The October TREB Numbers Are In……………And?


7 minute read

November 6, 2017

….and I think this is now a regular feature.

It’s not my favourite, to be honest.  I’ve always preferred writing about my experiences out there in the real estate trenches, interacting with buyers, sellers, agents, and the entire cast of characters in this crazy industry.

But I know the TREB numbers are something many readers want to discuss, and if I wrote about free home evaluations or some-such topic today, the readers might hijack it anyways.

So let’s look at the numbers that were released (on time for once…) last Friday, and try to take the pulse of the market…


I’m constantly amazed by the amount of reader interaction here on TRB.

I started this blog back in early 2007, and as I’ve often mused, I basically wrote blogs exclusively for my mother and my friend back then.

Five days per week back then, I wrote blogs, when basically nobody was reading.

I enjoyed creative writing, and it was almost therapeutic to see my thoughts about real estate (and everything non-real estate related that I discuss here…) come up on the screen on a daily basis.

It wasn’t until probably three months into writing that I saw my very first comment.

I didn’t even know there was a comments feature on my blog!

Fast-forward a decade, and I have a friend who tells me, “Honestly, I don’t really even read your blog – I start with the comments.”

A quick scan of the “Top Posts of the Month” shows me a slew of reader feedback and interaction.

98 comments on the “UBS Global Real Estate Bubble Index” post from two weeks past.

85 comments on the “Toronto Is North America’s 13th Least Affordable City” blog post from last week.

81 comments on the “New Mortgage Rules” post.

And even 78 comments on the post about the September TREB numbers.

Real estate has never been a hotter topic.

It’s never been more contested, debated, and in some ways, controversial.

One look at the number of comments on this blog proves my point, as it’s easy, and at times, automatic, for readers to disagree.

It would seem to me that the topics that cause the most debate aren’t that specific in nature, ie. whether it makes more sense to buy a semi-detached versus detached, or buy in Riverdale versus Swansea.  It’s the “big picture” discussions that people are so passionate about, and I think, in a way, that makes sense.

First of all, the bigger-picture topics often have the longest time horizons, and thus the opinions and answers aren’t as easily, or quickly proven.

Secondly, I think the bigger-picture topics are ones on which most people can provide an opinion, because you don’t have to own a detached house, or a detached house in Riverdale or Swansea, or even own a house at all, in order to offer an opinion on the direction, or future, of the Toronto real estate market.

When it comes to interpreting the TREB numbers, the debate is no different.

“You can make numbers say anything you want” is one of my favourite sayings, and it rings true when it comes to analyzing the Toronto real estate market.

So let’s look at the October TREB numbers that were released on Friday, and I’ll give you my two cents, before you give me your three…

Average Home Price Increases

Modestly, it’s important to note, but an increase, nonetheless.

In the spirit of making numbers say anything you want, why don’t we try that?

A pessimist says, “The average home price increased 0.6% from September to October.  That’s a rounding error.”

An optimist says, “In the face of all the negativity, all the media articles, and even a true, bona-fide threat to the market like the OSFI changes, the market still increased.”

Have your pick.

The average home price, coming off a 6% increase from $731,532 in August to $774,623 in September, increased a modest 0.6% to $780,104 in October.

(N.B.: If these numbers look slightly off to you, it’s because the numbers provided in the Market Watch are always re-adjusted for the next month. ie. September’s average home price announced in the start of October was $775,546, but was adjusted to $774,623 for November.  Same goes for sales, and just about every statistic.)

So what does that 0.6% increase in the average home price mean?

Very little, and a lot, at the same time.

As the pessimist/optimist argument above goes: the increase itself is insignificant.  It truly is a rounding error, and I don’t think any home-owner feels richer for adding 0.6% in value.  But as the optimist might suggest, in the face of constant negativity, and important regulatory changes, the average home price did not decrease.

Those changes of which I speak, of course, aren’t going to be implemented until next year.

But I’ve always believed that more important than buyer ability is actually buyer psychology.  If buyers are too afraid to buy, it doesn’t matter what they can afford, or qualify for.

In my “September Predictions” post, I surmised that the average home price would increase in September over August, and that it would further increase in October over September.  Check, and check, although the latter check is a cheap one.  Did I mention the 0.6%?  Yes?  Okay…

As for my prediction that the average home price would increase 10% from the summer, that would mean we’d have to get to $820,000+ through the end of November.

And frankly, I just don’t see that happening now.

If I can point out when I’m right, then I can certainly admit (or predict) when I’m wrong.

I’m seeing a decline in the number of freehold listings, especially compared to condominiums.

I think it’s fair to say, that not a lot of home-owners target the month of December to list their property for sale, but as the condo market is less cyclical, and is actually hotter than the freehold market right now, fewer condo-owners will lament selling in the dead of winter.

I think by the time November and December are through, we’ll see the proportion of houses-to-condos sold in Toronto change massively.  Since condos sell for less, on the whole, than houses, this will no doubt affect the average home price.

I have a host of would-be house-buyers that started their searches after Labour Day, who have yet to buy.

It’s not for lack of effort, or lack of affordability.  It is, without question, lack of options.

Now what about those options?

Listings Were Down In October

Keep in mind, I’m looking month-over-month right now.

