Predictions For The Fall Market!

Opinion | September 5, 2017

How ironic that a “predictions” blog post from me, is, in itself, very predictable.

Yes, I do this feature almost every fall, but it’s borne of necessity, since the army of Toronto buyers and Toronto sellers are about to square off like the Lannisters and the Targaryens.  I’m just not sure how the analogy takes the white-walkers into consideration….

Anyways, let me put my thinking cap on here and provide a few predictions for the three months that lay ahead, but also highlight what you need to be aware of as we move into what is essentially the spring market, on steroids….


1) Prices will go up.

What a salesman, eh?

I mean, this guy is a real estate agent, he writes a blog, and he has the gall to tell the reading public “prices will go up.”

Well, if the shoe fits, wear it.

I’m not saying prices will go up because I want them to.  As I have said before, many times, I have no vested interest in prices going up.  In fact, with my wife and I looking to buy a house that is at least double the value of our condo, it would make sense for us to cheer for prices to go down, since, assuming all things considered equal, the amount our condo goes down in value will be half of the amount the house decreases in value.

So take what I say, with a grain of salt, if you so choose.

But I’m saying prices will go up because, simply, they will.

As I write this, I don’t have the August TREB data, but I can almost guarantee that prices will increase this fall.

I suspect that the Average Sale Price for the month of August will be somewhere in the $740,000 – $760,000 range, meaning that it could represent a fourth consecutive month-over-month decline, or could be moderately higher than the July figure.  But either way, the number won’t be significant.

What is significant, is where prices were to start the year, where they went in the spring, and where they are now.

You’ve seen this chart from me on many occasions, but why not take yet another look?

This is the average sale price in Toronto going back to last summer, and on the right I’ve marked the increase in average sale price from last December to this April (26%), and the decline from April to July (19%).


Now again, take this with a grain of sale because it sounds like BS, but I don’t believe that the decline in average home price, from a percentage basis, can be directly applied to the market out there.

The numbers say that the average sale price is down 19% since April.

Can you show me a $1,000,000 house in April that’s $810,000 now?

Or a $500,000 condo that’s $405,000 today?

I haven’t seen it.

I’ve given a lot of newspaper interviews on this topic, and the person on the other end of the line is always saying, “Yeah, that’s the sentiment out there; I’ve yet to speak to an agent who agrees with the numbers.”

Delving into those numbers, and looking at why they’re so low (ie. more luxury homes being sold in early 2017?) is a topic for another day.

There’s no doubt the market has dropped since March/April, but not nearly to that extent.

So allow me now to make a couple of predictions within this prediction, or rather further explain why my #1 point is “Prices will go up.”

i) The September Average Sale Price will be higher than July or August.

This is a no-brainer, folks.

First and foremost, we’ll be coming off four straight months of declining prices.  Doomsdayers be warned – there’s nowhere to go but up.

Secondly, and more importantly, there is so much pent-up demand out there, and while we expect the market to explode with new listings after Labour Day, there isn’t, and likely never will be, more supply than demand.  We’re going to see prices pick up right off the bat, and that Average Sale Price will push back over $800,000 in September.

ii) The October Average Sale Price will be higher than September.

September will fuel October.

The market conditions, the sales, the prices, and the buyer and seller sentiment in September will set the table for the rest of the fall.

We might see a slow first or second week of September, as buyers wait and see how things are looking, and sellers hold back listings to get new “comparable sales” posted on MLS that help with their pricing, but once we’re underway, it’s going to be busy.

iii) Prices will go up 10% from the summer.

That $746,218 “Average Sale Price” from July of 2017 is just shockingly-low.

So is it really a stretch to suggest that we’ll add 10% to that?

The $920,000 peak in April might not be attainable this fall, but a 10% increase from $746,218 would only result in an average sale price of $820,840, which brings us back to a level found somewhere between January and February.

A 15% increase, which sounds absurd for a 3-month time period, would bring the average sale price up to $858,151, which is still significantly lower than the March/April peak.

I think a lot of people know this, and this is going to further fuel demand.

I have more investor-clients right now than I had in the super-busy spring market, all of whom are looking to pick up 1-bed, 1-bath condos for less than they’d have paid in the spring.

2) Conditions will be reminiscent of the spring – and some buyers will be caught off guard.

Nothing will ever rival January to April of 2017.

I spoke to a reporter from Report on Business over the weekend who is putting together a significant expose on the spring market, and I think it’ll be a fascinating read.

How did things blow up so quickly?

Low supply, high demand, new tactics (both buyers and sellers are to blame for that one!), and ultimately mania.  Call it panic if you want, but I think “mania” is a better word.

This fall, I expect low supply and high demand, but not as low supply as the spring, and not as high demand either.  Interest rates have risen, government initiatives have been taken, and the buyer pool seems a bit more cautious.  There are a host of reasons why the market is not like it was in the spring.

However, there are a host of reasons why the market will continue to be busy, and continue to remind people of what the spring was like.

Not the same, but similar, and that’s an important distinction.

If you’re a buyer, and you think you’re going to walk into an $899,900 semi-detached house, and be the only buyer “because the market has cooled,” you’re in for a rude awakening.

Yes, the market has cooled.  And yes, the media are obsessed with covering the topic.

But that doesn’t mean that it won’t be business as usual in the busy fall market.

There will still be offer dates, multiple offers, over-asking sale prices, and bully offers.

The current levels of supply and demand necessitate it.

We might only see, say, three offers on that $899,900 semi, whereas we might have seen nine in March, but buyers can’t hope, dream, and will their way to a market that simply doesn’t, and won’t exist.

I wish we were in a balanced market.

I wish “every person living in the city of Toronto could afford to own a home,” as the sentiment often goes.

But despite a drop in the average home price over the past several months, and softer market conditions, we are not in a buyers’ market.  We are entering a very busy, very shortened part of the real estate calendar, and there will still be competition for virtually every freehold home in the core.

Buyers who come into the fall market will incorrect information, and perhaps illusions of grandeur, will get left behind.

3) Rental battles will be fierce.

I’ve blogged about this over the summer here and there, so it bears mentioning once again.

When I was on vacation down in Idaho, I brought out a lease for a 1-bed-plus-den, 1-bath unit, listed at $2,150/month.  All the lease agents in my office were teasing, “Get ready – you have no idea what’s coming!”  They told me, “Some vacation you’re about to have!”

They were right.  I got six offers in 36 hours.

But that was nothing compared to the stories I heard from the agents I spoke to.

One agent told me, “I just won a sixteen-offer bidding war for a rental in Liberty Village last night.”  He was so happy, and so proud, and it was eerily reminiscent of the spring market for sales.

Another agent told me, “I’ve lost nine offers to lease………this week.”

I didn’t even know how that was possible, until he explained, in great detail, which nine properties he had lost out on for three different rental clients.

Some of you will suggest that the September 1st rental start date was the reason for the summer mayhem, and while that is a big date, I don’t think we’ll see a significant drop-off in activity in the fall.

In fact, the real reason for the fierce rental market, which is something I’d like to explore in Thursday’s blog post, is the unintended consequences from the Liberal government’s “Fair Housing Plan,” announced last April.  There are fewer properties on the rental market, renters are staying longer, and there are fewer purpose-built rental developments underway.  I’ll come back to this on Thursday.

I think the idea of paying $2,150 per month for a 700 square foot, 1-bedroom condo is crazy, and unfortunately, I can see how it’s impossible for somebody making $40,000 per year to find a way to live in this city.  But circumstance and misfortune don’t change reality, and never will.

The demand for rental properties is high.  The supply of rental properties is low.

Competition is fierce, and will remain as such.

4) It will go by very fast.

I’ve heard this a lot lately, although it’s been about something else.

“It goes by fast,” people tell me.

“Blink, and it’s gone,” I’m told.

This is primarily in reference to raising children, as people who have gone through it love telling others how quickly the time passes, and ultimately how my daughter will be going away to university before I know it, but it could also be said of the fall market.

The “spring” market, which starts in the winter, and ends in the summer, runs from January 1st to June 30th.

