Michelle Ervin – Post City Magazine

As we sat down at the Gran­ite Club for our sixth annual Real Estate Round­table, last spring’s nar­ra­tive of bully offers and bid­ding wars had given way to slow­ing sales. Here’s what the GTA’s top mar­ket experts had to say about whether we should brace for bear­ish con­di­tions in 2013.

2013 Pan­elists:

PAUL MIKLAS – Pres­i­dent, Val­leymede Homes
HARRY STINSON – Condo devel­oper; pres­i­dent, Stin­son Prop­er­ties
ELISE KALLES – Toronto’s lead­ing car­riage trade bro­ker
BRAD LAMB – Broker-president, Brad J. Lamb Realty Inc.
BARRY COHEN – Top Cana­dian sales rep­re­sen­ta­tive, Re/Max
MATHEW ROSENBLATT – Prin­ci­pal, Cityscape Devel­op­ments; Dis­tillery Dis­trict devel­oper
MICHELLE ERVIN – Mod­er­a­tor and senior edi­tor, Post City Mag­a­zines
GARTH TURNER – Invest­ment advi­sor, best-selling author, for­mer MP and min­is­ter of national revenue

POST: Let’s start with a com­ment econ­o­mist Sherry Cooper made at last year’s round­table: “What we will see in the hous­ing price range and condo price range is a con­tin­ued excess demand and prices ris­ing. It’s just that they prob­a­bly won’t rise as much. The big unknown is what hap­pens to the for­eign inflow of capital.”

Garth Turner: The mar­ket seems to be in a state of tran­si­tion. How deep it changes and how quickly, we don’t really know yet. Cer­tainly the condo mar­ket does have ten­sions, and I think that her com­ment was prob­a­bly too strong in that regard. I think the condo mar­ket will be weaker than many expect. For­eign cap­i­tal is the other key point that Sherry brought up. It’s a dif­fi­cult one. There was an arti­cle in the Globe and Mail yes­ter­day – I’m sure we all read it – where there is no good track­ing of num­bers for for­eign investors in Canada, so you tend to get a lot of anec­do­tal evi­dence, which I think then becomes urban myth.

Brad Lamb: Lis­ten, there’s no doubt that the real estate mar­ket is slower now than it was last spring and in 2007. There’s lots of good rea­sons for that, and prob­a­bly some of the rea­sons are what you spoke about. But the prin­ci­pal rea­son why we’ve had a real estate mar­ket change in Canada is, in my opin­ion, mostly due to the sus­tained changes to the poli­cies that CMHC [Canada Mort­gage and Hous­ing Cor­po­ra­tion] has car­ried, by Jim Fla­herty. He’s changed amor­ti­za­tion dates, from 40 years to 25 years, in five years – it’s made real estate 35% more expen­sive. So it’s taken a huge num­ber of first-time buy­ers out of the mar­ket. He’s [Fla­herty] also sav­aged the one-million– to 1.5-million-dollar mar­ket because he said no longer can you put five% down. You now have to put 20% down.

Barry Cohen: Sherry’s com­ments are more to do with con­do­mini­ums, and this con­ver­sa­tion has spilled over into real estate. Detached, single-family homes have risen, both in activ­ity and in price, year after year. That’s very stable.

Elise Kalles: It’s gone down since August.

Brad Lamb: But if and when there is a set­back in the real estate mar­ket in Toronto (and of course it is going to come; Garth thinks it’s going to be tomor­row – he’s thought it’s going to be tomor­row for the last 10 years), we are going to have a reces­sion, a bad one, and real estate’s going to get whacked. Con­dos will get whacked worse than houses in Toronto.

Harry Stin­son: It’s a totally dif­fer­ent finance world now. What I’ve noticed now ver­sus ’88, ’89, ’90: we were sell­ing indi­vid­ual con­dos then, and it was peo­ple who had no inten­tion of clos­ing. It was just a spec­u­la­tive game. And now the buy­ers – I don’t see that same thing. They’re buy­ing. They’d like it to go up, but they’re not say­ing to you, “Well, I’m just going to flip it.”