Year-over-year, it’s another story.

I was asked in an email last month why I’m using month-over-month instead of year-over-year, and it felt like the person asking had an agenda.  It’s far easier to use year-over-year numbers to make a negative argument about the market, although to be fair, it’s far easier to use month-over-month numbers to make a positive one…

Active listings were down 30% in October, from September; 19,021 down to 13,331.

New listings were down only 9.5%, from 16,469 to 14,903.

I suppose this is to be expected.

In 2016, new listings were down 11.5% from September to October, which is in line with that 9.5% number.

But active listings were only down 6.1%.

The massive 30% decline in active listings this year is a bit of a surprise.

We do expect October to be slower than September every year.  There is so much pent-up demand among buyers who either didn’t buy in the spring, and waited through the summer, as well as those buyers that made the decision in the summer to start their search after Labour Day.  As a result, most home owners will wait until after Labour Day to list their properties for sale, many of them using the summer months to de-clutter, stage, and prepare.

But the drop in listings in October was much higher than expected.

Sales-to-New-Listing Ratio

Sales were 7,118 in October; up 11.6% from the 6,379 in September.

But it’s the sales-to-new-listings ratio that strikes me.

The ratio went from 38.7% in September (6,379 sales compared to 16,469 listings) to 47.8% in October (7,118 sales and 14,903 new listings).

This shows the market is getting a bit “tighter” with increased sales, decreased listings, and as a result, the average home price increased.

What Of Year-Over-Year?

Here is where the headlines are made!

Sales in October – down 26.7% from October of 2016.

New Listings in October – up 11.8% from October of 2016.

Active Listings in October – up 78.5% from October of 2016.

Average Home Price in October – up a paltry 2.3% from October of 2016.  That’s from $762,691 to the aforementioned $780,104.

Our theme continues here, folks.  You can make numbers say anything you want.

Sales “plummeted” in October.

Listings “skyrocketed” in October.

Average Home Price “fizzled” in October.

It’s all a matter of perspective, and the year-over-year numbers can cast the market in a completely different light.

So why use the month-over-month, instead of the year-over-year, or vice versa?

Aside from “making numbers say what you want,” I think it’s a matter of time horizon.

Most people want to know what’s going on right this second.

Or at the very least, they want to know what’s happening in this season of the market.

From August, to September, to October – that’s what’s happening now.

And while using month-over-month numbers to analyze the market risks being too short-sighted, I’ve yet to meet anybody, anywhere, who has come even close to predicting what’s going to happen in a 3-5 year window.

Every single bearish prediction over the last twenty years has been dead-wrong.  Some of them (Garth Turner, Hilliard MacBeth, Nicole Foss) were laughably, catastrophically wrong.

And the last bearish prediction I made – when I slammed Lanterra Developments’ CEO, Barry Fenton, for his 2015 prediction that Toronto condos would appreciate 30-40% in 3-4 years, was in itself, incorrect.

Imagine that.

I finally get bearish on a bullish prediction, and I’m wrong.

And in case you’re wondering, the average condo sale price since that December, 2015 post is up 38.7% in the GTA, or 38.3% in the 416.

Go figure.

So Mr. Barry Fenton aside, I have yet to see anybody accurately predict this market in a 3-5 year window.

Go ahead, take your shot.

For now, I’ll continue to monitor the month-to-month, and season-to-season ebbs and flows, first and foremost.  That’s what my clients are asking about, and it’s primarily what real estate enthusiasts are discussing.

But year-over-year, the numbers show that our market shot up, and came back down.

The average home price is only up 2.3%, year-over-year, and that is the number that bearish newspaper headlines should be quoting.

I don’t care that sales are down 26.7%.  I’ve never cared about sales.

Even in a raging-bull market where sales are up 40%, year-over-year, I still only care about the price.

Do you care if 100,000,000 shares of Apple Inc. trade on Monday, as opposed to 80,000,000?

That was rhetorical, and please save me the explanation…

Now, perhaps too soon for this topic, but it should be on your radar:

“Foreign Buyers Appear To Be Inching Back Into Vancouver’s Housing Market.”

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

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  1. Ralph Cramdown

    at 7:50 am

    All through the summer, TREB (and others) focused on year-over-year prices, because they looked a helluva lot better than month over month. And David has done a good job of explaining how seasonal sales mix changes make month over month numbers look different. The media has been (somewhat) trained to look at YoY, and will continue reporting it.

    So, 416 detached… From October 2016 to April 2017, average price advanced 21.1%, the highest ever (since 1997). The previous year, that advance was 17.4%, second highest ever. Average advance in the last 21 years was 9.0%. To hit last April’s average — that is, merely to be FLAT year over year, prices would have to advance 22.6% from here. Probably not gonna happen.

    While I appreciate that the “average Toronto home” is now 1/2 of a condo, 30% of a detached and 20% other, people who own or want to are going to look at prices for the thing they have or want, not the composite. And for 416 detached, the numbers are going to print negative year over year from October through April at least. In January, TREB will valiantly trumpet that the average FOR THE YEAR in 2017 was x% higher than 2016, but hung-over market participants will just put a pillow over their heads and roll over.

    So that’s my prediction: Lower year over year prices in 416 detached through at least April. That, I think, might jam a bit of a stick in the spokes of market psychology.

