Higher interest rates amidst increasing inflation were the drivers behind a drop in Toronto’s April real estate sales. With these macroeconomic factors taking center stage, supply remained relatively tight as listings were down 18%. Sales volumes decreased by 36% compared to last April, while prices increased by 14%.
A lot of ink has been spilled about the 36% decline in sales transactions compared to April 2021 but a closer look of the historical context will show that 2022 volumes appear weak in the shadow of 2021’s frenetic activity.
The following chart provides a breakdown of monthly Toronto real estate transactions for the past 5 years.
– April transactions have been lower than March in 2020, 2021 with 2022 continuing this trend.
– April 2022 transactions are in line with historical norms prior to the 2020 pandemic.
The following chart compares YTD January – April sales transactions over the past 5 years.
– YTD 2022 transactions trail only 2021 which saw record setting volumes from pent up demand due to delayed 2020 pandemic activity.
– YTD 2022’s 12,489 transactions are 14% higher than the 5-year average (ie. 10,981) and more than 35% higher than pre-pandemic volumes.
Conclusion: While volumes are down compared to 2021, they are still much higher than pre-pandemic years.
As for prices, they are down in April relative to peak prices in Q1. It is expected that interest rates will increase again in June. Stayed tuned next month when I take a closer look at interest rates and prices.
Shen Shoots the Breeze
I don’t have an American Express card but I remember their tagline, “Don’t leave home without it”. I recently returned from a trip to Boston and the card that saved me untold hours and frustration was the Nexus card.
I’ve read about delays upon arrival in Toronto but nothing could prepare me for what I saw last week. We were told after touching down that our plane would be on the tarmac for awhile as there was a shortage of customs staff. About 30 to 40 minutes later, we were told they found a gate for us and we would be able to taxi there but not necessarily disembark. Luckily we only needed to wait about 15 min before being allowed off the aircraft – the flight attendant indicated sometimes the wait could be upwards of an hour (yikes). Once we got off the plane, I thought I was well on my way until I got into the main hallway which was a wall of humanity – all of whom also arrived from international points of origin.
There was no way to move and the people surrounding me had no idea how long the wait was – some surmised that it could be another hour before being even allowed into the arrivals hall.
Out of blue, someone shouted out if there were any Nexus card holders. A number of us, including yours truly jumped out of the line and followed an airport staff who walked us into the arrivals hall into the Nexus line. I had never been happier to have invested in the $50 for a 5-year Nexus card. The Nexus line was short and I got dumped into the baggage hall in no time.
When I arrived to the correct carousel, what awaited us was another obstacle. The carousel has being used by 3 flight arrivals and the flight from Boston was last to arrive. There were so many passengers waiting to be processed by customs that they were not able to pick up their suitcases, so the luggage from subsequent flights could not come up the carousel ramp. A bunch of us realized we needed to take the bags off the carousel in order for our bags to come out. After about 20 minutes of combined hard work and now also extremely sweaty, we could finally see the Boston cargo coming up the ramp. I quickly found my suitcase and made my way to the exit quickly praying that customs would not do a random check nor would they ask me to do a random Covid test.
Many of you may have already read about this in the news. While my experience is not unique, I wanted to warn you to be prepared. For now, if you can, drive to your destination. I don’t know what Billy Bishop is like but consider using that airport for now. Failing that, come early (if you’re flying out from Pearson), hydrated and bring a healthy dose of patience! In the meantime, apply for a Nexus card – it is the most precious card in my wallet!