest.  Not quite a total reversal, but pretty close.  Over the course of the term, it gets a bit better, and when you look at all of your payments, you’d pay 35% principal and 65% interest.

The end result is that whether you went with a fixed or variable rate mortgage with a purchase right now, only about a third of your mortgage payment is principal repayment.  When homeowners who bought recently look to move up the property ladder or even just renew their mortgage, they will not be seeing the significant level of equity freed up by their mortgage payments that we’ve been enjoying over these years of incredibly low interest rates.  They will have paid off some of their mortgage, but the bulk of it will still be there and need to be paid off before they have the remainder available for a new purchase.

Into the Unknown

The other part of the equation for our story moving forward is how much will home prices have appreciated when current buyers are looking to sell.  While the specific appreciation varied based on the type of home, location and even price point, the real estate market has been on a tear for the past couple of decades.

When current buyers are ready to make a move, will their homes have appreciated to the extent that it is financially feasible?  We already know that they won’t have built up a significant nest egg in the form of principal repayment during their mortgage term, so the pressure lies on the real estate market appreciation to allow it to happen.

If we see a mostly flat real estate market for an extended period of time, then homeowners who want or need to move up the property ladder will find themselves in a bit of a bind.  Unless they have had significant career and income advancement during that time, they won’t have the ability to cash out on their current home and move up the ladder for the same cost.

We will be watching the interest rate environment as well as the average resale price closely over the next year or two.  If interest rates stay the same or continue to rise, then home owners will be in a bind when they want to make a move.  If the real estate market stays flat or even sees more price drops, then the situation worsens.

While what comes next is unknown, we are clear that real estate fundamentals are more important than ever.  If you buy a good home, in a good area, at a good price, whatever happens with the market, you’ll do better than the market.  If that sounds appealing, then don’t hesitate to get in touch.

A few days after the start of the month, you probably notice a flurry of headlines and articles about the real estate market.  This happens because the Toronto Regional Real Estate Board releases the latest stats about the market and a portion of what is shared turns into news stories shortly thereafter.

If you read just the headlines, you’re going to get a very distorted view of what is happening in real estate these days.  While bombastic headlines may drive views, the real story about what’s happening in real estate is often much more nuanced.

There are lots of stats that are produced by real estate boards about the transactions that take place and while the average price and number of sales get the most attention, there is actually one stat that is hugely helpful in predicting what comes next.

We’d go so far as to say that it is the most important stat of all, as it influences all of the other stats that are used in these stories and by pundits when trying to determine will happen in the market next.

It’s called the sales to new listing ratio and here’s how it works and what it means.

It’s about buyers…and sellers.

The Sales to New Listing Ratio (SNLR) tells us how many of the sales we saw this month were new listings versus existing listings.

The number of sales is of course a reflection of how many buyers did a transaction in the market in a given period.  One of the most challenging aspects of predicting what is coming next is determining the number of buyers who are actually out shopping for homes.  Until they actually do a deal, it is nearly impossible to state with accuracy how many buyers are out there, which is the demand side of the supply and demand calculation.

Mortgage applications are one proxy that is sometimes used to determine how many buyers are out there, but that has its own problems.  Not all buyers need mortgages, not all buyers who get a pre-approval are ready to buy immediately and some who get a pre-approval have their circumstances change and the pre-approval lapsing without being used.

The number of new listings is where we get a sense of how many sellers are hitting the market and putting their properties up for sale.

When you combine these two numbers, we know how many buyers have bought and are now off the market as well as how many sellers have just entered the market.

This is hugely important, as it tells us what is happening on the demand and supply side, and it is this mix that impacts sale price and how long homes take to sell.  These two are the most important considerations for sellers as they contemplate going on the market.

How do you interpret the SNLR?

The Sales to New Listing Ratio is expressed as a percentage

In the Toronto and greater Toronto market, if the SNLR is between 50% to 60% we have a balanced market, with sales equal to around half the number of new listings coming on the market. A good amount of sales and a good amount of new options means reasonable, but not excessive, price increases.