Mathew Rosen­blatt: There’s a dif­fer­ence between invest­ing for the long term, to be part of the rental pool, and some­one try­ing to flip it. If you’re buy­ing a whack of them, you might not be able to afford it, when the times comes, when you actu­ally have to own them and prices are going down.

Paul Mik­las: But who’s your investor? Your investor’s com­ing from China or Iran and the prob­lem is, they’re not mak­ing any­thing on their money over there, or they’re wor­ried about their money, so they’re look­ing for a place to place it. Because I can tell you, we’re build­ing 522 units. The major­ity of it – I’d say 55% of our sales – went to for­eign buy­ers. They came up with a 25% deposit, and they’re look­ing for some­where to place their money.

Garth Turner: I don’t buy the “It’s dif­fer­ent here” argu­ment. It’s not dif­fer­ent any­where. Where prices go up far faster than incomes, far faster than indi­vid­ual or fam­ily incomes -

Paul Mik­las: But they aren’t going up fast any­more, Garth, they really aren’t: one% a year at best at this point. It’s really actu­ally slowed down. When you start talk­ing to Elise or Barry Cohen and Brad, and they’re telling you there’s prod­uct now out on the mar­ket and where, for exam­ple, you’d see in one area 15 sales, you only saw five this past month. That shows you the mar­ket is adjust­ing and there’s no bubble.

Barry Cohen: A cor­rec­tion comes after years of double-digit infla­tion. We don’t have that here. That’s what hap­pened in Van­cou­ver; that’s what hap­pened in the ’80s, ’90s; that’s what hap­pened in the US: four years of double-digit infla­tion. We have steady five years. We’re where we’re sup­posed to be.

POST: Elise, despite slow­ing sales, we are still see­ing prices inch upward, espe­cially in our neigh­bour­hoods where the million-dollar-plus mar­ket is strong. As a top car­riage trade bro­ker, what are you see­ing on the ground?

Elise Kalles: Well, it’s def­i­nitely slowed down, but I have to dis­agree with Garth. In the price range we work in, a lot of them are for­eign buy­ers, and they’re clos­ing, they’re solid. The Toronto mar­ket, I think, is sus­tain­able in our neigh­bour­hoods. Cer­tain neigh­bour­hoods will always be in demand, and single-family homes with easy com­mut­ing dis­tance to down­town will hold their value. I’m not say­ing it’s not going to go down. It’s going to take longer. But Canada has moved to eighth place in the annual rank­ing of the most tax-friendly places for com­pa­nies to do busi­ness. Toronto is a pop­u­lar des­ti­na­tion for peo­ple look­ing to move from their big city from else­where in Canada, the U.S. and abroad. It’s also attrac­tive because of the mul­ti­cul­tural com­mu­ni­ties. You go to the pri­vate schools or the uni­ver­si­ties, 80% are from India, from China.

Barry Cohen: If you just step back and look at the year, last year we had price appre­ci­a­tion pretty much right up until June, then we flat-lined, and then had maybe another one% gain from June until Decem­ber. Dur­ing that sec­ond half of the year, all you had was activ­ity falling. We are actu­ally start­ing this year up two% over last year.

Garth Turner: Sales or prices?

Barry Cohen: Sales.

Garth Turner: Actu­ally, we’re not. If you’re going by the Toronto Real Estate Board [TREB] num­bers, the TREB num­bers are wrong. TREB says it was a 2.4 increase in Decem­ber. They revised last December’s num­bers. It’s actu­ally a 2.1% decline.

Com­ment: Because Garth knows bet­ter than TREB? He has access to dif­fer­ent infor­ma­tion? Come on…

Barry Cohen: I think Elise can agree with me: in our mar­ket­place, you had lack of con­fi­dence the sec­ond half of the year, and then all of a sud­den, Decem­ber rolled around, and we had this con­fi­dence and this vigour that we’re feel­ing right now in January.

