Stalled for Fall

Toronto’s August real estate market saw a dip in freehold sales and a small uptick in condo sales compared to a year earlier.  Average prices for semi-detached increased which bucked the trend (although this segment is a very small part of the Toronto market) in the detached and condo apartment segments.

Despite higher levels of immigration, affordability is a big challenge in the current interest rate environment.  Hanging over the August real estate market was uncertainty of another interest rate increase on September 6, 2023 (which did not come to pass), seasonality with 2023 being the first post pandemic summer as people vacationed along with macroeconomic headwinds of higher unemployment and inflation.

Looking ahead, with more than 3 months of inventory at the end of July and August 2023 (~2 months is the norm) and the sales to new listings ratio at 44%, buyers are in the driver’s seat.  If buyers are renters entering the market, they will likely be selective and cautious when making offers.  For buyers who also have properties to sell, they too will be conservative since there isn’t the confidence of yesteryear that they would be able to sell quickly and at an expected price.  For those buyers who are selling first, they may choose to maintain their prices because with a roof already over their head, they have less urgency to move.

Market sentiment could be further dampened as the City of Toronto announced on September 6: higher municipal transfer taxes for properties over $3M.  In addition, the city is looking into increasing the vacant home tax, removing the cap on street parking rates, introducing new taxes on properties where the purchaser owns more than one property, a foreign buyer land transfer tax, commercial parking levies, graduated municipal property tax rates for high value residential properties and for properties that are not the owner’s primary residence.

For all these reasons, I think that we will see a slower than usual fall market.

Feel free to drop me a line if you have any questions.

And now over to Shen…

Shen Shoots the Breeze 

Dave and I recently came back from a weeklong trip in Nova Scotia. Our itinerary included driving along the Cabot Trail which meant renting a car.

A friend of ours, Rosaline introduced us to Turo – a car rental site that allows owners to rent out their vehicles. Pricing can be between 25-40% less than the larger car rental companies.

When we booked for our mid-August trip (peak season), the Turo site offered many appealing vehicles like a Mazda Miata, Teslas and luxury SUVs like BMW X5 for similar prices of standard cars at the car rental companies. The site was easy to use and provided lots of photos and details, ie, type of gas it uses, age and colour of vehicle as well as pick up location. Some owners also offer to drop off the car at the airport (or other locales) for an additional fee.

I made a booking for a vehicle at end-July and it cost me just over $115/day for a midsize sedan. The site allows you to indicate an estimated pick up time and return time. Unfortunately, the day before we were due to fly out, I received a cancellation notice from Turo as the car we had booked was not running well. I had to then make a new reservation on Turo (which was still less expensive than the national car rental companies) however by then the options were limited. In the end we booked a better but more expensive Audi A4 wagon for $183/day.

Meeting the owner was smooth and we were happy with the experience despite the initial booking snafu.  All in all, we would revisit booking Turo again for future road trips. For us, Turo’s biggest risk is if the car suddenly becomes unavailable where the owner cannot offer a replacement unlike car rental companies.

Leave a Reply

Your email address will not be published. Required fields are marked *