Over 60% is heading towards a seller’s market, as we have sales outpacing the new inventory coming on the market.  As the percentage gets higher, we’re going into more and more of a seller’s market, which is where seller’s have more power and that means prices rise – sometimes by a considerable amount.

In extreme cases, we can have an SNLR of over 100%, which means we saw more sales in a month than inventory came on the market, meaning next month is very likely to see a price increase, as the number of total homes for sale has decreased compared to the previous month.

While we haven’t seen it often in Toronto and the surrounding area, if we are under 50%, this tells us that the we are moving into a buyer’s market. The lower the SNLR, the more of a net increase in properties available the following month.  This means prices typically drop as buyers react to having lots of choices by pushing down the price they are willing to pay.

April 2022 saw big…BIG…changes in the SNLR.

Now that we’re clear on what the SNLR is and how to interpret it, it’s time to talk about what has been happening with it.

The below chart is the Sales to New Listing Ratio in the city of Toronto from the past two years.  It is a dynamic chart and will be updated over time to reflect the latest stats.  The below commentary is based on the data that is available as of April 2022.

You can see that starting with the arrival of COVID back in March 2020, we had an extended period where the SNLR was in the 40 to 50 percentage range.  This is a buyer’s market or a balanced market, and we hit the lowest point back in September 2020.  This is for both the condo and freehold market and the SNLR was definitely dragged down by the condo market, which was decimated by COVID in 2020 before rebounding in 2021.

If we look at recent months, you can see that from a high of 121% in December 2021, we have had four consecutive months of dropping Sales to New Listing Ratios.  As of April 2022, we are now at an SNLR of 49%, putting us into a buyer’s market for the first time in Toronto since October 2020.

That is a significant change that predicts that prices will begin to drop in Toronto.  When we look at other parts of the GTA, the story becomes even more significant.

The below chart is for Peel and you can see that the SNLR hit more than a two year low in April 2022, going down to under 40%.  That means Peel is absolutely in a buyer’s market right now.

When we look at what is happening in York, we have another buyer’s market situation.  With four months of consecutive dropping SNLR, the April 2022 SNLR in York is 37.6%.

Turning to Halton, the SNLR story is very similar, dropping for the 4^th consecutive time and now at just under 43%, putting Halton in a buyer’s market as well.

Turning to Durham, the SNLR story is a bit different, as it went up slightly in February, but since then has been dropping, meaning our current SNLR in Durham of 46.6% is the 2nd consecutive month it has dropped and we’re also in a buyer’s market in Durham.

If we head up to Simcoe, the SNLR has also been dropping consistently and has hit a more than two year low of 34.1%.  That is the strongest buyer’s market in all of the seven TRREB areas and Simcoe has seen price drops in the last three months and will likely see another in May.

The only market within the TRREB boundaries that is over the 50% level for SNLR is Dufferin, which is currently sitting at 54.2%.  Despite that, April saw a two-year high in the number of active listings and while it might technically be a balanced market, it is likely going to feel like a buyer’s market there as well.

With the Sales to New Listing Ratio across the GTA ranging from 34% to 54%, there has not been such a good time for buyers in a number of years.  With more interest rate hikes coming, it seems likely that we will continue to see buyers fade from the market.  Unless we see sellers hold off on selling as well, it appears that we will see price drops as the market reacts to changing conditions.

If you are looking to buy or sell in the GTA, you owe it to yourself to work with agents who understand what is going on and what is coming next.  If that sounds appealing, don’t hesitate to reach out to us!

After initially arriving in Canada out in British Columbia, a foreign buyers’ tax made its way to Ontario back in April 2017, with the slightly more ambiguous title of Non-Resident Speculation Tax.

It was set at 15% and applied to properties being bought by foreign nationals within the Greater Golden Horseshoe area.  That’s a giant swath of land that includes not only the GTA but as far as Peterborough to Waterloo, Orillia to Niagara.