  2. Joel

    at 9:34 am

    I think it is interesting to see the percentages on the yoy and then look at how that is fluctuating.
    January 21.9%+
    February. 27.8%+
    March 33.1%+
    April. 24.1%+
    May. 14.8%+
    June. 6.1%+
    July. 5.0%+
    August. 2.9%+
    September. 2.5%+
    October. 2.3%+

    I think looking at these numbers, and especially if you graphed them you would see the nexus coming of when the yoy is stagnant or negative. Looking at the TREB numbers September and October and November of 2016 all had small increases in prices and small decreases in the yoy average for 2017.
    This leads me to believe that we are going to see a small increase in the housing prices mom for November, but the yoy is going to decrease again. I wouldn’t be surprised to see under 2.0% yoy.

    1. JCM

      at 10:18 am

      There’s a good chance that prices go negative year-over-year for November. In Nov. 2016, the average was $777k vs. $780k in Oct. 2017, and prices seem to be trending down this November.

      1. Condodweller

        at 9:07 pm

        I agree. I treat MoM numbers as a short term momentum indicator and YoY more like a long term indicator.

  3. JCM

    at 10:12 am

    Active listings were not down 30% month over month! In fact they were barely down at all! There were 19,021 active listings in September vs. 18,859 in October. That’s unusual and does not bode well for the market.

    1. David Fleming

      at 1:23 pm

      @ JCM

      You’re absolutely right.

      My mistake.

      I should NOT have transcribed crucial stats at 12:45am after an entire day of babysitting my child. Wait……that’s incorrect. My wife says you can’t “babysit” your child. She said it’s called “being a dad.”

      But you get my point.

      I appreciate the quick correction!

      1. Professional Shanker

        at 6:26 pm

        bahahaha, that is gold and she does have a point 😉

  4. Kyle

    at 11:19 am

    @ David Fleming

    Check this out:

    Brad Lamb said, ” I predict that typical $600PSF condo will rise to $800PSF within the decade. A 500SF one bedroom suite in the central core in a new building will sell for $400,000 by 2020.”

    You said, “The second article makes some pretty wild claims, and while I’m not looking to make any enemies in the Toronto real estate industry, the list not limited to Brad Lamb, I have to question the idea of an $800 per square foot average condo price for new construction. That’s a LOT of money, isn’t it?”

    And i said, “Brad Lamb’s prediction of 33% increase by 2020 for new construction, means an average of 5% price growth per year. I think this is probably overly-optimistic. I could see this happening for SFH under very favourable conditions, but definitely not for new condos.”

    With prices of new construction currently at $991/sqft, it looks like all three of us were too bearish in our outlooks.

  5. Ralph Cramdown

    at 2:28 pm

    “Local employer of 50,000 announces pay cut of 25% across the board.” How would that affect home prices?

    The Real Estate Board, that is. And then there are the stagers, painters, other contractors and trades, mortgage brokers, surveyors,* appraisers,* lawyers, movers, videographers, drone pilots, fluffers &c &c.

    The real estate lobbyists spew a lot of crap, but one thing they say that I do believe is that every sale represents a lot ($50k?) of money spent in the economy. Sales shrink, and there’s that much less money earned by that part of the economy.

    Price might theoretically be net worth, but sales volume IS the economy. String together a few months of negative sales volume, and crappy GDP numbers a few months down the road are predictable. Unless you’re the BoC with a decades-old model.

    * – these poor saps will likely see things get better, as conditions last fall and this spring were so nuts that nobody bothered to hire them.

    1. Ralph Cramdown

      at 2:59 pm

      P.S. Elise said she’s sold almost as many properties this October as last, and anybody who sold 0 last year isn’t looking at a decline, so it must be everyone between who’s taking the big hit…

      David, this isn’t meant as a shot against you. But if the industry has x% lower volumes, that’s x% less economic activity. You seem like a good guy, so I’m hoping that your sales are steady (or growing!) and the agents losing are those with the bad, upside-down or nonexistent pics on MLS and the awful customer service.

      1. Chris

        at 8:08 pm

        Will be interesting to see what the BoC does, because you’re definitely right, real estate and associated industries make up a significant chunk of our GDP. Even without prices falling, decreased sales volume will have an impact on our national economy.

        But, the US Federal Reserve is slated to continue raising rates. So what do we do up here? Hold rates steady and let the Canadian Peso eat the dirt (and inflation spike)? Or follow the Fed and potentially exacerbate economic hardship?

        I don’t envy Poloz.

        1. Condodweller

          at 9:04 pm

          I think Polos will leave rates alone for a while. All the new rules should help keep the re market in check without having to raise rates which would poor cold water on our still recovering economy.

          1. Chris

            at 10:35 pm

            Hmm ya I suspect we see out 2017 without anymore rises, but given the Fed is almost certain to raise in December, I don’t know how far into 2018 we get before Poloz pushes rates up again. Tough to say, as the BoC is holding their cards pretty close to their chest right now, simply stating they’ll see what the data says as they go and make decisions based on that. So, I suppose we’re left to watch GDP, job numbers, inflation reports, etc.!