It’s a six-month market, broken up in the middle by Spring Break and the Easter/Passover holidays, but it encompasses half of the year.

A lot of buyers who start their search in the “new year” end up dragging their feet, and after losing an offer or two, they end up buying a home in May, and moving in the summer.

In the fall, that timeline just doesn’t work.

The fall market is only three months.  It starts a week into September, and by the time you’re a week into December, the market basically shuts down for the year.

This is part of the reason why I think a bit of mania will set in eventually.  Not to the same extent as the spring, but if you’re a buyer still looking by the third week of November, and you know that the market dies out in the first week of December, you’re going to push a little harder, bid a little higher, and be more aggressive.

5) The government will continue to meddle in the market.

You know when you get dry lips, and you keep licking them?

Licking them makes it worse.

But once you start, you just can’t stop.

It’s not necessarily an “addiction” per se, but rather an uncontrollable desire, both physical and mental, despite the knowledge that what you’re doing is having a negative effect.

I see a similarity when it comes to the government intervening in the real estate market.

The only difference is: they don’t seem to know what they’re doing is having a negative effect, or unintended consequences.

The “Ontario Fair Housing Plan” was a farce.  It was 14 points of utter nonsense, and not a whole lot of people took it seriously.

The changes to the rental market are just insane.  Forcing landlords to give a month’s rent to a tenant when the landlord wants to evict them for their own use is so over the top, it makes my stomach churn, and this is after the government brought in rent controls.

The Liberal government are continuing to lick their dry lips, and they just can’t stop.

They seem very set on the idea of regulating real estate agent representation, something I don’t agree with in the slightest.

Few governments are proactive; most are reactive.  And just as the B.C. government leaped into action last year with a slew of new policies after revelations about shadow-flipping, and foreign ownership, the Ontario government must have watched that CBC “hidden camera” special on Realtors double-ending more than a few times, and now they’ve decided they need to act.

I’ve written entire blogs on this subject, so I won’t get into it now.  I think the consumer deserves to choose their own representation, and they don’t need the government to meddle.

But the government has the taste for meddling, and I don’t think they’re anywhere close to being done.

What other policies could they put into place?

Your guess is as good as mine.

But nothing is off the table here.

The government doesn’t seem to think that building infrastructure to help move people to places, and allow greater urban sprawl, is the answer to the real estate crisis.  Instead, they’re looking to win acknowledgement from the public with short-term, ineffective, band-aid solutions that they can announce in front of a podium.

So mark my words – we’re going to hear a lot more about government housing policies this fall, and as I said, nothing is off the table.

There we have it, folks!

My ‘brief’ thoughts on the market that lays ahead, starting today: the first day ‘back.’

Just like the first day of school when you were a kid, today had that undeniable feeling that summer is over.  It was a couple of degrees colder, it seemed a wee bit darker out when you got up in the morning, and fewer people seem to be smiling.

Yes, we’re “back” from summer.  And I never even got a chance to put my summer tires on my car…

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  1. Jack

    at 8:15 am

    @David, you are a brave man to make predictions in this market. I will make sure to save the link to this post, and look at it again in December.

    And, by the way, on June 19 you had a great post where you looked at the listing/relisting/sale history of several dozen properties. What happened to those who were still on the market then? Did they sell? For more, for less?

  2. Joel

    at 9:27 am

    On the note of government meddling there is a lot of talk that banks are going to have to qualify all mortgages at 2.00% over what the actual contract rate us. This will have a huge impact on the market as everyone is going to lose buying power. I am a mortgage broker and would say that 20% of the purchases I have done this year would not qualify under these rules.

    That is going to lead to either a drop in sales or a drop in prices. Hopefully this doesn’t’t go through. (This is not the ‘stress test’ but an additional requirement for those with over 20%down)

  3. Milosh

    at 9:36 am

    I see this article as another attempt to brainwash the public by believe that as of September everything magically get fix and the sales will go up again like any other year before. It all depend of people. If they believe that prices will continue to fall and they will wait, the prices will definitely continue to fall down. If they will believe your prediction and start to buy houses before the prices will go up again of course the prices will go up again. Good job man, you are doing very good job!

  4. Chris

    at 9:41 am

    As most who have read my posts before may have suspected, I disagree with predictions number one and two. I won’t delve into changing sentiment, because that’s pretty subjective, and may vary depending on who you talk to.

    However, if the new OSFI stress test is implemented (+2.0% above BoC posted rate for all buyers, regardless of downpayment), this will cut buyers’ purchasing power, by some estimates as much as 18%. In addition, it’s becoming increasingly obvious that interest rates will continue to climb, perhaps with another hike tomorrow.

    Put these together, and even without factoring in what I would perceive as negative sentiment in the market right now, it’s hard to see how conditions will return to frothy and prices will bounce back in the Fall.

    1. Daniel

      at 9:54 am

      I agree that prices will increase for a very simple and unscientific reason that David alluded to: they’re so low now, they can’t get any lower.

      Coming off a peak of $920 and now sitting at $746, they’re not going to $700. They’re just not.

      1. EDWIN

        at 10:11 am

        Average sale price means nothing. As David wrote, anyone who follows the market knows that no properties have dropped 18%.

        There is room for property values to drop further, but that could happen while the “average price” actually rises.

        1. Max

          at 10:24 am

          Drop is a statistical fact and it’s not over yet. Don’t renew the lease on your Audi.

      2. Chris

        at 10:16 am


        You’re entitled to your opinion, as is everyone, and at the end of the day, we’re all just making predictions/guesses.

        However, I would caution you against making such concrete statements such as “prices can’t get any lower”. They absolutely can go lower; or they could go higher, or they could stagnate.

        If there’s one certainty about any and all markets though, it is that they can, and often do, behave irrationally.

      3. Dave

        at 10:21 pm

        You will be surprised to know that A house bought in 2013 for nearly 550k is expecting a resale price of 900k now after the approximate drop seen over the last few monts. Yea it could be expected to go down to 700k provided some renovations are done to it.

      4. Nonsense

        at 7:49 pm

        Lol @ the can’t go any lower crowd…anyone who says that is automatically a fool….

        Just like the rates won’t go up crowd….

  5. Max

    at 9:56 am

    For real, you blogged this. Seriously. Do you think the guys at OSFI are stupid? Expect the stress test to have a 10% hit on the blood. There is a 50% chance the BoC will hike rates by 25 points this week. There is a 90% chance it will happen in October. Expect 4-6 increases by end of 2018. Each one will conservatively draw 5% on the blood. Don’t forget the implications of this past July 1, 2017 and coming September capital controls by the Chinese government (bet you didn’t know of about this). YES, you might have to eat your prediction.

    1. Real2real

      at 11:58 am

      Writing an article like this could blow up the internet with all the upset people out there lol.
      The boc Will not keep raising interest rates if people stop buying real estate and if people default or have issues renewing their mortgage. If the rates go up and my home value drops then why would I sell?
      Home builders will slow new builds which has already started. If a capital gains tax is implemented I will just use equity to buy a new house and rent mine out. And as the months or years tick by, even if prices drop a tiny bit the demand for homes will grow as sales remain slow and incentive for new builds is low and the population increases. If you want cheaper then buy outside of the city. This has been a standard practice for many many years not just recently!

      1. Milosh

        at 6:08 pm

        My dear friend (Real2real).
        There is several of your statements I have to oppose.
        1/ If you want to buy cheaper you have to move outside of the town is “standard practice”?….. Maybe not anymore. Life is never ending chain of changes. Nothing last for ever.
        2/ If the rates go up and my home value drops then why would I sell?….There are lots of owners which own several properties and they depends of appreciation of theirs properties (to pay their mortgages). If the prices will go down there will be no appreciation and they will be forced to sell their properties for any price.
        3/Home builders will slow new builds which has already started. ……..Actually building of new houses is accelerating because builders can’t wait in the sideline and wait what happens. Selling new houses for cheaper is still more profitable than do nothing. See following article:

        4/If a capital gains tax is implemented I will just use equity to buy a new house and rent mine out…………
        …… If a capital gain will be implemented, buying house just to rent it with perspective of sharing your appreciation with Taxman, will be not so lucrative business like it was before. Also you have to consider if there will be just moderate increase of the prices over the years, the appreciation will be increased accordingly (just moderately). All this will more deter from renting business than encourage it. To be in your shoes I would not count to much on renting.