The GGH includes the following geographic areas:

• City of Barrie
• County of Brant
• City of Brantford
• County of Dufferin
• Regional Municipality of Durham
• City of Guelph
• Haldimand County
• Regional Municipality of Halton
• City of Hamilton
• City of Kawartha Lakes
• Regional Municipality of Niagara
• County of Northumberland
• City of Orillia
• Regional Municipality of Peel
• City of Peterborough
• County of Peterborough
• County of Simcoe
• City of Toronto
• Regional Municipality of Waterloo
• County of Wellington, and
• Regional Municipality of York

While this Non-Resident Speculation Tax (and 15 other measures in the Ontario Fair Housing Plan) did slow down the market for most of 2017, they did not have a lasting impact.

Back in April 2017, the average price for a property in the GTA was $918,000.  As of March 2022, it’s $1,299,000.  That’s an increase, on average, of about 41% in the five years since the measure was introduced.  There was a temporary drop in prices in 2017 but we’ve seen prices rebound considerably since then.

Last month, the Ontario government announced an increase to the Non-Resident Speculation Tax.  It increased from 15% to 20% and is now (as of March 30, 2022) being applied to all of Ontario, not just the Greater Golden Horseshoe area.

Who does the NRST impact?

As the name states, this tax is designed to hamper non-residents of Canada (i.e. foreign nationals or foreign corporations) from investing in Ontario residential real estate.  It doesn’t prevent them from doing so, but the tax does it make it less lucrative, and the hope is clearly that it will have some impact on rising housing prices.

The Non-Resident Speculation Tax does not apply to permanent residents in Canada.

What type of real estate the does the NRST get charged on?

The NRST applies to the transfer of “designated land”, which is land that contains at least one and not more than six single family residences. Examples of land containing one single family residence include a detached house, a semi detached house, a townhouse or a condominium unit. Examples of land containing more than one single family residence that are subject to the tax include duplexes, triplexes, fourplexes, fiveplexes and sixplexes.

The NRST does not apply to other types of land such as land containing multi residential rental apartment buildings with more than six units, agricultural land, commercial land or industrial land.

How is the NRST calculated?

The NRST applies on the value of the consideration for the residential property. If the land transferred includes residential property and land used for non-residential purposes, the NRST applies on the portion of the value of the consideration attributable to the residential property. For example, if the value of the consideration of the transaction is $3,000,000 and contains one single family residence with a value of the consideration of $1,400,000, and land used for commercial purposes with a value of the consideration of $1,600,000, the NRST would apply to only the $1,400,000 portion.

The question that needs to be answered is of course, what exactly does “value of the consideration” mean?  If it is a market transaction, where the residential property is transferred between unrelated parties, and the buyer (in whole or part) is a foreign entity or taxable trustee, then 20% of the purchase price is due as NRST.  If it is a non-market transaction, a reasonable self assessment is required by taxpayers in apportioning the value of the consideration for the purposes of the NRST.

In what is clearly an attempt to prevent avoidance of the NRST, there is limited ability to prorate the value based on the ownership by a foreign entity.  As an example, if three unrelated people buy a property, and two are Canadian citizens and one is a foreign entity, the full 100% of the value is subject to the NRST.

Who’s exempt from the NRST?

It is clear from a broad perspective who is exempt from the NRST, both on a citizenship basis and on a type of real estate basis.  It becomes murkier when you look at certain circumstances where the NRST would appear to apply but there may be grounds for an exemption.

First, there is a Nominee Exemption, which is where foreign nationals in the Ontario Immigrant Nominee Program may be exempt from the NRST.  They will need to be part of the program at the time of the purchase or acquisition, they will have to have applied or intend to apply to become a permanent residence of Canada and they have to certify they will occupy the property as their principal residence.

Next, there is the Protected Person (Refugee) Exemption.  This is, as expected, an exemption that may be available if they have been conferred with refugee protection and they intend to occupy the property as their principal residence.

