PRESIDENT'S LETTER

Welcome to the Summer edition of The Collection. We hope you are gearing up for a fun and relaxing season. Whether you plan to take advantage of the city’s many cultural activities and sporting events, or head to cottage country for fresh air and downtime, we hope you have a great summer.

For the market watchers, we’re obviously seeing a shift in housing activity following the busiest sales run in Canadian history. Now, with rising interest rates, inflation, and supply, the market is changing.

At a recent panel discussion, the host remarked how we’re transitioning from a period of ‘free money’ to a period of ‘cheap money.’ This may be true, but after a long run of rising housing prices, rate increases are affecting affordability. Many buyers are sitting on the sidelines as they track pricing and explore inventory. You’ve likely heard this referred to as a rebalancing or a normalization, and these are important words.

That said, despite year-to-date sales being down roughly 30% as of May, it’s interesting to note that sales of $2 million priced homes are up 18%, $3m homes are up 12.5%, and $5m homes are up 2% year-over-year. This just illustrates how hyper-local the Toronto market remains, and how every area behaves in its own unique fashion.

As for the decline in total sales volume, I don’t view it as the bottom falling out of the market. Rather, I interpret is as activity that is pulling back a little bit. Prices couldn’t continue to rise unabated at 30% per annum.

Today, buyers find themselves in a stronger position than at any time since the start of the pandemic. Though technically it remains a ‘seller’s market’ with 2.1 month’s supply, buyers are now able to influence terms, pricing, and closing dates.

Moving forward, sellers will have to readjust their expectations and appreciate that buyers will have a greater say in the transaction. But for anyone interested in real estate, whether seller or buyer, know that Greater Toronto remains a city of neighbourhoods, and that no two communities behave the same way. You will always be best positioned for success by working with a knowledgeable and experienced Realtor.

Enjoy the summer and we look forward to speaking with you soon!

HARVEY KALLES Chairman & CEO MICHAEL KALLES MBA, dip.RPD, President