Will the VACCINE help the Toronto Real Estate Market RECOVER? - (November Market Update)
The October numbers are released, and that means it’s time for another Toronto REAL ESTATE MARKET UPDATE.
Transcription:
With all that's happening out there, like Biden, winning the election, a COVID vaccine on the horizon and huge immigration target numbers being announced. It's no wonder why you're super confused with what's happening out there. It's kind of a theme with my November real estate market.
Okay. So we'll start by looking at the number of units sold the volume of sales since January, 2018. And you could see here, if we draw a line down the middle, you could see that in April number of sales dropped down about a third of what they were selling before in the previous month. And then in June, it started picking up and we're actually now at a level that's higher than it was before the market is actually on fire because everybody needs more space. Everybody needs a dental work from, or another room, another office, a backyard, maybe because everyone's stuck at home and they realize that they don't actually like where they live. So people are making changes. So the number of sales is actually pretty high. If you compare that to the detached home market, you could see the gap is widening a little bit and the downtown condo market it's actually shrinking.
So we'll move that to the next slide is percentage of overall sales. So you can see in the blue, that's the detached market in all of the Toronto regional real estate board, which is not just Toronto. It's actually includes Durham and Peele and bond. And you'll see that in the blue about half of the transaction that's happened is the detached home market. And you could see that's actually increasing since March really. And there's a lot of activity happening in the detached market. The red line here is the downtown Toronto condo market. Geographically is lot smaller, like very tiny compared to the rest of the Toronto regional real estate board that represents about 5% of the overall market. And then the orange line is the overall condom market. And that's about 25% of sales that's happening. However, if we look at the average prices, you'll see that the detached market is kind of going through the roof and you could see it's on an upward trajectory.
So the average price of a downtown Toronto condo and the red line for October is $735,000. Whereas the average price of a detached home in the Toronto real estate board is $1.2 million. Okay. So here's an actual important slide that I think everybody's been asking about what happened to prices since the beginning of the pandemic in March, 2020, the condo market has dropped by 12% and I'm suspect it's like this everywhere around major metropolitan cities, everyone's trying to leave their real estate and move to the suburbs, go back home and all that stuff when nobody really needs to be downtown anymore. Whereas the overall GTA condo market's down by 5.6% and the detached freehold market is up by 8.7%. But the best way to tell how the real estate market's going is supply and demand. It's simple. The sales to new listings ratio. It basically tells us how many buyers there are and how many sellers are.
And we'll just take the two numbers, divide them out. And a 50% ratio will give you a balanced market. Whereas anything above 60, I think is more of a seller's market. Anything below 40 is a buyer's market, but I don't think it's the end of the world. I think eventually everyone's going to get sick of being in the suburbs and we're going to eventually get back to the office. Maybe not full-time, especially as immigration starts picking up again. And I'm sure you've heard in the news that there was targets of up to 400,000 people coming into Canada every year and guess where they're all coming to. They're either coming to Montreal to come to Vancouver and definitely Toronto. And just to be sure, I want to go look at the stats cam website and they actually projected on a average growth scale, 327,000 people coming into Canada every year.
And on the high side, they're looking at 400,000 as our restrictions are lifted. I don't see why people wouldn't want to come to Canada. I mean, it was such a great place to be economically say, politically safe, financially, relatively diverse, ethnically diverse. And we're more of an inclusive country, which is, there's so many wonderful things to say about it. We're expecting about 400,000 people coming into Canada every single year. And the majority of that in my opinion, will come to Toronto. And the reason why they're coming into Toronto is because that's where all the jobs are. So I looked at the stats can website and we're at 8.9% of unemployment. So at 8.9% by no means, are we at a full recovery pre pandemic? We're looking at unemployment rates of less than 6% around five and a half percent. And as soon as the pandemic hit, we're above 13%.
But I got to say ever since the closures were at the best unemployment rate since then. So I know a lot of people are still out of work and we're still relatively high unemployment, but it's a good sign. And there's light at the end of the tunnel. Pfizer announced the vaccine. That's 90% effective, hopefully it's true. I don't know. They pass stage three clinical trials. Let me know if you'd be one of the first to take the COVID vaccine, but might be a little bit scary, but it's good to see that there's going to be an end to this sooner, rather than later, this is not going to last forever. It's a temporary blip in the market. All I can say is hold the long-term and that's that. So I'm looking for a favor. We're trying to grow this YouTube channel. So either click on like leave a comment, tell me what you're thinking and click on subscribe to learn more or visit our website to book an appointment, to have a quick 15 minute, no obligation call and let's discuss the real estate market until then stay safe, take care and talk soon.