  6. Kyle

    at 11:00 am

    Contrary to what the media has been reporting the supply has been shrinking over the summer. Currently active listings are pretty close to what they were last year (a time when every buyer out there was bemoaning that there was no supply). Some experts have predicted a flush of new listings will come this fall, but i see nothing that supports this prediction. From past pull backs, i’ve observed that Sellers would rather sit on their property than take less than they believe their property is worth. They simply don’t return until after prices have gone back up.

    I agree with David’s prediction, it only takes a few really prime properties to entice early Buyers back out and if they do surprisingly well it will trigger a fresh wave of pent up demand. Many Buyers will be caught off guard by this and when they catch on it will simply add more fuel to a rekindled fire.

    1. Chris

      at 11:22 am


      Do you have a source for your claim that supply is shrinking? Because this is not borne out in any of the statistics I have seen. New listings are slipping, but with the slow in sales, active listings are still up.

      From Zolo, Toronto y/o/y active listings:

      Detached +82%

      Townhouse +52%

      Condo -16%

      This website shows that City of Toronto detached active listings were at almost a six year high in the month of July:

      Finally, John Pasalis notes that inventory is up y/o/y, as a result of decreased sales volume:

        1. Chris

          at 11:35 am

          Thanks for sharing that Kyle, that’s actually a pretty cool source of info.

          However, these stats are mostly comparing m/o/m, whereas your initial comment claimed that active listings were at last year’s level (y/o/y rather than m/o/m). Listings usually drop over the summer, as the market quiets down from the spring rush, and stays calmer until the fall.

          On the page I provided you, it clearly shows that detached listings are well above where they were last year. However, I will concede that condo listings are down y/o/y.

          I guess we’ll get some more info hopefully today when TREB releases their monthly report!

          1. Kyle

            at 11:41 am

            I agree the monthly report will provide more clarity. Too bad they don’t archive the full details. They only keep a summary of last years data.

      1. Kyle

        at 11:37 am

        Yes, available property numbers are up Y/Y…slightly (about 9%). Numbers below are from Zolo (not sure what they are calling “Toronto”, since it doesn’t match the numbers from Stefanos), but the trend is still the same – inventory has been dropping over the summer and is not far off last year:

        2016 – 4,540
        2017 – 4,966

        The 9% increase i would hardly call a, “Massive Flood of Inventory”, as this fake news outlet likes to convince people of:

    2. Milosh

      at 6:27 pm

      To Chris and Kyle
      The supply has been shrinking over the summer just because many seller pulled their houses out of the listings and waiting for the September to relist them again. They don’t want to list their properties to long worrying that this may negatively influence the sale of their houses. I notices lots of the houses in my area was pulled out of listings during summer while signs “House for sale” are still on their lawns.

  7. Jack

    at 11:17 am

    As for 3), the rental market is not the same thing as condos rented by individual investors. If anybody wants to discuss the latter, that’s fine, but calling it “the rental market” is confusing and misleading.

    Everybody is entitled to their own preferences. As for myself, I would rent from an individual investor only as a last resort. Perhaps if I could get a deep discount compared to a professionally managed rental building. The risk of having to chase after the owner every time something breaks, and having to move because the home is needed for the owner’s fictitious uncle, is just not worth it.

  8. Rishi

    at 11:22 am

    Listen cudos yo u for trying to change the psychology behind this market. But as a few people already stated for multiple reason this market will continue to drop. It won’t crash but throughout history it has always dropped when rates rise.

  9. Mike

    at 11:31 am

    Can I please have your instagram handle so when the market goes down further in the fall I can rub it in your face. Please? That would make me so happy.

  10. David

    at 11:37 am

    You should be embarrassed! Utter garbage. I will save this blog as my background on my phone and if it’s the last thing I do I will repost here when the market drops again. Will you answer? Will you eat your foot and admit your stupidity for posting this nonsense?

    1. tT

      at 12:08 pm

      You market bears have all the answers eh?
      Keyboard warriors by day, bachelor condo renters by night.

      1. David

        at 12:19 pm

        You are absolutely right. I am renting a condo now. I sold my house last December and locked over $750k in my pocket. Now invested in much more lucrative investment vehicles.

  11. Appraiser

    at 11:41 am

    Real estate crashes during periods of low listing inventory, strong employment numbers and robust GDP metrics are rare.

  12. Kyle

    at 11:50 am

    Everyone is entitled to their own opinion, but let’s be clear about one thing. Over many many years David has had the balls to post his prediction on here, often to comments from bitter bears calling him a shill. And over those many years, David has been pretty darn accurate…

    What would be great is for all those who have over the years insinuated that he is a pumper only to have David’s prediction be right, to please post their instagram handles or your personal information so we can all tell you how clueless and stupid you have been and rub the last 20 years in your face or tell you what garbage your comment was.

    1. Kyle

      at 11:52 am

      If David ends up being right and prices are up at the end of the year. I challenge all those who are calling him out to man up and own what you are saying today.

      1. lludmila

        at 7:50 pm

        I am “girling-up”, and I don’t agree with David’s assessment that prices will rise (dramatically, he intimated?)

    2. David

      at 12:13 pm

      Lol I have no problem with doing that. I haven’t been a bear for years. Only since December of last year. Think about it for a second. It’s common knowledge that the price of any asset is determined by and only by the amount of buyers vs sellers. The sellers, clearly, after a huge influx of listings have decided take their properties of the market and wait for this so called fall rush. The buyers obviously do not believe this fall rush will happen or else they would buying already before this happens not after. My question to you Mr. Kyle, is when these sellers start listing their homes in the fall in numbers, who will buy them? If listings have dropped and prices have stabilized, what will be the catalyst for buyers to suddenly jump in? It cannot be due to increased prices because they would have to jump back in on order for prices to go up.

      1. David

        at 12:15 pm

        Pardon my grammatical errors. I’m not attacking you just trying to have a healthy debate

        1. Kyle

          at 2:06 pm

          In my opinion most Sellers do not “have to” sell their homes. Typically only those who have some sort of major life event or are relocating truly “have to”. Those that listed and subsequently pulled their listings are people who “wanted to” sell their homes, but only if they could get April prices. I don’t see them re-listing unless those prices return, which constrains supply and then becomes a self-fulfilling prophecy.

      2. Kyle

        at 2:21 pm

        What will motivate Buyers to jump back in is the removal of any hopes that prices will keep falling. They are only on the sidelines, because they’re not sure what the market’s next move is. But once any hint that prices are not going lower, is going to get people off the fence. Already happening with condos and the top end of the market.

      3. SPG

        at 6:22 pm

        Hi David,
        Recent buyer here.. as in last week. We jumped back in because I needed a place to live and the rent I am paying is silly long term, for my family situation. We lived in the suburbs and sold in March. We tried to buy in our desired city location and lost out in bidding wars. I was devastated. We rented in the desired area paying stupid money, which I don’t regret because it reaffirmed that I love living here and commuting was slowly killing me, stressing me out making me a terrible mother and wife.

        A house came up and we went for it, and we got it, conditions and all. Gosh can I say that conditions on a deal felt amazing versus March blindly offering and praying 🙂 Do I worry about the sky falling before we move in and thereafter…yes and no because I really wanted a home for my family, the price of not commuting is massive (bye 407 I hate you) and the house was perfect for us right now. I could have waited until winter to see if prices fell further but inventory may dry up and I may not have found a house that worked for my family. I loved this place and location.

        Long and short of it…there are people like myself out there who just want a home and will still risk buying.

    3. Chris

      at 12:14 pm

      I don’t think he’s a shill or a pumper. He’s an optimist, sure, but there’s nothing inherently wrong with that.

      I’m more pessimistic and don’t personally believe that current Toronto Real Estate valuations are justifiable or rational.

