Today we’re sharing the 2019 real estate statistics for Toronto and recapping the top real estate news stories affecting home Buyers, Sellers and their agents.
2019 was the year the Toronto market rebounded from the chaos caused by the Non-Resident Speculation Tax in 2017, the stress test in 2018 and the ensuing buyer and seller panic and confusion. 2019 was the year that saw Buyers regain their confidence and Sellers show (a little less) greed.
Though bidding wars for hot properties in hot neighbourhoods were still the norm in 2019, we didn’t see the frenzy of 20+ offers on properties like we did in 2017; we also didn’t see good properties struggling to sell, as we did in 2018. While Buyer demand still outstripped the supply of houses for sale and inventory was low, in many ways, it was a much more balanced market than we’ve seen in Toronto in the last ten years. 2019 was a good year to be a Buyer – and it was a good year to be a Seller too (at least by Toronto standards).
2019 Toronto Real Estate Market Statistics
|City of Toronto||Peel Region||Durham Region||York Region||Halton||Total GTA|
|Days on Market||20||20||23||28||25||23|
|% of Asking Price||100%||98%||99%||98%||98%||99%|
|Price Increase 2019 vs. 2018||5.7%||5.7%||2.9%||2.2%||1.6%||4%|
When you compare 2019 to 2018 across the GTA:
- 12.8% more homes sold
- Prices increased by 4%
- It took one less day to sell a home
The Pre-Construction Condo Market in 2019
In the pre-construction condo market in Toronto, it was another disappointing year. Sure, there were lots of great new projects announced that sold out quickly – no doubt Torontonians and investors still have a healthy appetite for buying pre-construction condos. The disappointment came with the number of older condo project cancellations that left buyers in a lurch. By some counts, there were as many as 1,101 units cancelled in 2019 (and who could forget the 17 projects that cancelled in 2018). Here’s why it matters:
Imagine that you made a $50,000 deposit on a pre-construction condo in 2016 or 2017, assuming you’d be moving into it in 2020 or 2021. And then, out of nowhere, the builder decides to cancel it. While the builder might blame the city or the bank for the cancellation, in reality, the decision is often financial – they stand to make more money if they cancel it, refund the deposits and launch a new project at current market prices. As the Buyer? You get your $50,000 back – but to buy something today, you’re paying 2020 prices – not 2016 prices. For a lot of pre-con Buyers, that means they are priced out of the market.
2019 Real Estate News
In 2019, we saw some important industry changes (and proposed changes) that will impact the Toronto real estate market, home Buyers, Sellers and the agents that represent them.
1 – Proposed Reform to the Real Estate Business Brokers Act (REBBA)
We were excited about the long-overdue changes to the rules that govern Ontario’s real estate industry, introduced in 2019. Assuming the proposal passes, the 2002 Real Estate Business Brokers Act (REBBA) will soon be known as The Trust in Real Estate Services Act (and yes, that means the rules haven’t changed much in 18 years!). While we wish they had taken things a bit further (we’d love to see an end on one REALTOR representing both the Buyer and the Seller in the same transaction), the proposed rules are a step in the right direction.
If approved and implemented, the new Trust in Real Estate Services Act means that:
- Home Sellers will have the option of disclosing the details of competing offers in a multiple buyer situation. Right now, buyers have a right to know how many offers they are competing with – but they aren’t allowed to know the contents of those offers. While it’s usually to the Sellers advantage to keep offer details private, this rule change will allow open auctions on properties, if the Seller chooses.
- RECO will be able to immediately levy fines to agents and brokers for minor infractions (e.g. breaking the advertising rules) vs the currently painful process that usually results in no penalties to the rule-breakers. The process to revoke real estate licenses for more significant violations will be simplified too.
- Agency relationships are complicated in Ontario real estate, and one of the proposals involves removing the word ‘Customer’ – basically meaning that Buyers will be either represented or self-represented. This proposed change acknowledges that one brokerage can really only work in the best interests of either the buyer or the seller.
- REALTORS who claim they are ‘specialists’ will have to back it up with certifications and meeting certain criteria.
- Real estate agents will be able to incorporate personally
2 – The Arrival of Zillow in Canada
Zillow finally arrived in Canada in 2019. Zillow is the leading property search website in the US and gives buyers and sellers access to a ton of home data – it’s also a nice platform to use (unlike realtor.ca). Unfortunately, some of Toronto’s biggest brokerages refused to share their listing data with Zillow, so while the site contains a lot of listings, it’s not a one-stop-shop for a house hunt. We think that’s anti-competitive and not in the best interest of the Sellers those brokerages represent.
3 – Availability of Sold Prices
After a painful, decade-long court battle over making sold prices publicly available, 2019 was the first full year where consumers were able to access this information online. The world didn’t end (we knew it wouldn’t), and consumers seemed to take advantage of the opportunity to be better informed. It’s a shame that TREB hasn’t yet equipped its members with the ability to share that information easily with our clients via the tools we already use (Collab). I hope this changes in 2020.
4 – Airbnb Regulations in Toronto
Late in 2019, Toronto short-term rental landlords lost their provincial court appeal regarding the new Airbnb rules, which is estimated to affect about 5,000 of Toronto’s 21,000 short-term rental units across the city. As part of the new licensing, the rules require that:
- Airbnb properties must be principal residences, meaning you can’t list an investment property on Airbnb – it has to be your primary residence for at least 180 days of the year.
- Short term rental operators can rent out a maximum of 3 bedrooms – or their entire property – up to a maximum of 180 days per year.
- Secondary suites (e.g. basement apartments) can only be listed on short-term rental sites if they are the primary residence of the person listing it (this is probably the most controversial change, affecting about 700 owners in Toronto).
- Airbnb operators must now pay a municipal tax of 4% on earnings from rentals less than 28 days long.
- Licensing will begin in spring 2020.
We’ll soon see how many operators choose to abide by the new rules, how many decide to rent out their apartments to long-term tenants, how many decide to sell and how many will simply take over their basement suites.
Related: Toronto’s Airbnb Rules
#5: CMHC First Time Home Buyer Incentive Program
As of September 2019, a new incentive became available to first-time Buyers in Ontario. It’s essentially a shared equity program, where the Canada Mortgage and Housing Corporation (CMHC) contributes part of the downpayment in exchange for sharing in the appreciation (or loss) when the home eventually sells. For resale homes, CMHC will contribute up to 5% towards the downpayment; for new construction homes and condos, they’ll contribute up to 10%.
So what will 2020 bring to the real estate market? We’ve written a 5-part series giving you all predictions. Stay tuned as we release them over the next week!