Brad Lamb: And we’re on two dis­tinct mar­kets now because the condo mar­ket and the hous­ing mar­ket are dis­tinct. If you put a house up for sale right now in Toronto, you’d prob­a­bly get mul­ti­ple offers. If you put a condo up for sale, you’ll prob­a­bly sell for 95 to 96% of the ask­ing price.

Garth Turner: Let’s look at my lit­tle neigh­bour­hood of Lea­side where you have list­ings now that are not sell­ing in 30 days anymore.

Brad Lamb: House listings?

Garth Turner: You get the odd one that hap­pens. One sold last night – it was 999, sold for 1.1 – but that’s because you’re below the mil­lion price point. You get 1.1 to 1.5, that stuff’s sitting.

Com­ment: I just pulled the sales data for the past 90 days for Lea­side. Median days on mar­ket is 16.5 – half what Mr. Turner is claim­ing. And those of us who actu­ally work in the real estate indus­try know that the higher the price, the longer it takes to sell. I am glad he just noticed that. Oh, and the most com­mon price of houses in the past 90 days – $1,595,000.

Brad Lamb: The real­ity is, we’ve lived in an unreal mar­ket­place for eight or 10 years in this city, and we all got used to it, and it’s just not real life. So it was like a mar­ket on steroids; the mar­ket was cheat­ing. Now the real guy stands up. He’s not cheat­ing, he doesn’t run as fast, and that’s the mar­ket we’re really in. We can’t expect to sell prop­er­ties the day they list. You can’t expect to have a lineup of peo­ple down the street show­ing it. That’s just not real­is­tic in any city.

Elise Kalles: And I think it’s healthy in the long term.

Garth Turner: And you don’t want a mar­ket where you have gains and house prices that are exceed­ing gains in house­hold income. That will catch up to you. The gap’s being made up by debt, and we just get inun­dated by how much debt peo­ple are build­ing up. Again, we’re look­ing at a cou­ple of dif­fer­ent mar­kets. Elise is talk­ing about the high-end mar­ket, which is really unique: small num­ber of sales. In the over­all scheme of how many sales in the GTA in the year there are, this is one%.

Elise Kalles: But hous­ing prices in Canada, Toronto espe­cially, are lower than any other major global country.

Garth Turner: We’re not a major global city, though, are we? You’re going to com­pare us with Lon­don and New York? Paris?

Com­ment: We are the 4^th largest city in North Amer­ica after Mex­ico City, New York and Los Ange­les. I would say we are a global city.

Elise Kalles: We’re cos­mopoli­tan. We have everything.

Brad Lamb: Well, we’ve changed a lot. I think for peo­ple that live here, we are. Peo­ple who live here appre­ci­ate what we have. You travel else­where, like Paris and Lon­don, and Sin­ga­pore, and these cities, I would far rather live here than any of those cities.

Elise Kalles: I was going to say I have clients from Lon­don, Eng­land, that bought a house here. They’ve never been hap­pier. They could never have this kind of house in London.

POST: What per­cent­age of your cur­rent sales results in bid­ding wars?

Barry Cohen: Noth­ing more than 30%.

Elise Kalles: I don’t have bid­ding wars.

Barry Cohen: Don’t for­get, we have gen­er­ally two mar­kets. We have the fin­ished prod­uct and we have what every­body called before a phe­nom­e­non (which is really not): it’s reju­ve­na­tion of the older, tired neigh­bour­hoods. So those homes, the infill hous­ing we refer to, that’s where you’re going to see bid­ding wars, on those older, tired homes. For ulti­mately they want to knock it down, and you’re com­pet­ing with builders and users alike.

Garth Turner: You take a look at the aver­age single-family detached home in Toronto. It was $818,000 in 416 in May; now it’s $736,000. That’s a pretty god­damn big drop.

Barry Cohen: But you’re work­ing with Decem­ber. You’re work­ing with the lat­ter part of the year.

Garth Turner: I know it’s Decem­ber, but if you’re say­ing, “Oh no, don’t worry, we’re going back up $80 grand, that’s going to hap­pen by the spring,” I don’t think it’s there.