      I think there are a lot of headwinds in this market, including the OSFI stress test and interest rate rises I outlined in another comment, as well as changing public sentiment, ridiculously high levels of household debt, and lots of speculative investment (particularly in the 905 on cash-flow negative properties).

      All power to David for his chutzpah in making his bets, but without a discussion of the issues raised in the paragraph above, I believe his predictions are predicated on only half the facts, and thus a bit too rosy.

      1. Max

        at 12:36 pm

        Mr David Flemming sells houses. In the long run, he is probably right. In any short run, he can be very wrong. Who cares. Makes a few hundred k’s difference to the buyer but Mr David should always gets a commission.

        1. Chris

          at 12:42 pm

          In the long run, most assets appreciate in value. You can rely on inflation to make that come true.

          However, his predictions were much more on the short-term side of things, as is my focus (within the next couple years).

          As to who cares, well, for those who bought a home to live in for the long term, shouldn’t matter much.

          But for those who are making speculative investments on cash-flow negative properties, trying to flip homes for profit, or drawing on their home’s equity through HELOCs for consumption purposes, I think it should matter.

  13. Juan

    at 12:30 pm

    I’m just happy to see some new listings. The last few months have been so stagnant.

    I hope David is wrong, but I wouldn’t be surprised if he was right. But the OFSI stress test rule would be a gamechanger if it actually happens.

    1. Max

      at 12:42 pm

      What OSFI says is the law. The banks must obey (they actually want to). They’re not gaming. Surely most certainly, OSFI will bring down the hammer.

      1. Juan

        at 12:47 pm

        The OFSI stress test rule is currently in “consultation”? I’m not sure how likely it is to be revised or instituted as is, but whatever they decide I hope they do it soon.

        1. Kyle

          at 2:16 pm

          In my opinion, the proposed OSFI rule changes will encourage one thing only. Less mortgage debt, more HELOC debt. Which i imagine is the exact opposite of what OSFI wants to see. When the qualifying rate was put in for mortgages below 20% down, Parents simply borrowed from their own homes to so they could put bigger downs for their children.

          1. Chris

            at 2:21 pm


            Can you explain why you think these new rules will lead to more HELOC debt? The propsed revision to the OSFI stress test will mean that all buyers will be subject to the stress test, regardless of downpayment size.

            You are certainly correct, many parents used HELOCs to help their children acquire a 20% downpayment and avoid both mortgage insurance and the stress test.

            However, under the new rules, the children in this hypothetical scenario would be subject to the stress test even if they had 20% down.

            I don’t quite see how this would logically result in greater HELOC debt?

          2. Kyle

            at 2:27 pm

            I totally get that.

            When little Johnny only has $X and can only borrow $Y, but wants a house that cost $X+$Y+$Z. Dollars to donuts, Mom and Dad will be the ones coming up with $Z.

          3. Chris

            at 2:35 pm

            Ah, I see what you mean.

            However, I don’t think it will be as rampant as you suspect. Right now, Johnny is using Mom and Dad’s home equity/HELOC to push him over the 20% downpayment limit, and thus avoid the stress test.

            Under the new rules, Johnny will be subject to the stress test (+2.0% over BoC posted rate), comparing his income to the amount of mortgage he wants. I suppose there are some parents who will be able to pony up enough cash so that Johnny’s mortgage is reduced enough in size so that he may pass the stress test. But I suspect this will not be that common, particularly with interest rates climbing, HELOC use already rampant, and indebtedness (particuarly in seniors) climbing:


            There’s only so much debt we can take on. We’ve been through quite a big expansionary phase of the credit cycle. At some point, the deleveraging occurs.

          4. Kyle

            at 2:58 pm

            I wouldn’t assume that parents can’t/won’t help out their kids. Even at today’s “cooled” prices, most Toronto home owners who have adult children have built up YUGE equity in their homes.

            But let’s also be clear if little Johnny can only borrow $Y at 2.99%, the amount he can borrow at 4.99% with Mom and Dad’s help is the actually….

            …the exact same amount.

            Example: Say Johnny has $200K and qualifies to borrow $800K at 2.99%, at 4.99% the amount he can borrow becomes $652K. Mom and Dad come up with $148K. Which cost Mom and Dad $700 per month at 2.99%, but Little Johnny can actually afford to pay Mom and Dad back the $700/month (since he already qualified for 800K at 2.99%).

          5. Chris

            at 3:09 pm

            For sure, I agree with you that many older Toronto home owners have built a lot of equity in their homes over the years. However, let’s also recognize that many of them may have dipped into this already for consumption (home renovations, vacations, boats, etc.), and that many in this cohort are not fully prepared for retirement (and thus may be relying on their home’s equity to finance their golden years).

            I’m also not too sure how many parents would be keen on handing over $150,000 to their adult children to purchase a home. I’ve certainly heard of smaller gifts/loans to help with downpayments, but that is quite a substantial amount. I’m sure there will be some who will happily lend this hand to their children, but others will balk at this steep amount required to help Johnny climb on the property ladder at the rung he desires.

            Finally, small side note, but many HELOCs have a slightly higher interest rate, around prime+0.50%. So rather than 2.99%, Mom and Dad would likely be paying 3.49% on their HELOC to finance Johnny’s home purchase. Not a huge difference in monthly payment, but should many HELOCs are variable and subject to immediate change if/when the Bank of Canada hikes rates.

          6. Kyle

            at 5:00 pm

            There are close to 2 million residences in Toronto, with an average price of about 750K. Given that 43% of homeowners are mortgage free. The amount of equity that can still be tapped is considerable. Especially when there are “only” about 100K sales in Toronto per year.

            Obviously time will tell. But many retired folks that i know who own their homes outright and have dutifully socked away money in their RRSPs, are now finding themselves more flush then they ever dreamed thanks mainly to their principal residence. They literally have become millionaires without realizing it.

            Many have the attitude, “I can give it to them when i’m dead, or i can give it to them now when they can actually do something with it”.

          7. Kyle

            at 5:22 pm

            Also, when a parent cashes out equity and hands it over to their kid to bring them to 20%, most often takes the form of a hand out. Whereas a parent that borrows from their equity at the market rate and then passes it through to their kid, because he didn’t qualify at some arbitrary qualifying rate, would be considered a loan. I think most parents and most kids (i.e. doesn’t feel like there are strings attahced) would prefer the latter scenario.

          8. Chris

            at 5:54 pm

            I don’t think the 43% includes those who have a HELOC. Figures from Mortgage Professionals Canada show that 3.57M of 9.86M Canadian homeowners have no mortgage or HELOC debt; works out to about 36%. However, notice that this is for all of Canada, from Vancouver/Toronto, to less pricey markets like Halifax or Montreal. I suspect the rate of those who are mortgage and HELOC free in pricey places, like the GTA, is lower.

            As to the older generations dutifully preparing for retirement, statistics I’ve seen do not match your optimism.


            Finally, did you mean to say they would prefer the former scenario? Cashing out and giving the money to their child as a hand out, rather than a loan? I would agree with you, most people would prefer a gift over a loan! But again, I question just how many people will be eager to hand over $150,000, particularly if they are not solidly prepared for their own retirement, and if Toronto real estate values continue to decline.

            As you said, time will tell. Where’s that damn TREB report??

          9. Kyle

            at 7:36 pm

            In all seriousness, i think most functioning adults would prefer a loan over a hand out from their parents, to spare them from the baggage, sense of obligation and attached strings that come with that kind of “gift”.

          10. Chris

            at 8:05 pm

            Oh, I legitimately thought you meant to imply most people would prefer the gift. But you raise a valid point, about the sense of obligation that comes with a gift, rather than a loan.

            That being said, I have loaned money to family before. I will never make that mistake again.

            Personally, I’m of the opinion that you should buy what you can afford. If you need Mom and Dad’s help to buy a house, then maybe you should rethink your price range, and buy something a little less expensive. But that attitude seems old fashioned these days.

          11. Kyle

            at 9:22 am

            I personally don’t t disagree with the buy what you can afford principal, but what we are seeing play out in Toronto has long been the reality in every major city in the world. Only those from wealthy families can afford to own in the most expensive cities in the World, and by assisting their children to buy these families are further accumulating their overall wealth.

