Show & Sell - May 2024

The spring real estate market has been HOT…

And sweaty….with knees weak and the palms of sweaty realtors hoping for some sort of activity out there. With sales down 17% the past 3-months, the GTA real estate market doesn’t have much of a spring in its step.

May 2024 Highlights:

• Insolvency Woes

• Inventory Glut

• Rental Reversal

• April Inflation Numbers

• April Market Stats

👇 Watch: CPI, Rent Control, Special Assessments, Kitec Plumbing, and more:

INSOLVENCY WOES

Record Lows and Record Highs

What’s there to be happy about these days?

AI is getting scarier everyday, WFH is becoming ‘WTF I have to return to the office?”, and meme stocks aren’t hitting like they used to. Even though stock markets around the world are hitting record highs…

Canadians are really feeling the pinch:

And even more so for the Canadian Business Owner.

With business insolvencies up a staggering 81% quarter over quarter:

Did you know that businesses with 1-99 employees comprised of 98% of all employers businesses in Canada in 2022? We really underestimate the pivotal role small businesses play in the Canadian economy. And we’re all feeling it in one way or another.

Personally speaking, I’ve heard stories from realtors who have left real estate for reliable, full-time jobs. And many stories from part-time agents who quit altogether. A blessing in disguise. Because in times like these, consumers need an optimal mix of experience, grit, and passion from whom they hire. Not desperation, greed, and misaligned values. Regardless of what they are hiring for.

INVENTORY GLUT

Spring Market

Speaking of misaligned values, let’s jump into the nearly 45% surge in active listings… in ONE MONTH:

This was the highest rate of growth for any April since the Foreign Buyer Tax was implemented in 2017:

With lots of listings comes lots of options… for buyers. And where are we seeing most of these listings?

The condo market.

April 2024 has brought about a record number of new condo listings in the past 12 years:

And 2024 has been stockpiling condo inventory:

It’s worth noting that most condo owners are investors.

Think of the household that paid off the mortgage for the house they raised a family in…. and paid $180K for. A condo lets them put another foot in the market!

Think of all of the pre-construction projects we see (well, used to see) advertising flexible deposit structures in ‘up and coming’ areas.

Think of the maintenance-free living!

The condo is the perfect choice. More affordable than a single family home, much easier to maintain, and more importantly, always in demand for rentals.

Or are they….

RENTAL REVERSAL

Toronto Rents 🥶 Alberta Rents 🔥

We’re starting to see Toronto condos lease listings surge.

Remember the lockdowns? That fever dream? When the city of Toronto was a ghost town?

My sister was living in Fort York at the time. Her landlord had the audacity to try and raise the rent. I negotiated with her landlord to lower it.

And it was easy.

All I had to do was point out all of the units available, in the same building, on the same floor, that were listed for less than hers.

It’s much easier to keep a tenant/customer than it is to acquire a new one.

Especially during a global lockdown.

And according to Urbanation…

“…average condo rents in the GTHA have declined 7.4%, the largest six-month decrease recorded during the past 15 years…”

Not including the pandemic.

All of these newly completed condos are impacting both the rental and resale market. There was a 21% increase in newly registered condos in the past 4 quarters compared to the same period ending Q1-2023. That’s quite the jump!

And according to Rentals.ca…

We can see Alberta rents soaring 16% year-over-year:

With Atlantic Canada and Manitoba recording 12% & 10% increases respectively.

Wonder what these figures will look like a year from now…

APRIL INFLATION NUMBERS

Inflation Cools to 2.7% in April

This is good news but I don’t think it’s good enough for a rate cut anytime soon. Especially when the CPI report stated that ‘food prices lead the deceleration’…

When we all know that’s hard to believe...

Maybe we’ll see even faster deceleration for May!

APRIL MARKET STATS

Active Listings Hit 6-Year High

April welcomed a lot of new supply into the market. New listings jumped nearly 30% from March and active inventory is up a staggering 45%.

As we welcome spring and the hopes of the start of rate cuts this summer, I believe over the next few months that that demand (and prices) will tick up in the freehold market.

For condos, if inventory continues to pour in and sales volume remains low, we may enter a buyer’s market where prices may hold or trickle lower.

As we head into the weekend, let’s end on a lighter note. Because this one started off a bit harsh! But it’s important to do our best to understand the reality of the times we’re in. It’s not great out there, we’re inundated with too much information (most of it negative or false), and we don’t know who or what to trust.

We can combat this misinformation overload through education, smart decision-making, and most importantly, action. Because we learn and perform our best by doing.

If we zoom out, there’s A LOT to be happy about! If we have our health, people who support us, and the means to earn a living, we are doing pretty dang well compared to a lot of people in the world.

Gratitude, friction, and action create abundance.

… And with the weather we’ve been having… it’s a lot easier to smile. 🙂 

Wishing you a fantastic weekend!

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