Finally, the third major category of exemption is the Spousal Exemption.  The foreign national who buys with their spouse (and the spouse must be part of the purchase) where their spouse is a Canadian citizen may be able to qualify for an exemption from the NSRT.  A spouse is defined as either someone who is married to the other or who have cohabited for three years or longer or are parents together of a child.

Canadian citizens who reside abroad are not subject to the NRST and it is not relevant as to whether they live in Canada or not.

We’re not surprised to see the increase in the tax rate for the Non-Resident Speculation Tax, nor the expansion of the tax to all parts of Ontario.

On the tax rate aspect, it is an easy political gain for the government, as the impacted parties are non-voting, non-residents.

The expansion of the NRST to all parts of Ontario also makes sense from both an optics as well as practical perspective. During the COVID pandemic, many parts of Ontario outside of the Greater Golden Horseshoe area have seen an influx of urban buyers taking advantage of the ability to work remotely.  While it is questionable as to whether foreign buyers have been the ones purchasing in these areas, anything that is perceived to be helpful in curtailing price growth to the benefit of local (or in this case, national) residents is an easy call to make.

If you’re buying or selling real estate, you should make sure you work with agents who keep on top of changing regulations that could impact the level of competition or sale price.  Don’t hesitate to get in touch with us if you want to discuss your situation!

As the world grew accustomed to the implications of COVID-19 and governments made rules and regulations to try to deal with the pandemic, real estate transactions continued to take place.

While there was an initial lull in most price points, housing types and areas in April 2020, since then we’ve seen unusually high levels of activity in real estate transactions.  While John F. Kennedy may have coined the phrase “A rising tide lifts all boats” to express the idea that a well performing economy benefits all, it turns out that not all boats are lifted equally.

We looked into what happened to average prices in the seven geographies that comprise the GTA to see what has taken place since March 2020.  Here’s some insights from that work.

The GTA average price went up $186,000 since the start of COVID.

Back in March 2020, the average price for a home (including freehold as well as condo properties) was $902,000.  Some 15 months later, as of June 2021, the average price is now $1,089,000.  That’s an increase of over 20% since the start of COVID, and about $186,000 on average.

Toronto was not, in fact, the big winner.

While we tend to assume that Toronto is the most expensive place to buy, and therefore that price increase makes that even more the case, we find it isn’t true when we check the data.

The average price in all of Toronto back in March 2020 was $989,000.  After 15 months of COVID, the average price of homes in Toronto is now $1,079,000.  That’s an increase of about $90,000, or 9.2% over the 15 months.

Peel beat the average but just barely.

The average price in Peel did a bit better than the GTA as a whole but it was more or less middle of the pack.

Back in March 2020, the average price in Peel was $839,000 and some 15 months later, we’re now at $1,041,000.  That’s an impressive increase but with a dollar increase of $201,000 and a percentage increase of 24%, it just squeaks in at a bit better than the GTA as a whole.  If you’re in Peel, you can still take comfort in the fact that your real estate market whomped Toronto!

York did pretty well if you look at dollars but less so on percentages.

We can look at price changes from both an actual dollar increase as well as in percentages.  When we do so, lower average price areas can show impressive gains in percentages that don’t translate to as impressive numbers in real dollars.  The reverse also holds true and with the highest average price in the GTA at the start of COVID, York couldn’t see the same huge percentage gains as some other areas.

In York, we saw the average price go from $1,038,000 to $1,241,000.  That’s over $200,000 in average price appreciation since the start of COVID, which is not too shabby!  On a percentage basis, the average price went up 19% over the past 15 months, which puts it at the second lowest percentage increase in the GTA, second only to Toronto’s 9% increase.

Halton was one of the top performing areas since COVID started.

It hasn’t been mentioned as much as other parts of the GTA in news stories, but Halton has been doing very well over the past 15 months.