          12. Chris

            at 9:39 am


            While I would tend to agree with you somewhat when it comes to the core of Toronto, and perhaps even the 416 as a whole, that argument does not, in my mind, extend to the 905.

            Particularly when you look at homes on the periphery (within commuting distance) of major cities, like New York and San Francisco, you can see just how wild valuations are in places like Ajax, Georgetown and Barrie.

  14. Lise

    at 1:46 pm

    Great article….time for lazy buyers to get off their butts before prices go up again !

    1. Anny

      at 1:50 pm

      AGREED! Too many buyers are sitting around doing nothing and waiting.

      They will surely REGRET when prices skyrocket quickly and suddenly, and they can’t afford to buy anything.

      1. EDWIN

        at 3:02 pm

        I can’t afford to buy even at today’s prices (before they “SKYROCKET”). So I’ve got nothing but time.

        If prices never come down it makes no difference to me, I will continue to rent.

  15. Pacnn

    at 1:52 pm

    Let’s be realistic here. The drop in sales is just the market “taking a break”…

    Prices and sales will explode very soon….

    1. JCM

      at 3:10 pm

      Prices may increase marginally in Sept. and Oct. due to seasonality, but the new OSFI stress test and interest rate hikes are going to weigh down prices for years. Many of the unsold houses from May to June (and houses that were the subject of a sale that fell through) will be relisted in September and October. Speculators will continue to flee the market. Inventory will be up and prices will likely be down year over year for September. Optimistic predictions are no match for those headwinds, I’m afraid.

      The conditions that caused the Spring mania will not return, and the prices that resulted from that mania will, accordingly, not return.

      Party’s over.

  16. Frankie T

    at 1:54 pm

    Do people really think the Toronto housing market will crash? LOL

    If you look at past stats, prices and sales coming roaring back up

  17. Chris

    at 2:19 pm

    Frankie, Pacnn, Lise, and Anny (who I suspect are all the same commentor just using different names),

    You seem very sure of yourself.


    – the recent 19% drop in average price

    – OSFI stress test which will reduce purchasing power by ~18%

    – further increases in interest rates

    – record levels of household indebtedness

    – huge amounts of speculative demand in the run up (which will wane with falling prices)

    – reduced foreign demand both due to foreign buyer’s tax as well as China’s capital controls

    – Toronto real estate being at it’s least affordable since 1990

    – population growth coming in well below expectations

    you somehow believe that prices will skyrocket/explode/VERY QUICKLY bounce back? And that anyone who doesn’t BUY NOW will REGRET it?

    Please, present me with a logical explanation behind your predictions, with some facts and data to back up your position.

    I’m happy to have a debate with those who can back up their predictions with fact. While Kyle and I may disagree, he often brings good data to the table in support of his position, and is able to put together a coherent, reasonable argument.

    You, however, are just spouting unsubstantiated opinion as though it were fact. It is disingenuous.

    1. lludmila

      at 7:46 pm

      Correct on all counts. No one (not even a wishful agent) can predict the direction of prices. Market prices are driven by buyers, not sellers. Agents don’t care about price direction…they just want churn (i.e. keep selling and buying, because they get a commission). We will be entering a period of year-over-year price declines starting in February….simple math.

    2. Daniel

      at 4:53 pm

      Chris, it’s an interesting aspect of all the statistics sloshing around – you can draw whatever conclusions you want from them. Affordability ratios – what’s the benchmark, Canadian historical, other major global cities? What’s a viable private debt ratio – is US circa 2007 relevant, what about the UK or any of the scandinavian countries? Have prices gone down and, if so, by how much?

      I think uncertainty is the only justifiable position at the moment – whereas lots of folks, yourself included, seem might certain about which way this thing is headed.

      1. Chris

        at 7:53 pm


        For sure, you can look at stats and draw different conclusions from the ones I arrive at.

        And I agree with you, the uncertainty is palpable.

        I don’t mean to imply in any of my posts that I am certain about which way we are headed. I certainly think the downturn will continue, and I base my opinion on the headwinds I perceive from the statistics. But that’s just what I think. I’m not so arrogant as to say “for sure prices are going down”; simply, I think they will, yet I could very well be wrong.

        Nobody has a crystal ball, but we all have, and are entitled to, our opinions.

  18. O

    at 2:21 pm

    A very quick google search reveals:

    Forbes Magazine: TORONTO 4th most livable city in the world

    Telegraph UK: TORONTO in the top 20 best cities in the world

    Business Insider: TORONTO 4th most livable city in the world

    Not best in Ontario. Not best in Canada. Not best in North America. Not best when compared to that real nice small town you visited once in the early 90’s. BEST. IN. THE. WORLD. World, as in the ENTIRE PLANET, as in the only planet in the known universe to have cities to begin with.

    Yup. Prices are sure to sink real fast.

  19. Appraiser

    at 6:10 pm

    Where are all of the “specuvestors” that should be listing their properties and bailing out of this ‘crash’ ?

    Answer: They already got out of dodge…and there weren’t that many of them.

    Unless the law of supply and demand changes, we are a long way from a balanced market. Sellers still rule, especially in the 416.

    1. Chris

      at 6:20 pm

      ~10% of home sales associated with investment (as cited by the Bank of Canada). Is that “not many” in your books?

      As to where all the listings are, well for one, as discussed earlier, active listings are up y/o/y. Detached Toronto listings are at almost their highest level in six years.

      Secondly, why don’t we see where sit at the end of the week? Last year, 3,321 new listings came online in the four days after Labour Day.

  20. Paul

    at 8:50 pm

    The August numbers must be pretty bad if TREB held off on releasing them today.

  21. Sevyn

    at 9:20 pm

    Oh boy! I can see very very good points in this blog but I really think the prices are going to decline more before going up. There’s too many rules in place by the government and rates are higher and homes are barely affordable. The government didn’t give the rules a chance to set in. They meddled so much that now buyers have lost complete faith in the real estate market. I’d normally be the one to say the market is definitely heading for an uptick like Vancouver, but today? I’m on the other side. I don’t think it’s happening folks. Perhaps in 5 years from now. I really don’t see it happening this fall!! I hope and pray I’m wrong though…. let’s wait and see. I was one of the seller’s who sold in this terrible market and ‘lost’ 100K on my home. I can say first hand I saw no one at any open houses and no one making any offers. It was a definite hot and cold market. Nothing in history has ever been like this. This was drastic and it will get worse before getting better.

  22. Max

    at 11:34 pm

    I don’t care what they say. A ~20% price drop in 4.5 months is epic. This statistical fact does not point to a soft landing. Actually, it’s historical.

    The much lower volume won’t help many of the 50k GTA realtors survive. (Yes, 50k, not sure who you love more, but there are more realtors than lawyers these days in the GTA.) A comparable city like Chicago has far fewer sellers. So expect a lot of real estate apologetics and house pumping. It’s going to get tough for the average realtor. It getting normal again where conditional offers are back, buyers are more cautious, and the smart ones won’t hesitate to ask for haircut on the commission. So let’s add up the equation: low volume * lower commission * more realtors = ??

    It ain’t over yet. Canada is the poster boy performer of the G7. Dollars at 81 cents. And you know what’s coming next… rate hikes. OSFI has an ax to grind and they are no friend to realtors. Yikes! More is coming.

  23. Kramer

    at 1:00 am

    Sorry if this has already been covered in the comments…

    It seems like the topic is the Overall Average Price (call it the “OAP”). This needs to be broken down. Since April the OAP has decreased.

    Reason #1: A greater % of the sales has been in condos. This automatically drops the OAP.

    Reason #2: While condo prices have increased, single family home prices have dropped. My opinion on this is that within single family home segment, a higher % of the sales are for less expensive single family homes and, as David eluded to, it’s not so much that $1MM houses are now selling for $800K.

    For years people have been saying that if the market drops, it’s going to be condos that go first because there is so much supply and they are building new ones all the time. Countless times I heard people say “well i don’t want to buy a condo now because if the market drops, my condo is going to drop first.” This has obviously not been the case.