  6. Appraiser

    at 4:03 pm

    Some bears have apparently been overcome with anger and resentment. As David as correctly illustrated in the past, most are renters. Some tend to fall into the extremely indignant category; lashing out at the industry and all of its participants. Positively apoplectic. Careful with the blood pressure there guys.

    Understandable I suppose. Being wrong year after year can do that.

    1. Ralph Cramdown

      at 5:44 pm

      Phrase your thought in the form of a falsifiable prediction, please. It’s the new thing among commenters who wish to be taken seriously.

      1. Kramer

        at 6:47 pm

        It has its benefits… predictions usually require a rational explanation with a string of irrefutable thoughts… so it weeds out a lot of jerks, or at least makes them look silly (ie Median Income determines real estate and thus prediction is real estate is due for a snap back because they haven’t grown in line for 30+ years. Wait what?)

        1. Geoff

          at 9:42 pm

          Clearly a few jerks slip by.

          1. Kramer

            at 10:47 pm

            Your guile is mesmerizing. Way to go!

  7. Appraiser

    at 6:47 pm

    Meanwhile in Vancouver the October stats are in. The foreign buyer tax regime has now been absorbed quite nicely by the market:

    The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,022 in October 2017, a 35.3 per cent increase from the 2,233 sales recorded in October 2016, and an increase of 7.1 per cent compared to September 2017 when 2,821 homes sold.

    The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,042,300. This represents a 12.4 per cent increase over October 2016 and a 0.5 per cent increase compared to September 2017.

  8. steve

    at 7:04 pm

    Ralph makes an important point about what reduced sales would spell for GPD figures. And of course prices will be affected simply as a result of how much credit becomes available. OFSI has set the bar 2% higher. Despite all that, it’s unlikely prices will fall through the floor, except perhaps in outlying areas where they had reached fantasy levels to begin with.

  9. Chris

    at 7:55 pm

    David, good blog post; fair assessment of the stats/numbers, and of your own predictions. Kudos to you for your correct ones, and good on you for acknowledging those that fell short.

    Ralph hit on an important point. I think many of us underestimate the role that sentiment plays in real estate; it is one of the most emotional asset classes.

    While all of us commenting here are hyper focused on the stats, and can debate back and forth about what they mean, the average person hears what City TV, CBC, The Star, or whoever says, and takes that at face value.

    So, what impact will it have on sentiment, and thus the market, if the reports begin to talk about y/o/y price declines, as previous commenters have mentioned? That’s a real wildcard in all of this, barring a very large price increase from today through April.

    My prediction? Things get interesting come Spring. Toronto (416) does ok, with prices holding more or less steady, maybe a modest decline given credit tightening. The 905 though, continues to see drops; things are already getting ugly in Stouffville/Richmond Hill, and I don’t see a whole lot around the corner to help them.

    Who knows though, that’s just my guess. As I’ve said before, for those living in a home, or looking to buy a place to live, this should all be background noise; it’s your residence, not your speculative bet. For those with investment properties, it’s a different story

    1. Geoff

      at 8:52 am

      I think sentiment applies to a lot of investing. Many studies have shown that most active traders would do better to literally invest in an etf and then lose their passwords, than trying to sell when they think the stock market is too hot or being afraid to buy when it’s too cold. Even during the great financial crisis, many people unloaded stocks that they shouldn’t have.

      1. Chris

        at 9:53 am

        Oh for sure! There’s a litany of research that shows most active traders underperform the market. Sentiment definitely plays a role in many aspects of investing, as people let emotion get the best of them, rather than making purely logical decisions.

        1. Kramer

          at 7:40 pm

          Good work comparing an illiquid asset class with high transaction costs to an extremely liquid asset class with low transaction costs to try desperately to make a point.

          People don’t dump their homes on a whim. And generally speaking, people also don’t dump their investment properties on a whim. If you had ever owned one you would know why. It takes time, you have tenants, there are massive transaction costs, taxes, and generally speaking, if you sell – you’re out… unless you market time and meet some threshold so that by buying again you don’t lose all your “gains” in all the transaction costs and taxes. Selling an property is a BIG DEAL.

          Yes, some will cash in… some always cash in.. so maybe more would in a correction scenario (and sorry but condos have been solid through all this government induced ‘sentiment shift’) , but your post above is completely impractical and it sounds like you’re fantasizing about crashes… which is…………….. stupid.

          1. Kramer

            at 7:44 pm

            And worse than stupid…. it’s BIASED.

          2. Chris

            at 7:51 pm

            Kramer, it’s been very disappointing watching over the past few weeks as your posts went from thoughtful and logical to nothing more than the ramblings of an angry troll. All you’re doing is lashing out at people you don’t agree with, and heaping one-word praise on those you do agree with.

            Perhaps you should take some time away from the computer, and contemplate why you are so angry? Come back when you are ready to discuss like a civilized member of society.

          3. Kramer

            at 8:26 pm

            I know precisely why I’m so angry… and it is that every time you pull out an economist or professor’s name and throw around his/her credentials/prizes when you are backed into a corner by good points and rational arguments, it makes me want SCREAM.

            And if it appears that I am on the hunt for bad posts, it’s because they are overpopulating at the moment and need controlling, lest some poor individual comes here to actually learn something and sees nothing but bear shi+ and believes it.