Com­ment: It does every sin­gle year, he knows this. Decem­ber is the low point, May is the high point. The real num­ber (I guess he is still using his secret stats) was $820,816 for aver­age detached price in the 416 in May 2012. In Decem­ber of 2011 the aver­age was $701,846. So yes, the price can and did rise $118,970 by the spring – a rise of 17% in 5 short months. Even now, we have seen prices rise from $722,393 to $823,329 for just the detached prop­er­ties and from $494,127 to $552,014 over­all. That is 14% and 12% respec­tively. And it is not even May yet!

Brad Lamb: If you look at the first five months of the year, we had two months break 10,000 sales, which never hap­pens, ever. So a lot of the sales were done to beat the new CMHC rules.

Garth Turner: One final point: when you see sales declin­ing for a sig­nif­i­cant period of time – not month over month, but year over year – that means some­thing when it’s com­bined with a price reduc­tion. Will this recover quickly and just zip back up again? That’s a leap of faith I’m not ready to take because I think that the con­di­tions have changed.

Com­ment: We don’t have year-over-year sales declines, nor do we have even one month of price declines. So… what’s his point? Every­one also needs to remem­ber, this is some­one who buys and sells one or more prop­er­ties every year. Garth Turner flips houses pro­fes­sion­ally. He has a vested inter­est in prices ris­ing every year and makes a lot of money off of that fact. Which is in direct con­flict with his per­sona of doom and gloom and mar­ket going to crash.

Mathew Rosen­blatt: Do you think that there’s any dif­fer­ence in the con­di­tions today, like this month, than there were three months ago or six months ago, other than sort of psy­cho­log­i­cal ways that pur­chasers might be view­ing the mar­ket? I don’t see any big real changes hap­pen­ing. If peo­ple want to buy a house for their fam­ily, their for­ever house, not that much has changed.

Garth Turner: I think what Brad ref­er­enced is a key point, and I think the injury to afford­abil­ity is fairly sig­nif­i­cant that we saw. And the changes that were made, and the major changes – amor­ti­za­tion drop­ping, cash-back mort­gages are now dis­al­lowed and you’ve got no million-dollar insur­ance from CMHC – those are really sig­nif­i­cant changes, and I think that they kind of squeeze the mar­ket like this. You’ve got the million-dollar-plus list­ings. Now you have to cough up 20%, plus a land trans­fer tax.

Barry Cohen: They’re all sell­ing well. It’s affected the condo market.

Garth Turner: No, actu­ally, they’re not all sell­ing well.

Barry Cohen: TREB num­bers, GTA is sit­ting at 85,000 homes year after year with the excep­tion of 2007 that went to 93,000, and then 2008 was at 70,000. We’re where we’re sup­posed to be.

Harry Stin­son: The more infor­ma­tion and sta­tis­tics you hear, the less you can fig­ure out what’s going on. Everybody’s got a healthy lit­tle sta­tis­tic that jus­ti­fies their posi­tion. The real­ity is, though, that real estate in Toronto is still regarded, I think, increas­ingly, as a decent invest­ment. The stock mar­ket, most peo­ple haven’t any inten­tion of even study­ing, let alone get­ting involved in, anymore.

Com­ment: No. The doom say­ers have no stats to back up their posi­tion. None. I read at least one, usu­ally more, news sto­ries every day that say the mar­ket is going to crash and prices will fall 25%. How do they back up these claims? They don’t. Notice that Mr. Turner has noth­ing but what he says, no stats to back up what he says. Except to claim that other num­bers are wrong. All of us with oppo­site posi­tions have actu­ally data to back up what we say.

Garth Turner: I agree, but that’s part of the dan­ger. When you have a soci­ety where 70% of the peo­ple in that soci­ety own the same thing, you’ve got a poten­tially dan­ger­ous situation.