    I believe the key question here is: Why is the drop happening the opposite way? A clear understanding of this should be factored into any forecasting of the rest of 2017.

    There is still huge demand for real estate as shown by condo sales. As condo prices rise or even stay steady from this point, more condo owners can make the move into single family homes. But it now appears that prospective single family home buyers/upgraders are the ones afraid that they will buy at the peak, not condo buyers. Their confidence is shaken, and they are sitting and waiting things out. I don’t blame them given that the government has been hyper-actively trying to cool the market for a year.

    A month ago or so I gave my opinion that the Toronto market would follow the same path as Vancouver, in that the foreign buyer’s tax would have a short term impact (buyer apprehension most notably) and then it would start a new path upward. I think this outlook is still plausible in Toronto given what has taken place over the last 3 months.

    1. Max

      at 7:42 am

      Answer to your key question: some older geezers are house rich and cash poor. Time to cash out and a very good idea! Certain foreigners figured condos are more portable investments, especially for their permanent resident kids. Lastly, affordability under $1M as you know from July OSFI rules.

      More fundamental problem is: many of the 50k sellers are moisters, lack experience and minted themselves with a 6-week program in real estate during the last couple of years with high hopes. Integrity for some of them is a real issue. Not being able to tell the truth and accept the facts will only make things worse for their naive customers. So you have, a shameless brew adding to an impending hit (as least for the guys who bought from last summer to April). A whole year of gains wiped out in a short while. More to fall. No sight of bottom yet. Advice to the house rich, cash poor: bail now. Holy batman.

      1. Kramer

        at 9:54 am

        With all due respect, I think you are making some pretty wild generalizations.

        It’s one thing to generalize and say that buyers are waiting things out – this is logical.

        It’s another thing to generalize and say that the active market is made up of the 0.000001% of the population that attended sleazy get rich on real estate expos.

        I think there’s more to the answer for this key question. So I am going to repost it again at the top of this message board.

  24. Appraiser

    at 7:11 am

    TREB data now available for August. Sales volume down 34.8%. New listings down 6.7%. Average prices up 3% year over year. HPI index up 14.3%.

    “The number of new listings entered into TREB’s MLS® System, at 11,523, was down by 6.7 per cent year-over-year and was at the lowest level for August since 2010.”

    Some “crash”.

      1. Kramer

        at 7:25 am

        Overall Average Price? Including condos? Read my post below as my reply to your post if you please.

          1. Kramer

            at 10:58 am

            So either I argue that the market is doomed, or I am a real estate agent?

            Your dichotomizing attitude offends me.

            You’re a douchebag.

  25. Appraiser

    at 8:12 am

    Oh, one more data point from TREB. Months of listing inventory: 1.4

    A balanced real estate market (where buyers and sellers are on equal footing) is considered to be between 4-6 months inventory.

    It is literally a text-book example of a sellers market.

  26. Appraiser

    at 8:36 am

    Fun with numbers for all of the bears.

    The year 2015 ended with an average price of $622,000. In 2016 the average by year end was $730,000.

    The average price year to date for TREB is $845,555.

    Hands up; how many think the average price by the end of this year will be lower than $730,000 ?

    1. Chris

      at 8:47 am


      Let’s clarify things a little bit.

      You say TREB’s Months of Inventory is 1.4. Please notice, on page 27 of the report, point 9, MOI is calculated using a 12 month trailing average. Given how the market has changed in the past 4-5 months, I question the validity of using a 12 month trailing average for MOI. I suspect MOI would be significantly higher if calculated as it stands today.

      You say average price YTD is $845,555. How did you arrive at this number? Did you take the monthly average prices from January to August, and then average those? That is not a valid measurement. It clearly says on page 1 of TREB’s report, the TREB average price is $732,292 as of August, 2017.

      As I’ve said to others before, I’m happy to debate predictions, but you are presenting disingenuous and downright fictitious statistics.

      You also have yet to address my points below, regarding speculative investors and supply of listings.

      1. Chris

        at 8:59 am

        My mistake, the YTD price is on page 2 of the report.

        However, my criticisms of this number still stand. It lumps in sales in January-April with sales from May-present. As with MOI, in a market that has turned over the past 4-5 months, I quesiton the validty of continuing to present data from 9 months ago.

  27. Kramer

    at 9:57 am

    For years people have been saying that if the market drops, it’s going to be condos that go first because there is so much supply and they are building new ones all the time. Countless times I heard people say “Well i don’t want to buy a condo now because if the market drops, my condo is going to drop first.”

    This has obviously not been the case.
    – Condos sales are up
    – Single family home sales are down

    NONE of you bears (nor bulls) predicted it would happen this way 6 months ago. NO ONE.


    I believe the answer to this question unlocks the forecast for the rest of 2017 and beyond.

    1. Chris

      at 10:08 am


      You claim “condo sales are up”. However, on page 1 of the TREB report, it clearly says that y/o/y condo apartment sales are down 28.0%. Prices are up 21.4% y/o/y, but have fallen from the April peak.

      I don’t know the answer as to why things are happening this way, but just wanted to clarify those comments.

      1. Kramer

        at 10:16 am

        If it pleases you, insert “Condos have drastically outperformed single family homes since April”.

        If you’re looking for a metric, then use price.

        It doesn’t change my question… NO ONE predicted any slow down would happen this way. NO ONE.

        1. Chris

          at 11:30 am


          For sure, condos have outperformed SFH from April to present. However, both have seen prices decline, admittedly by far more for SFH than condos. Additionally, both have seen y/o/y sales volume plummet.

          The difference between these two parts of the market is interesting. Personally, I think condos will eventually follow the downturn being experienced in SFH, but that’s just my guess.

          Definitely agree with your other point in my comment above though; interest rate hikes will not do any favours for home prices. I wouldn’t be surprised to see another hike before 2017 is out, assuming economic data continues it’s recent strong trend.

          1. Juan

            at 12:11 pm

            I think the big answer is affordability. Condos are the only option many people can afford. Once SFH’s and semis drop some more, things may shift, but it doesn’t appear we have reached that point yet.

            People originally thought condos would drop due to oversupply, but it turns out they are undersupplied just like everything else.

    2. Hello

      at 10:29 am

      Sorry Kramer, I’m not a bull and I am not a bear. You shouldn’t dichotomize people as either no more than I should call you a “moister” who wants hard and fast answers. Kramer, if you want to hear wisdom, first begin by curbing your assuming attitude. If you feel you are too smart to hear my comments, just ignore this:

      The condo market and detached market are quite different. Different buyers with different set of requirements. Try reading some of the very good comments below to understand the fundamental drivers. Or watch the subways go by (it will help you understand traffic is one of the drivers). I suppose to some level, one is a substitute for the other but overall, condos and detached are distinct markets. This is sort of like how each neighborhood or area in the city is its own market segment. Like many here, I believe the major parameter was really the supply inelasticity (think economics 201 with the vertical S curve) of the market. There wasn’t really enough housing due to various zoning and government restrictions. Add in the foreign demand, even a small amount trickle, would cause prices to hike. The issue is the trickle wasn’t really a trickle after all. It was a silent and quiet gush. The government doesn’t even have clear stats on these foreigner buyers so that is why Stats Can recently announced a very big investment to collect more data. See here:

      The official bodies quote figures like 8 or 11% foreign dollars. But those numbers are questionable due to self-identification and reporting bias. Probably on the conservative end as many foreign cultures do not like showcasing. (I’m guessing so don’t quote, it’s probably at least double that self-reporting figure). Many of these investors come from countries where all they see and can afford are condos. They are accustomed to it – a lifestyle decision. Remember, many are mainly here for schooling of their children (Canada has a wonderful education system) so a condo is a really attractive low maintenance investment.

      1. Kramer

        at 10:52 am

        I’m really sorry if I offended you by dichotomizing between bulls and bears.

        The horror.

    3. Kyle

      at 10:36 am

      My 2 cents: people’s views on housing type are gradually changing. Rising prices will do that. In my view the brass ring has dropped down a couple of rungs. It wasn’t that long ago, that detached houses in the 416 were considered the brass ring and people would poo poo semi-detached houses in urban neighbourhoods. Now semi-detached houses in Leslieville, Roncy and Davisville are a pipe dream for most.