          4. Chris

            at 8:33 pm

            “it makes me want SCREAM”

            Why? Why are you so personally offended and upset by what a stranger posts on the internet? Why do you let this directly impact your mood?

            People are entitled to disagree with you. Just like people are entitled to disagree with me. I don’t take it personally. Who knows, they may turn out to be right, and I’ll turn out to be wrong.

            But letting yourself get so worked up over these anonymous blog posts can’t be doing any favours for your mental health and well being.

          5. Condodweller

            at 8:42 pm

            @Chris It’s almost as if Kramer has a multiple personality disorder. Some comments are decent but others are like they are written by a completely different person. There are definitely two different writing styles.

          6. Kramer

            at 8:48 pm

            Chris beat the elegance out of me last week. There’s no point.

        2. Condodweller

          at 8:46 pm

          I have seen fund flow graphs where fund flows area inversely correlated to market performance. Emotions drive most people namely fear and greed which makes them do the exact opposite as they should be doing.

          1. Geoff

            at 9:41 pm

            Kramer – honestly, an opinion different from yours is not a personal assault. Let it go. Also, life’s too short to be angry . Lastly, who appointed you as lord protector of the internet, saving everyone from comments you don’t approve of? Peace!

          2. Chris

            at 9:55 pm

            Geoff hit the nail on the head. Life’s too short to be angry. I will admit I posted some rude things before, mostly to Kyle, but I took a step back and realized they accomplish nothing except getting myself worked up.

            We all sometimes have to take a breath and remember, we’re just talking about an asset class. We’re all fortunate to live in a great county, with a fantastic quality of life. Let’s keep things in perspective, shall we?

            Kramer, I’m being sincere; we can disagree, but do a bit of self reflection and ask yourself what does it accomplish when you let yourself get so angry? It’s no good for the discussion here, and it’s no good for you either.

          3. Kramer

            at 10:23 pm

            Who appointed me as lord protector of the internet? The same person who appointed you two as chief psychologists of the internet I guess.

            I value diverse opinions, but in a debate or argument, people who refuse to move things forward because of their ego or biases or inability to ever be wrong offends me… it’s the root of inefficiency in any setting. It stifles progress. I love being proven wrong. It’s a building block.

            That’s my belief, and if it offends you, I won’t try to stop you from being offended.

          4. Chris

            at 10:31 pm

            I can’t speak for Geoff, but I’m not offended by your anger. You can be as furious as you like. It’s no skin off my back.

            I just don’t think it does much for the discussion here, and I doubt it is doing much good for your personal well being when you let yourself get so emotional.

            But oh well, I tried. If you want to fly off the handlebars and lash out at strangers on the internet, that’s your prerogative.

          5. Kyle

            at 10:40 pm

            Some people can’t be reached, not by logic, not by evidence and not by fact. It’s not you it’s them.

            I think you too need to do some self reflection. I say this honestly and not to try to piss you off. Maybe you’re just being argumentative and don’t actually believe all that you write, but at least from your comments it is clear you have never met a bearish opinion that you didn’t like and you’ve never met a bullish opinion that you didn’t disagree with. Doesn’t matter if by every objective measure someone has torn the bearish argument to shreds or irrefutably supported the bullish argument, you will somehow find some sort of rebuttal, and it is often a cheap rebuttal like turning the argument into something subjective, like the meaning of a word, or the precision of the data or conjuring up a remote alternative scenario. This is what drives people crazy. It’s the equivalent of sticking your fingers in your ears and saying “i can’t hear you, i can’t hear you, i can’t hear you” when you’re wrong. If you actually want to be truth seeking and truth promoting then you need to remain objective and argue the substance of points.

          6. Kramer

            at 10:44 pm

            Thank you for your support. You are truly an unstoppable master of all subjects and doctrines.

          7. Kramer

            at 10:48 pm

            That last comment was for Chris, not you Kyle.

          8. Chris

            at 10:50 pm

            Kyle, as I said last time you raised that point, the only ones who seem to be getting mad are Kramer, and occasionally you.

            Yes, I have a bearish outlook on GTA real estate; you have a bullish one. And we could both be accused of being stubborn in our views. And yet, both of us debate and have admitted when the other makes a fair point. Further, neither of us is lashing out at the other, and for the most part, the discussion remains civil.

            Sorry if you find my rebuttals cheap, but, such as earlier today, when you erred multiple times in your assessment of Pasalis’ research, I feel it’s worth pointing out. If you find that “cheap”, “pedantic” or the like, well my apologies,
            but that’s on you.

            Here’s a thought for us all; if the way someone argues annoys you, rather than getting upset, why not just ignore them?

          9. Kramer

            at 12:37 am

            If your purpose here is merely to argue your bearish outlook tooth and nail, and not build toward a clear understanding of the market, then you’ll find a lot of people ignoring you soon enough. And that applies to most scenarios out in the world as well. Is that what you enjoy? – just seeing how far you can argue something and if the BS tank finally runs dry you just never bring it up again (i.e. Median Income) and move on to the next thing (i.e. cash flow on investment properties, or market sentiment)? I have to ask. Say no and I’ll believe you.