Back in March 2020, the average price for a home in Halton was $933,000 and since then it has increased to $1,122,000.  That’s an increase of $289,000, or 31% since the start of COVID!  It isn’t enough to claim the top prize but Halton was the second highest gaining area in the GTA in terms of percentages and the third highest in terms of absolute dollars.

Dufferin beat Toronto but that’s about it.

Dufferin went into the start of COVID with the lowest average sale price in the GTA, around $615,000.  It ended with still having the lowest average sale price, now at around $798,000.

While it may be the most affordable place in the GTA on average, Dufferin residents can take comfort in the fact that they saw their average price go up 29% since the start of COVID.  That’s a lot more than Toronto’s 9% increase.  Even on an actual dollar basis, Dufferin went up $182,000 over the past 15 months, whereas Toronto went up $90,000.

Durham takes 2^nd place.

There have been lots of stories in the media about Durham region and how much prices have risen since the start of COVID in cities like Oshawa, Pickering and Whitby.

When COVID began back in March 2020, the average price for a home in Durham was a reasonable $654,000.  Since then, the average price has gone up to $917,000, which is a real dollar increase of about $262,000!  In percentage terms, Durham went up 40% over the past 15 months, which is a massive increase in a short time, second only to one other part of the GTA.

Simcoe was where you wanted to be!

The big winner in the GTA from a real estate average price perspective was Simcoe.  With mostly smaller municipalities in the area, Simcoe started at the 2^nd most affordable part of the GTA, with an average price back in March 2020 of $650,000.

Over the past 15 months, the average price in Simcoe went up by $335,00, which means a 51% increase in average price!  The new average price in Simcoe as of June 2021 is now just shy of $1M, at $986,000.  If you’ve been living northeast of Toronto over the past little while, you’ve likely done very well!

When we look at each of the municipalities in the GTA, it is quite surprising which places have done the best since the start of COVID.

Toronto has fared the worst on both an absolute dollar level as well as percentage basis, having seen the average price go up about $90,000 or 9% since the start of COVID. It seems likely that the high levels of condo apartments in the city contributed to that relatively small overall average increase.

Simcoe was the big winner from a real estate perspective, going up the most for both actual dollars as well as in percentages.  The average price in Simcoe went up a whopping $335,000 over the past 15 months, which works out to a staggering 51% increase since the start of COVID.

If you’re considering buying or selling, make sure you work with agents who understand what has changed since COVID impacted our lives.  Don’t hesitate to get in touch with us!

In our work with clients on both the buying and selling side, we are regularly talking about what is going to happen next with the GTA real estate market, currently experiencing an absolute frenzy of competition and escalating sale prices.

In the latest market data (February 2020 to February 2021) we saw an increase in the average sale price in the GTA by 14.9%.  Freehold homes (detached, semi-detached and townhouses) in suburban areas saw growth of over 20% in the past year.  For a detailed review of the Toronto market, check out our latest analysis here.

Back in early 2017, we saw a market similar to this current market.  After an insanely busy start to the year that saw prices skyrocket, the Ontario government released the Ontario Fair Housing Plan on April 20, 2017.  It included a number of measures to make housing “fair” and immediately cooled the housing market.

This implies that the market reacted to the OFHP and said “Oh, OK then, let’s all take a step back”.  In reality, an understanding of market conditions often follows this pattern:

1. Realtors and their clients actively buying and selling (or trying) notice a shift in the market.
2. A while after we notice, the media starts picking up on the shift and reporting on it.
3. A while after the media stories have become constant, the general public who isn’t buying or selling real estate understands what has been going on.
4. A while after that, the market starts to shift again, as “everyone” says this is crazy and people start backing away from selling or buying.
5. Shortly after that, the government steps in and takes some measures to intervene. The market had already shifted again, so it appears that the government intervention was very effective, but in fact it had already started to happen.

If you’ve ever had a friend or spouse who offers to help clean up after dinner as you’re just drying the last dish, you get what the government’s timing is typically like.  It seems to be the nature of how government reacts that by the time they take steps, the market has already started to shift.