Com­ment: Oh my god, what about cars? There are 7,243,898 cars reg­is­tered in Ontario, with 8,523,300 dri­ving age adults from 16–74 years old. That makes for an own­er­ship rate of 85% – that must be 15% more dan­ger­ous than hous­ing! The car mar­ket is going to collapse!

Harry Stin­son: It’s safer to own a house than to own shares in Gen­eral Motors or Nor­tel or whatever.

Brad Lamb: But that’s where the condo mar­ket saves us because the condo mar­ket is replac­ing apart­ment build­ings, so you don’t have to build a condo and sell it to an end user. You can sell it to an investor, and as Harry stated, and it’s true, there’s a very good busi­ness in that. In the condo mar­ket, about 5,000 to 6,000 units a year of the 25,000 we’ve been sell­ing will find their way into the rental mar­ket, real rentals, and that’s a good thing. We’re actu­ally decreas­ing the amount of home own­er­ship and increas­ing the amount of home rentals by deliv­er­ing con­do­mini­ums, so it’s actu­ally work­ing to oppo­site ends from what you’re talk­ing about.

Barry Cohen: What do we have, a vacancy rate of less than 1.7%?

Elise Kalles: Less than 1%.

Harry Stin­son: There’s a change in people’s atti­tudes toward rent­ing an apart­ment down­town. It’s a prac­ti­cal, viable thing.

Elise Kalles: There’s a lifestyle buy­ing a condo today. I bought a lit­tle tiny apart­ment at the King Edward Hotel because, for sen­ti­men­tal rea­sons, when we were mar­ried, it was very spe­cial – there’s no lobby like the King Eddie. I closed on it yes­ter­day. They have a work­out room, they have every­thing, they have a club floor like in the finest hotels. All that comes with it. It’s 750 square feet.

Brad Lamb: How much did you pay for it?

Elise Kalles: $479,000. I didn’t upgrade anything.

Paul Mik­las: Look at the con­dos, look at the hotels that are being revi­tal­ized, and look at all these young kids actu­ally grad­u­at­ing from school. They can’t afford some­where to go, and they want to work in the Finan­cial Dis­trict, and they have an oppor­tu­nity to go to for­eign investors. They don’t want a house, and they don’t want to live north of New­mar­ket. They want to be right in the city where they can build their careers and go for­ward, and this is actu­ally what the condo mar­ket is providing.

POST: What are some of the best areas of our neigh­bour­hoods to buy into right now?

Mathew Rosen­blatt: For­est Hill, Rosedale… places where peo­ple with the money, if they want to live in an area, have the abil­ity to pay 10%, 20%, 30% more. If you’re on a salaried posi­tion, even if it’s a good area, you will have [price] ceil­ings. These other areas, there really aren’t ceilings.

Paul Mik­las: Ban­bury, which is right across from Edwards Gar­dens – you’ve got the DVP and 401 close by, you’ve got the Don Mills mall, you’ve got great school­ing. All the ameni­ties are right there. If you’re search­ing to upgrade to a sec­ond home, find some­thing there that you can do a fixer-upper on. Stay there because the com­mu­nity is fan­tas­tic. That’s where I would go.

Garth Turner: I would take a slightly dif­fer­ent approach. I don’t think it’s so much the neigh­bour­hood if you’re look­ing for best value.

Com­ment: What? Real estate is all about loca­tion, duh…

Paul Mik­las: That’s the best value. That’s why I’m there, that’s what I do all day long. I start with value, then I go to amenities.

Garth Turner: The actual phys­i­cal neigh­bour­hood is some­what irrel­e­vant because we all know what the good neigh­bour­hoods are. What is more impor­tant is where peo­ple can find value. I think the biggest change in that regard is the one we talked about a lit­tle while ago, which is CMHC now with­draw­ing insur­ance for prop­er­ties over a mil­lion dol­lars, and that’s now where you’re going to see the best value. From a mil­lion to a mil­lion four to a mil­lion five you’re going to see much bet­ter value there -

Paul Mik­las: Wel­come to Banbury.