      IMO, people are starting to accept condos as a perfectly acceptable form of “home” ownership. Families are looking at 2 bedroom units, instead of the previous default of buying a town/semi or a suburban house. I view this as a natural maturation toward big city sensibilities.

      All that said, detached houses are not a thing of the past, similar to other large cities, the fact that they’re not building anymore and are starting to tear down what is there guarantees that they will become prized trophies going forward.

      1. Kramer

        at 11:05 am

        So then is the ‘spread’, if you will, between condos and single family homes going to shrink?

        Is it fair to say that:
        – If yes the spread will shrink, then the market can sustain a lull for some time. ?
        – If no the spread will not shrink, then the market will rebound in the short-med term. ?

        1. Kyle

          at 1:39 pm

          My view is that the spread shrinks in the short term: more larger condo units being bought, which changes the composition and brings up the condo average price, but longer term the spread increases again due to capped SFH supply.

    4. Jack

      at 8:37 am

      @Kramer, re: WHY IS THE DROP HAPPENING THIS WAY? (condo prices up)

      For condos, as for other market segments, the average sale price per unit can be misleading. A more meaningful number would be the average sale price per condo square foot (or square meter if you prefer). Anybody knows how that has been changing?

      1. Kramer

        at 9:32 am

        @Kramer, re: WHY IS THE DROP HAPPENING THIS WAY? (condo prices up)

        For condos, as for other market segments, the average sale price per unit can be misleading. A more meaningful number would be the average sale price per condo square foot (or square meter if you prefer). Anybody knows how that has been changing?

        Putting this near the top so we can get this thread to 150 messages…

        Great question, I would love to see that data… it would actually be useful, unlike a lot of the stats people spew on to this board.

        This really opens the floodgates on how any figure can be misleading… especially the overall average sales price which is always most talked about. They should simply never talk about that data point, and we sure as hell shouldn’t be arguing about it. At the very least only go as high-level as Condos and Houses, for data and our debates alike.

        So much data, and no one correct analysis available. Never granular enough. This is where anecdotal data/observations can be so useful… because at the end of the day if you had to sell your house, comps are obviously used as a base to establish a fair market value. Here’s a few of my recent anecdotal observations:

        1. In my neighbourhood, practically no houses have been selling (I can think of 5 all summer), but at the same time, nothing has sold for significantly less than it would have earlier in 2017. I thought maybe one buyer got a good price, maybe 10% less than in a frenzy. But overall, both buyers and sellers are waiting. A few houses have been on the market literally all summer… no list price decreases.

        2. One thing that did sell recently, and sold FAST, was a detached bungalow on a great street, sold at list price, which was a strong price. Is this because a bungalow on this street is an automatic “add value” opportunity? I think it is. Gives some buffer for any uncertainty.

        3. There are currently 10 houses for sale from Parkside-to-Dufferin / Bloor-to-King (not my neighbourhood, fyi). That is a large area. 10 houses, as at Sept 7th i.e. start of the “fall market”. That’s not a lot of houses. To be fair, however, they are expensive… so are there enough buyers with that kind of buying power who want to use it exactly right there in that area?

        I think the jury is still out and that the market is in a delicate phase right now and it will depend on how a lot of other things pan out.

      2. Kyle

        at 4:47 pm

        I agree and that was what i was alluding to. I don’t think people paid 20% more for that one bedroom condo last month than they would have the year before. I suspect condos have gone up to some extent, but i also think more larger units in the Aug 2017 sample is in part responsible for some of that gain.

    1. Kramer

      at 10:23 am

      Yah… no matter what side any of us take on the market… there’s only three certainties in life… death, taxes, and increasing interest rates do not help house prices!

  28. Appraiser

    at 12:41 pm

    “Looks like the slump is very compositional, as the MLS Home Price Index still shows values up 14% y/y overall & 10% y/y for detached houses.” ~ Ben Myers.

    Keen observation from probably the best housing analyst in the GTA (or Canada for that matter).

    1. Chris

      at 12:59 pm

      You mean Ben Myers who works in marketing for Fortress, the real estate developer? The same Ben Myers who has a B.A. in economics from a low ranking American college? The same Ben Myers who regularly contributes to the Huffington Post, BuzzBuzz Home, The Toronto Sun, and other lackluster publications?

      Ya, I don’t think I’ll be placing much weight on his opinion. You would be wise not to either. Instead, turn to the opinion of more educated and impartial observers, such as the Bank of Canada, CMHC, big bank economists, international organizations, and the like.

      To call Ben Myers the best housing analyst in the GTA just proves that you’re nothing but a troll. I suspected as much when you were unable to defend any of your previous arguments.

      1. Kyle

        at 1:34 pm

        I disagree, Ben Myers is an excellent Analyst. Regardless whom he works for his understanding of the market and his analysis is solid. And regardless where his degree is from, it’s still one more Economics degree than Turner, Rabidoux, Carrick, Kirby, MacBeth, Pasalis combined.

        1. Chris

          at 1:54 pm


          Notice I said sources like the Bank of Canada, CMHC, big banks, etc. All staffed by highly educated, highly experienced people. None of the “Turner, Rabidoux, Carrick, Kirby, MacBeth, Pasalis, etc.” would fall into this category.

          If you want to use Ben Myers’ bias opinion to counter Garth Turner’s bias opinion, that’s fine. But don’t use it to try and counter commentary of Stephen Poloz. They are in completely different leagues.

          1. Kyle

            at 2:26 pm

            Fair enough but lets be honest, you’ve also been known to provide analysis from less than those esteemed sources: Pasalis included. If you can dismiss Ben on those basis, then should you not apply the same dismissal to all the sources whom you agree with?

            As well, i’ll relate an instance that i recall happening recently. Dana Senagama from CMHC (i’m sure she has a fancier degree than Mr Myers, but is also widely interviewed by Huff Post) released some alarming data about an increase in the number of unsold condos and sounded alarms of overbuilding, which the media latched on to and started churning out stories about the coming condo crash. So CMHC is not infallable. But the story gets better. Ben Myers was the only one whom i’m aware of that openly questioned her numbers because they didn’t make any sense. And shortly thereafter i recall Ms Senagama saying the number they had reported was incorrect and due to some sort of administrative error. And then shortly after that CMHC started putting out a bunch of releases about how the condo market was actually quite safe and how low the unsold inventory was due to pre-selling.

            Time proves who’s right or wrong not credentials or employer and Ben Myers (and David Fleming while i’m at it) have pretty impeccable track records.

          2. Kyle

            at 2:48 pm

            “Unsold inventory numbers have been a major concern in the industry and CMHC set off alarm bells last spring when it released data for May showing a shocking 41 per cent jump in unabsorbed condos in one month.

            Urbanation tracked the jump to the Regent Park area, where CMHC said some 785 units remained unsold. In fact, almost all had been, and some time ago. CMHC corrected the numbers the next month. Senagama attributed it to a paperwork problem.”


          3. Chris

            at 4:25 pm

            I will readily admit to sourcing Pasalis, mostly because he has provided some good research and data, particularly with regards to speculative investment and MOI; I’m more hesitant in employing his personal opinion in my posts, but I probably have employed it from time to time, if I’m being honest.

            I don’t think (or at least I can’t recall) using Turner, Carrick or MacBeth in any of my posts. While I sometimes read Carrick’s articles in G&M, I don’t follow Turner’s or MacBeth’s musings/rantings.

            I don’t actually know who Rabidoux and Kirby are, but given the company, I assume bearish commentators? But I definitely have not sourced them in previous posts.

            The CMHC error is regrettable, but this was an error of research. That happens when conducting research and analysis.

            What I am discounting is Ben Myers’ opinion. I consider him a biased source, and less experienced and credentialed than say Stephen Poloz, Doug Porter, Benjamin Tal, Avery Shenfeld, David Rosenberg, etc. etc.