While real estate agents and buyers and sellers carefully parse every latest sale and market data to try to see if a change is happening, as of the end of March 2021, we’re still seeing a very strong seller’s market with tons of competition driving prices higher and higher.

Given the buyers and sellers in the market haven’t yet taken a step back, it would appear we’re not quite at the point where we will see government intervention.

The Ontario 2021 Budget was just released and on April 19, 2021 we will see the Federal Budget released.  Let’s take a look to see if the government is taking any action to cool the market and if there are specific expectations for any real estate focus for the Federal budget in mid-April.

2021 Ontario Budget

The provincial budget that was released March 24, 2021 did not have any measures specifically designed to cool the housing market.

There was a considerable amount of speculation in the media as to whether steps would be taken similar to back in 2017, but the threat of a 3^rd wave of COVID as well as ongoing concerns about the economy as a whole has resulted in no direct action being taken.  The frenzy in the GTA housing market, while making buying very challenging and increasing the gap between home owners and renters, is one positive spot in the economy.

The focus in the Ontario budget was on measures for mitigating and defeating COVID as well as supporting people throughout these challenging times.

The only real-estate related aspects to the budget were commitments to infrastructure building, and more indirectly, broadband internet access in rural areas, which is hugely important to real estate values in those areas.

2021 Federal Budget

The Federal Budget is focused on the country as a whole so it can be difficult to implement changes that equally impact all parts of the country.  With very different real estate markets existing across the country (urban vs rural, 416 vs 905, east coast vs west coast), any intervention needs to be broad enough to be applicable across the country, yet nuanced enough to be effective where it is required.

The easiest way to achieve that goal is to create federal policies or changes that support initiatives that provinces or municipalities could implement.  In essence, setting the stage for more local changes that accurately reflect the real estate markets we’re seeing.

We reviewed various ways in which the federal government might try to set the stage for helpful intervention into specific real estate markets.

• Increasing the tax credit for rent paid to see more benefit for tenants paying higher levels of rent in the urban areas that see high rental rates. By increasing the tax credit, such high-end tenants save more money for potentially entering the real estate market as a home purchaser.
• Modifying the capital gains payable on a rental property in a few ways. One would be to incentivize the owner to sell to the current tenant via a reduced capital gain on the increase in the value of the property.  This could provide more housing supply to the market, as investor owners agree to sell to tenants.  A second would be the ability to defer the capital gains if you purchase another investment property within a short time-period of selling.  This may not increase the supply, but it could provide added incentive to see turnover in the market.
• Implementing a capital gains tax on principal residences, similar to how it operates in the US. Currently, we have no capital gains on the proceeds of the sale of your principle residence.  At the same time, we also do not allow the claiming of interest paid on mortgage payments, which is permitted in the US.  There is some talk about implementing some partial form of capital gains tax on principal residences, but it is likely to be strongly opposed by homeowners.  In our opinion, it would take a major financial crisis to allow there to be public support for such a measure.  Many Canadians view their home value as a significant, tax-free portion of their retirement plan and changing that will be deeply unpopular.
• An increase in lending restrictions on investors, such as was recently done in New Zealand. Requiring a higher down payment on investment purchases (such as 40%) could restrict the number of investors in the market and take some pressure off of prices for end-users who plan to live in the home.  There are significant challenges in monitoring and enforcing such restrictions.  Such a change is not likely to be done directly by the Federal Government but measures to support such a change could set the stage for it being done in the future.

We may also see some measures that will support provincial or municipal tools to intervene in the real estate market (such as land transfer tax changes, vacancy taxes, etc.) but it is unclear whether the Federal Government will wish to muddy the waters much.  It is likely the Federal Budget will mirror our Ontario Budget in focusing on health and jobs.

Predicting the future is a difficult job at the best of times, and predicting government initiatives can make the crystal ball even foggier.  We spend lots of time thinking about the market and we’re always happy to chat about it.  If you want to talk, don’t hesitate to get in touch.