            You do not approach it like you’re trying to gain a better understanding of the market. You approach it like you’re trying to get to the inevitable trigger that will absolutely crash the market, like this is The Big Short. That would be fine, just wear it proudly. But so far, you have identified nothing that will ultimately crash the market aside from extreme cases that anyone would agree with (i.e. financial crisis part 2 or interest rates skyrocketing, etc). And if the market crashes, it would be due to events that take place that you have not assigned any probability to but rather just say that “it’s possible”, which, I’m sorry for being harsh, is useless. If you’re going to play the “possible” game, then you could go bullish all the way to the moon as well. It’s possible that they will cancel the double land transfer tax, or it’s possible that Amazon is going to have HQ2 in Toronto, or it’s possible that Trump drives 100,000 skilled and/or wealthy Americans to Toronto. Anything is possible.

            Have I assigned exact numerical probabilities to every driver I believe in? No. But I understand that this is the only way to forecast/predict/take a rational stance on something where you would make an investment decision, and I do have my opinions on a variety of these drivers which builds my stance, even if they are not derived in deep analysis but merely conceived from reading hundreds of articles and opinions. For example, I believe the probability of interest rates increasing significantly to all the way to normal levels in the next 5 years is low because it would likely trigger a recession which would just require more monetary policy tinkering. So that’s one box checked off PROBABILITY LOW. Is it possible? Yes. But I don’t go bearish or bullish because something is merely “possible”. I try to play the probable game, and I adapt the outlook with new information. And if I’m wrong I’m wrong, but I would know where I was wrong, i.e. not assigning enough probability that the government would regulate this much. Wild bears (not necessarily you) don’t admit they were wrong the last 5 years or say where they were wrong, they just maintain the endless “possibles”, and then when the unforeseen comes up (like heavier gov’t regulations), they claim it as part of being correct in calling a correction. That approach is nonsense, bull or bear side.

            Maybe that’s the communication breakdown between you and Kyle and me… you speak in possibles, we try our hardest to speak in probables. Maybe not. I don’t really care. This is all just to keep me off Netflix for a few hours per night.


          10. Kyle

            at 9:17 am

            @ Chris

            I didn’t bother disputing it earlier, because that would have just lead to another 20 comment tangent that largely has nothing to do with the topic, but if my memory serves me, beyond Kramer and myself that list also includes Daniel, Boris and in the past Appraiser, and quite probably Long Time Realtor. But regardless, how many people it might be the feedback is genuine, do with it what you will.

          11. Chris

            at 9:18 am

            Kramer, I hope you don’t mind if, for the sake of brevity, I answer your post in a slightly truncated fashion.

            “If your purpose here is merely to argue your bearish outlook tooth and nail, and not build toward a clear understanding of the market, then you’ll find a lot of people ignoring you soon enough.”

            If people choose to ignore me, well, c’est la vie. My purpose here is simply to debate and discuss; I have my opinion (GTA is overvalued), and have yet to be presented with sufficient evidence to change it. And quite honestly, I don’t know what you or Kyle could present me with to change my stance, barring some very significant shift in the market, economy, fundamentals, etc. Maybe I’m just stubborn?

            “if the BS tank finally runs dry you just never bring it up again (i.e. Median Income) and move on to the next thing (i.e. cash flow on investment properties, or market sentiment)?”

            Sorry you think my points are BS, but again, that’s your opinion. I’ve brought up median income, speculative activity, and sentiment many times (although the last time, it was David who brought up median income). On the topic of median income, I thought I was quite clear in stating I agree with Demographia that the City of Toronto (416) can likely support a higher median multiple; the same does not hold of Burlington and Whitby (905).

            “But so far, you have identified nothing that will ultimately crash the market aside from extreme cases”

            I don’t think I’ve ever postulated that the market will crash in a fiery 2008-esque manner; I simply see it as overvalued and perceive greater downside risk. Personally, I don’t think there will be some dramatic crash; rather, a slow decline seems likelier from my perspective, again with the 905 areas hit hardest.

            “For example, I believe the probability of interest rates increasing significantly to all the way to normal levels in the next 5 years is low”

            What do you consider normal levels? At what point do you perceive interest rates becoming problematic to heavily indebted households? Personally, I don’t think interest rates will need to climb back to 4-5% for debt to become an issue. We’re at 1% today; even a climb to 2%, I think, would be problematic for many.

            “you speak in possibles, we try our hardest to speak in probables.”

            Perhaps; like I said, I don’t purport to know what is around the corner for the market. I think the GTA is overvalued (more so the 905 than the 416), but it could certainly stay overvalued for awhile. Or I could be wrong, and it’s fairly valued. Hence why I’ve stated, on multiple occasions, my opinion shouldn’t be taken as advice for someone looking to buy a home as a place to live; it should only be taken as one person’s opinion on an investment/asset class.

            Hm…that wasn’t as brief or truncated as I thought it would be.

          12. Chris

            at 9:22 am

            Haha Boris was just mad at everyone, and it was rarely about real estate…tended to be more focused on “cucks” and “liberal snowflakes”.

            Either way, sorry my arguments drive you crazy. You are certainly entitled to disengage anytime you like if you find yourself overly frustrated.