Garth Turner: (con­tin­ues) than you would have prior to last year. I think there’s a strong eco­nomic argu­ment there because those buy­ers are under pres­sure. The own­ers, the ven­dors right now, they’re under pres­sure, and they’re under pres­sure because of that move. You may not think it, but you go into a Lea­side or Ben­ning­ton Heights or Moore Park – the num­ber of peo­ple who actu­ally bought in there, over the last few years with five, 10, seven, eight, nine% down? Sig­nif­i­cant. They’re gone because CMHC won’t give them mort­gage insurance.

Harry Stin­son: But if they’re there now.

Garth Turner: No, I mean those new buyers.

Harry Stin­son: But you’d have that same sit­u­a­tion of, do they have to sell? They are liv­ing there, they don’t have to sell.

Garth Turner: There are always peo­ple who have to sell.

Com­ment: And always those who have to buy. Which is why the mar­ket stays strong.

Mathew Rosen­blatt: Is the ques­tion, what’s the best value or where should you be investing?

POST: What neigh­bour­hoods offer the most value?

Barry Cohen: I think it’s harder even as a real estate prac­ti­tioner to pick the next neigh­bour­hood or the neigh­bour­hood, but I think, if you look at the trends, because you guys in the condo devel­op­ment are in there, you look at these tired neigh­bour­hoods like we talked about before: homes that are on big lots, well sit­u­ated. Those homes, because they’re in the GTA, they’re under pres­sure. God’s not mak­ing any more land. Let’s knock them down, let’s build them, and then you’ve got the Dis­tillery  District.

Mathew Rosen­blatt: That might be the best value in the city.

Full dis­clo­sure: Rosen­blatt is the cre­ator of the Dis­tillery District.

Barry Cohen: You were say­ing it. And Leslieville, look at the Beaches, their bor­ders are expand­ing. I’ll give you an exam­ple: like Don Mills – that area you’ve got great shops, high­way access, old, tired homes – there’s an oppor­tu­nity a lit­tle bit like what Paul was say­ing on Ban­bury… Bathurst and Shep­pard – that’s the same old thing. If you fol­low that prac­tice all the way through the city, you’ll find your neigh­bour­hood that is tired and ready to rock and roll.

Paul Mik­las: You’ll get in at the bot­tom and you’ll enjoy the lifestyle sur­round­ing it.

Mathew Rosen­blatt: All of these neigh­bour­hoods are in gen­er­ally equal tran­si­tion. I would look at con­cen­tric cir­cles from the core, and the closer you’re going to be to the core, espe­cially in the future of this grow­ing city, with grow­ing traf­fic, expen­sive gas, peo­ple want to live down­town. That’s why they are buy­ing the con­dos. But if you want to buy a house, and you want to be close to the core, it’s going to cost you a lot of money today and it’s going to cost you a for­tune tomor­row because there are only so many houses that are down­town. Peo­ple don’t want to com­mute, and you’re going to have a big pop­u­la­tion fight­ing over a very small stock of houses.

Brad Lamb: Houses will rise more vis-à-vis con­dos because you can­not add a sin­gle house in the city of Toronto. You can build a few town­houses here and there. So you’ll see house prices rise more than condo prices, except in pock­ets like per­haps Yorkville because we can add more stock to con­do­mini­ums for a while, but you can’t add any more houses in Rosedale. It’s fixed. If you want to buy a house in Rosedale, there are more peo­ple that want them now than 10 years ago, and 10 from now, there are going to be more peo­ple who want them than today.

Mathew Rosen­blatt: The prox­im­ity to the core will also, in part, be rel­a­tive to how fast the prices will go up over time.

Paul Mik­las: Pic­ture a nucleus and then draw rings around it. The closer you are to the nucleus, the more it’s going to cost you. The fur­ther you get away, it’s more travel time and it’s less money.

Elise Kalles: The Annex has gone up more than any area.

Brad Lamb: It’s sort of afford­able. It’s not multi-million dol­lars. You can buy a house there for a mil­lion some­thing, and it’s right downtown.

Elise Kalles: It’s like being near Fifth Avenue, but not being right on it.

