The Toronto real estate market has undergone such a massive turnaround over the past 3 months I wouldn’t doubt that we will look back on this as an historic event. I’m not saying things will forever be blue skies and sunshine for Toronto real estate investors and home owners, but its clear that in the past 12 months we have witnessed 2 seismic shifts. The first happened in October 2008 when the market began to free fall, and then the second occurred around May 1st when buyers came out of the woodwork in droves and ate up every available listing in sight, sending prices sky rocketing.
I’ve been talking a lot lately about supply and demand on this blog. The figures are staggering over the past few months. It is becoming increasingly difficult for the analysts and economists to explain what has happened in this city over this relatively short period of time.
Rather than try to add more words to the discussion, I found a great visual display over at guava.ca that illustrates what I’ve been talking about. Take a look through the charts found on this great site and see how the last 12 months compares to activity over the past 5 years. Look at the “V” shape for the total months of inventory. Very revealing.
chart from guava.ca
July 28th, 2009 at 8:36 am
That’s actually a pretty frightening chart. I guess we’re not headed to an over-saturation of condos in the core anytime soon.
July 29th, 2009 at 9:15 am
Andrew, does the chart indicate houses, condos, or all real estate?
I don’t think we are headed for a glut of condos downtown. Inventories are really low, and very few new projects have been announced in the last 12-18 months (and a few that were announced are cancelled or put on hold).
July 31st, 2009 at 1:50 pm
When we were aggregating data at CondoCatch.com over the last 6-months, we noticed that the vast majority of projects had pushed back their occupancy dates. When there is a recession, short-run demand decreases causing prices and quantity demanded to decrease. If prices continue to decrease, quantity demanded increases back to pre-recession levels (i.e. what we saw as a spring boost in sales figures you reference in your supply and demand post). However, it seems like developers are holding back today’s inventory by pushing back finish dates to sell at tomorrow’s higher prices. So how long do you think prices will remain low? Also, do you think the discounts offered on longer-term projects (2012+ occupancies) make financial sense for buyers?
August 6th, 2009 at 1:31 pm
How much of the buying frenzy do you think is attributable to the regular sunshine cycle? I can see lower prices pushing many folks into buying where they would normally just lookielook and tirekick until autumn.