    2. Daniel

      at 10:20 am

      I moved from Montreal to Toronto almost 5 years ago. We bought a 4bd 4ba semi a short walk from the subway, great school district, two car parking, little backyard, etc etc for $1.2m, which was exactly what we would have paid for the same quality home in Montreal. At the same time, a nice 4 bed house on a quarter acre in an established suburb of montreal (west island, good parts of the south shore, good parts of laval) could be had for under $500k, while that same house in TO was getting close to, if not over, a million.

      All of which to say, the differentials in values in the GTA didn’t make sense to me even back in 2013 and have continued to baffle me since. IMHO, the best parts of Toronto are now fair value and the crap parts are horrible value.

  10. Uneza Sheikh

    at 1:49 am

    Star Marketing Pvt Ltd is offering Best Property for Investment in Pakistan great locations great facilities at affordable prices, as Star Marketing Pvt Ltd is the Premiere Real Estate Marketing Company in Pakistan.

    1. Kramer

      at 7:00 am



      1. Alexander

        at 1:29 pm


  11. Appraiser

    at 8:34 am

    TREB’s director of market analysis Jason Mercer.

    “It appears that the psychological impact of the Fair Housing Plan, including the tax on foreign buyers, is starting to unwind.”

  12. Ralph Cramdown

    at 2:17 pm

    Why year over year price declines matter:

    Every month, some people who don’t qualify for prime loans, or for as much as they want to borrow, decide to buy housing anyway. They often get one year subprime mortgages, with the assumption that after 12 months of on-time payments and maybe a bit of home value increase, they’ll be able to refinance into a prime loan. Others, who don’t even qualify for that, borrow from private lenders, usually for one year, interest only.

    If their homes are worth less one year later, refinancing into a better loan with a lower rate is going to be far less likely. Even renewing with their current lender might not be an option, as credit conditions in this space have tightened considerably in the last 12 months.

    Just as strong price growth can turn even bad loans good, year over year price drops can turn even good loans bad. How many households are we talking about here? Good estimates are hard to come by.

  13. Appraiser

    at 5:23 pm

    There seems to be no limit to the number of empty theories, level of conjecture or amount of negativity that the bears can imagine.

    1. Kramer

      at 7:19 pm

      I was thinking the same thing…

      Out of nowhere, “Sentiment” is now Pennywise the Clown ready to destroy the poor fragile little Toronto Housing Market.

      Honestly the more they talk the more their biases becomes clear… Toronto might as well be Lagos, Nigeria to them.

      1. JCM

        at 12:27 am

        Empty theory? We’re literally watching 1989 unfold all over again. The similarities are uncanny.

        Prices are going negative year over year, sales are down 30% year over year, mortgage qualification rates are more than double what they were a year ago, inventory is up 70% year over year, prices are down more than 15% from the peak. If anything, all of this is significantly worse than 1989.

        And what’s your point? Prices rose due to the fall market, but less than they did last year? Hmmm.

        1. BJA

          at 6:16 pm

          “Significantly worse than 1989”?

          Home prices in the GTA rose 27.34% in 1986, 36.12% in 1987, 21.43% in 1988 and 1989, for an aggregate increase of 151% over four years. By comparison, prices have risen about 49% in the past four years. Unsustainable, sure, but not 1989 redux. If you want to spout hyperbole, go to the Greater Fool blog.

  14. Condodweller

    at 6:52 pm

    I come for the in the trenches stories but I do get sucked into these prediction threads. The past 20 years have proven that you don’t want to fight the trend. I have read Brad Lamb’s articles over the years each time predicting prices will go up and while I prefer predictions from people who are in the industry rather than outside observers I was always skeptical. However, I have learned over the years to suspend my disbelief like in the movies. When the Barry Fenton prediction was posted I believe I commented that the way the market was going it would not surprise me if it became true. What does surprise me is how fast it became true and that prices are near the high end of his range. I thought it might reach 30% but never would have predicted to see 40%. And there is still a few more years to go.

    I agree that psychology plays a big part and it will be interesting to see what happens if the trend changes, even if it’s just to the neutral instead of a full downturn. While I don’t think anyone can know what will happen in 3-5 years I do suspect that we may have seen the high watermark last spring with all the new rules and interest rates creeping up.

    1. Kramer

      at 7:28 pm

      I agree that you need to ask: if sentiment has shifted, what has it shifted to? To negative or neutral or luke warm or patience or opportunistic or what?

      It certainly hasn’t shifted equally everywhere in the GTA… and it certainly isn’t a science… plain and simple, one person can see blood while the next sees opportunity.

      …. and if LONG-TERM SENTIMENT has shifted significantly, then I’m a jet flying iguana.

      1. Kramer

        at 7:43 pm

        And the fact that this sentiment shift is government induced , purposeful acts to cool the market, and through it condos continue to thrive…. that is significant…

        If I’m a buyer, I get a great deal of comfort knowing that this slow down is ON PURPOSE… it speaks a lot to the market I’m co sideing buying into, and maybe I just won a small lottery by being able to actually shop somewhat properly for a house and have some options and time to make a great decision.

        Sentiment my ass.

      2. Condodweller

        at 8:50 pm

        @Kramer if the market had shifted, it has shifted. Regardless if you are a flying iguana, a giant giraffe or a purple pig.