POST: Fast-forward a few months – where is the mar­ket a year from now?

Brad Lamb: I think we’re going to be in a sim­i­lar posi­tion to what we are now. It still prob­a­bly will be con­sid­ered a seller’s mar­ket, but I think it will be a more bal­anced mar­ket. Prices will rise slightly over­all, vol­umes will prob­a­bly drop, new condo sales will be down – prob­a­bly 14,000 units in 2013 – and I bet you we do less than 80,000 in resales from 85,000.

Com­ment: Not that I am kiss­ing up, but Mr. Lamb is one of the smartest guys in real estate. Helps that he thinks the same way I do!

POST: Will condo prices rise as well?

Brad Lamb: I don’t think condo prices will rise. They may fall slightly, but we’re at $600 a foot. I think that’s where we should be for right now for the mar­ket. You can still buy a small condo, put 25% down and rent it and make pos­i­tive cash flow, so that kind of pro­tects the price at $600 a square foot. I don’t think we’ll see a big increase from there this year, but long-term, prices are going up in Toronto.

Com­ment: As they have for the past 50 years. As all things rise in price over time. Model Ts cost $240 100 years ago and now a Ford Tau­rus starts at $28,000. Things change…

Barry Cohen: I gen­er­ally agree with Brad. I think that this year will be much like last year. I think it will be just as hot in the spring mar­ket, and I think it will level off in the fall mar­ket, and I don’t think that the con­dos will be as big a story as they have been in the past year, and the rates will stay low.

Harry Stin­son: I think the story is going to be that there isn’t a mas­sive col­lapse of the condo mar­ket: that it sort of sta­bi­lized and sales went down, but that it wasn’t the end of the world and peo­ple weren’t bail­ing out and there were thou­sands of list­ings out there, and that they con­tinue to be rented and peo­ple are sit­ting on them.

Paul Mik­las: I think it’s going to be a steady ship, the waters are good, smooth sail­ing. Maybe a 1% gain, pos­si­bly 2% on the homes side and on the condo side, I agree with Brad. I actu­ally think it will just be a flat line. I don’t think there will be any gains, any losses on that side.

Mathew Rosen­blatt: Flat or slight increase on hous­ing, and new con­do­minium sales I think will be way down just because I think there will be way less prod­uct. I think that the down­town condo mar­ket over­all will be down slightly, but not any­thing material.

Garth Turner: There’s lit­tle doubt 2013 will be a year of tran­si­tion for Toronto real estate. The media will still be pumped on the occa­sional multiple-bid story and in denial over chang­ing con­di­tions, and that may mask things for many peo­ple. But the truth is, new hous­ing starts, condo projects, build­ing per­mits and investor con­fi­dence are all on the wane. Eco­nomic growth will be tepid and unem­ploy­ment creep­ing higher. In other words, the con­di­tions are ripe for a weaker mar­ket in the spring of 2014 than now. We should expect lower aver­age prices, flat-lined sales and the can­cel­la­tion of scores of new res­i­den­tial towers.

Com­ment: It would be hard to be more wrong if you tried. Unem­ploy­ment just fell again, both in Ontario and Canada. The TSX is at 12,810, up 8.5% from 11,811 in Novem­ber. The DOW closed at its high­est ever yes­ter­day. Doesn’t sound like investors are los­ing con­fi­dence. Toronto hous­ing starts bounce up and down, rang­ing from around 25,000 in early 2011 to 70,000 in spring 2012 to almost 17,000 in the begin­ning of 2013, accord­ing to the CMHC. They may be down now, but that is cherry-picking the data. Much like say­ing Decem­ber has lower prices than May. In the same vein, May has higher prices than Decem­ber. Any­way, notice that 5 peo­ple say some­thing sim­i­lar, with one dis­senter. Add me to the 5 and you have 6 peo­ple who actu­ally work in real estate all say­ing the same thing. Who do you believe? Would you trust 6 mechan­ics to give car advice, or an accountant?

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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long term toronto real estate out­look 2013

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