As expected, low interest rates and pent up demand resulted in a booming month for Toronto’s real estate market. The table below outlines double-digit increases in volumes and prices for freehold properties, while condos experienced brisk sales compared to relatively flat prices compared to a year ago.
If it feels like there’s been no let up on the hyperactive freehold market, it’s because there hasn’t been. Typically, prices spike in the spring, take a sojourn in the summer as families go on vacation and then spike again in the fall before taking respite in the dark and cold winter months.
The chart below tracks 4th quarter average freehold pricing onward with October set as the baseline equal to 100. From there, we will index the subsequent five months from November through to March of the next year with October to see how the 4th quarter of one year leads to a rise in prices in the spring of the following year.
- Oct 2016 to March 2017 (blue line) was the 2nd hottest period which experienced a considerable run up in prices starting from December 2016 through to March 2017. (After the fair housing plan and introduction of the Non-Resident Speculation Tax in Q2 2017, the freehold market softened and only returned to these levels in 2020.)
- Prior to the start of the pandemic, from January 2020 to March 2020, the yellow line shows that average freehold prices were rapidly rising.
- In the past 5 years the stretch from Oct to March of the following year, 2020/2021 is the only period where there was no winter lull when all the prices from November to March were higher than the baseline October price.
So what comes next? Based on high demand and low interest rates, I’m expecting the spring of 2021 to continue to be strong despite whispers of regulatory changes coming in the form of stricter stress tests that would curb affordability.
Shen Shoots the Breeze
You’d think that a realtor would know all there is about house renovations. However, we can find ourselves in similar territory with our clients as they consider doing renovations and having to figure out what they don’t know and whom to listen to for advice.
Over 15 years ago, we purchased our home which was a fixer upper. We wanted to put our personal stamp on the home. By undertaking the renos, it also gave us credibility to literally put ourselves in our clients’ shoes as they face updating properties.
We are about to embark on redoing the façade of our house. Our home has mansard-roof where the top half is covered by black asphalt shingles. The shingles were fairly new when we bought our house and we didn’t feel good about ripping out perfectly good shingles for the sake of cosmetics. Last year, the roof shingles started peeling, our 1960s windows were whistling louder than ever amidst the cold winter wind and the dripping of rain from the hole in our eaves trough was waking us up. So this year we are going to take the plunge.
We are learning about the differences in exterior cladding: vinyl, aluminum, fibre cement board, PVC siding, longboard, etc… With windows, we are figuring out whether to go brick-to-brick, which window styles and grills: casement vs double hung, Georgian, ½ Georgian etc… The plethora of colours on all these products can also be just as overwhelming especially as these decisions feel more final than picking out the wrong paint colour for a bathroom.
Whatever the case, may we offer the following advice if you’re undertaking something you’ve never done before:
- Speak to your friends and neighbours. Ask them whom they worked with and what they would do differently if they could do that renovation again.
- Do some research online. If you’re finding that you’re getting dissenting viewpoints, ask a professional on their thoughts when they come to give you a quote
- Don’t just settle on one quote, get several. Ask them about their warranty, how long it may take, how soon are they taking in new projects. What kind of deposit structure are they looking for?
- You’ll be tempted with pinterest and social media pictures which are great resources, but look around your neighbourhood, what do you see that you like or don’t like. We decided we like the Georgian style windows on certain homes but felt that in the end, this wouldn’t fit the architectural style of our home.
- Set a budget. You may want to do everything at once or you may need to do the renovation in phases. With our home, all the bathrooms and kitchen were begging for a renovation. Our budget prevented us from doing the kitchen but in the end we were glad for that limitation as we ended up with a better kitchen 5 years later.