        1. Kramer

          at 8:54 pm

          Long-term sentiment has shifted? So in the long-term people in the GTA are going to stay away from buying homes… even those financially positioned to… in order to rent instead… which is also extremely expensive. No.

          1. Condodweller

            at 9:10 pm

            I don’t know, you tell me. What does your data and charts tell you?

          2. JCM

            at 12:17 am

            I can afford to buy a nice place in th 416, but prices seem way too high, especially in light of the new stress test, higher interest rates and shifting market sentiment. I fully anticipate that prices will come down materially in the next 6 to 12 months, so I’m happy to continue renting in the meantime.

            Had my “long-term sentiment” shifted? What does that even mean? I’m looking for a place to live in at some point and I’m not buying until I’m confident that I won’t lose all of my equity within 6 months…

          3. Kramer

            at 12:59 am

            JCM, as creator of this “long term sentiment” nonsense, I would say that if there was positive long term sentiment it would mean that the market believes that over the long run home ownership is a good investment vs renting over the long run. Like, even if you bought the day before a 10% correction, over 25 years would you still be better off than renting from the day before that correction? It would be a tough pill to swallow and some swallowed it 5 months ago, but over the long run your confidence is high.

            I think it’s important to establish both because short term sentiment is wild and crazy and unpredictable and not “sticky” compared to the more financial based drivers. Sentiment could change again tomorrow or in 6 months depending on a variety of things, and playing short term sentiment is nothing more than market timing. Respectfully, you said it yourself, you’re financially positioned, but you fully anticipate prices to come down materially in the next 6-12 months. That’s market timing. I’m not cursing it, it’s natural given the scenario we’re in today. I’m just saying that if your long term sentiment on the market was also bleak, then maybe you would never buy. If Toronto was Cleveland and the population was forecasted to decrease for the next 10 years, would you be planning to buy in 6-12 months? I wouldn’t. I would be a renter for 10 years. I venture to say that you’re considering buying in 6-12 months because your long term sentiment is positive.

            Anyways, I see a difference. And if long term sentiment is positive, it’s a result of the popular outlook for many key drivers in the long run.

            I hope you market time well. I don’t really care, from that perspective I’m stuck in the market now, so whatever it will be in 25 years it will be… might as well get some more younger people in at lower prices, the retired homeowners in this city are wealthy enough, am I right???

          4. JCM

            at 7:22 am

            Actually, I’m not optimistic about prices rising in Toronto on a long term basis from their current prices. It took until 2011 for prices to recover their 1989 highs in real terms, and that could easily happen again. Long term price growth of 5% is realistic, but not when you’re coming out of a speculative bubble.

            I’m looking to buy a place to live in, not as an “investment”, and if I take a haircut over the long term, that’s okay as long as it’s not massive.

          5. Kramer

            at 9:12 am

            Your outlook is your outlook. I disagree with it but I’ll assume you don’t care.

            I like the attitude that your house is your place to live and not an “investment”, however, whether you like it or not, you are invested in your house when you buy it. And since you’re talking purely about price and timing the market, forgive me if I organized my points around price. Apologies.

      3. Ralph Cramdown

        at 11:59 pm

        Fear. That’s the short term sentiment. A few days ago Kyle was asking where all the bears who predicted a drop from August to September were. I couldn’t remember too many people predicting that (maybe there were). But then I discovered the reference, I think. In one of David’s fall predictions posts, he said it was bulls vs. bears, “and the stakes have never been higher,” while predicting the usual rise in September due to sales mix changes. So now prices have zigged and zagged, and either the summer was a bear trap, or fall is a bull trap.

        But it seems like there’s a special urgency to refute, deny or belittle any and all bear arguments, painting them all as “angry,”, while arguing that Toronto 50 years hence will be some sort of Xanadu, a wealthy global city and a paradise for the landed gentry.

        Well, maybe. But I have my doubts. Assuming that the rich are not all commuting to suburban estates in 200km/h electric self-flying helicopters, the city’s transit system is still going to suck wind. Chengdu, which only has the tenth largest subway system in China, has almost double Toronto’s trackage at 130km, and “expects to put into operation 600 kilometers subway by 2022.” Even if China is in a giant debt bubble, that infrastructure won’t disappear if it busts, just as in the US railroad boom of the late 1800s or the fiber optic boom circa 2000. Toronto will continue to fight and plan and cancel and replan and reroute and not build transit, I guess. Which will just make those downtown condos that much more valuable, eh? Will the US still be sole superpower, or one at all, or even still united? How many Asian and African countries will have built solid education systems and modernised? India? Yeah, I wouldn’t make too many predictions fifty years out. The spring market is about as far as I can see, and even that is hazy.

        1. Chris

          at 9:30 am

          Ralph, I agree with much of what you’ve said, both in this post and your others.

          Certainly, predictions 50 years out are near impossible; I doubt many in the 1960s would have accurately predicted where we would be today.

  15. Sardonic Lizard

    at 2:22 pm

    TREB will always push the narrative of the market always doing well, whether it’s an explosive increase Year-over-Year, or a modest one Month-over-Month.

  16. Lui

    at 8:20 pm

    TREB again lost their fight to hide selling prices from buyers.David can you explain why TREB are so against letting buyers see selling prices of homes in the GTA?.

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