            While Ben Myers makes predictions, most of the economists I’ve listed above have not. Rather, they issue warnings in their opinions and statements, saying that certain metrics are out of line with historical norms, and indicative of problematic conditions. Poloz never said GTA housing will drop in price by Oct. 31; what he did say is that caution is warranted because fundamentals do not support 30% y/o/y price appreciation. Let’s also not forget the old adage: Past performance is not indicative of future results.

            Finally, as I’ve said multiple times, I’m happy to have these debates with you, Kyle. However, at this point, surely you must agree that this Appraiser fellow is a troll. He is unable or unwilling to defend any of his points, and is now discussing TREB average price during the 2008 Financial Crisis.

          4. Kyle

            at 4:48 pm

            I disagree, Appraiser has been very astute in the past and has “bottom lined” things, which when viewed in hind sight have also proven to be bang on. Just because he doesn’t engage does not mean he is a troll. In my view he states his opinion and leaves it to whomever to take it or leave it. Frankly, i often admire his self control, as many of the debates/arguments fruitlessly end in each side simply not taking anything but what they came in with.

          5. Chris

            at 5:02 pm

            To my mind, someone who shouts their opinion without fact or data to back it up, and is unable or unwilling to defend their position, is a troll.

            Appraiser fits the bill.

          6. Kyle

            at 5:04 pm

            While the error on CMHC’s part may have been regrettable. The fact that Ben Myers was able to catch it without CMHC catching it, pretty much solidifies that the man knows his sh1t.

          7. Chris

            at 5:30 pm

            Then you and I differ in our assessment. To my mind, catching an error does not now make Ben Myers’ opinion worth more than that of the CMHC.

          8. Kyle

            at 7:58 pm

            This is indeed where we differ and not meant as a slam, i don’t put Poloz’s or Myer’s opinions above anyone else’s, not even a four year old child’s. I personally apply zero weight on whose opinion it is or who is making the argument and 100% weight on the substance of an argument in deciding on whether i accept or reject it.

          9. Chris

            at 8:05 pm

            That’s alright. We’re all entitled to our opinion on how much weight we put on other people’s opinions!

          1. Kyle

            at 8:06 pm

            I stand corrected, Ben has the same number of Economics degree as the lot of them.

            But given that i have the same degree as Pasalis, i feel qualified in saying that those years spent in Sid Smith Hall, Med Sci building, Lash Miller, Ramsay Wright et al, don’t actually better prepare anyone to be a Toronto real estate expert.

      2. Max

        at 3:05 pm

        Agreed except for CMHC. Just look at their July 26 press release. So they waited over 3 months+ before staking a position FFOGIW (for fear of getting it wrong). Even mice have bigger balls.

        Fleming seems seasoned and educated. Ben certainly dresses well. Pasalis is well respected and shows a great level of integrity. But I would trust Garth Turner ( more than any of them during a down market.

    2. Hello

      at 2:44 pm

      Biased? Ben Myers..

      “Since joining Fortress Real Developments in early 2013, Ben has become an integral member of the marketing and realty teams. Ben’s primary responsibilities include due diligence and underwriting of prospective development projects in conjunction with the stakeholder management team. He also produces research and educational content regarding the conditions of local, metropolitan and national housing markets via robust statistical reports. His Market Manuscript reports have received press coverage in the Globe and Mail, the Calgary Herald, the Winnipeg Free Press, BNN, and Money Sense magazine.

      With 15 years of real estate research experience with Clayton Research and Urbanation in Toronto, and The Meyers Group in Dallas, Ben established himself as an expert on the new housing market. Ben has been quoted in the Wall Street Journal, the Toronto Star, and the Financial Post, while appearing on Global, CTV, CP24, and BNN to discuss the housing market. As an in-demand public speaker, Ben has presented or been a panel member for ULI, BILD, OHBA, the Canadian Apartment Investment Conference, and many more.

      Ben has an undergraduate degree in Economics from UTA, and has taken additional courses in Urban Land Economics and Real Estate Finance at UBC and MIT. Ben is also a licensed mortgage agent with Building & Development Mortgages Canada Inc.

      Ben currently contributes articles to the Huffington Post, the New Condo Guide,, Buzz Buzz Home, and the Toronto Sun on a regular basis, in additional to writing regularly for the Fortress blog.”

      Yes, I think Ben penned this himself. Wow, look at those credentials. How can this man not be objective and unbiased?

      1. Kyle

        at 4:07 pm

        Doctors, Dentist and Car Mechanics are all also biased, since their diagnoses/advice dictates how much treatment/service you’ll need. Do you also dismiss everything they say without at least giving some thought to the what they say?

        1. Chris

          at 4:28 pm

          Doctors and dentists both have professional codes of ethics to adhere to. Ordering unnecessary tests or treatments purely for the purpose of increased revenue/profit can result in significant penalties.

          As far as I know, employees at real estate development firms are not bound by the same types of professional codes of ethics.

          (mechanics, well ya, not many people trust them outright, that’s why everyone always asks around for a trustworthy one!)

          1. Kyle

            at 4:58 pm

            So my point is this. Both you and Hello have quickly dismissed the comment because it was attributed to Ben Myers, but neither have actually addressed the original argument itself. If Ben is nothing more than a shill, shouldn’t you be able to shred his original argument to confetti?

            At least when i call out BetterDwelling for the click bait sham that they are, i more than back up my claims of fake news by gutting their garbage hypotheses. Which StatsCan subsequently awarded me the TKO win for, by issuing this statement:

            Plenty of anecdotal tales exist of condo buildings where the lights never go on at night, but vacancy theory proponents often support their argument by citing a Statistics Canada release in February 2017 that looked at the total number of private dwellings in the country versus private dwellings occupied by usual residents.

            The agency said that’s just wrong.

            “Sometimes, people believe that they can use the census counts to get a picture of unoccupied dwellings by subtracting total private dwellings from private dwellings occupied by usual residents,” StatsCan said in an email response to a query.

            “This is not the case since unoccupied dwellings only represents a portion of the remainder. In other words, the data should not be used to analyze unoccupied dwellings.”

            I expect at least that much if you’re going to call someone out as a shill.

          2. Chris

            at 5:29 pm

            Ben Myers is trying to paint the Toronto real estate market in a positive light. I have spent numerous posts here explaining why I disagree with that assessment, discussing the various headwinds, reinforced by the interest rate rise today.

            I didn’t feel the need to repost my opinion. Instead I just said I don’t place much weight on the opinion of Ben Myers.

            Now if Stephen Poloz came out and said that fundamentals support current valuations in the GTA, that I would place some weight on.

    3. Nonsense

      at 7:46 pm

      MLS HPI index is complete bullshit…. Nice try though… Lipstick on a pig of a market

  29. Appraiser

    at 3:37 pm

    The GTA market has proven to be very resilient. The greatest hit to the market in recent memory was the Great Financial Crisis (GFC) when sales dropped on TREB from 93,000 units in 2007 to 74,500 in 2008. Yet remarkably the average sale price was up slightly from $376,000 to $379,000 year over year!

    1. Max

      at 6:04 pm

      But that was then. This is now. The last time our economy was this hooked on housing dope like now? That’s right. Never. GFC was an American perversion of various asset backed securities, subprime and a cocktail of corruption. Now, it’s Canada’s turn, only uglier. We wanted the foreign money to buoy our GDP and our currency. Here we go, we got it. Will be a slow price retreat with low volume. Take years to bounce back. Some lesser realtors will starve and others will have second and third jobs. Already, $180k of equity wiped out since April for the average GTA home. Do you know how long it takes to pay off that amount of mortgage principal. That’s right, about 10 years on the average payment scheme. Who cares, the realtors still love you. Remember to buy buy buy. Yes, buy now. But buy at your peril.

      Get the real stats here:

    2. JCM

      at 1:33 pm

      Remember how the Bank of Canada slashed its rate from 4.5% to 0.5% during that period?


  30. Free Hat

    at 7:34 pm

    “In the ruin of all collapsed booms is to be found the work of men who bought property at prices they knew perfectly well were fictitious, but who were willing to pay such prices simply because they knew that some still greater fool could be depended on to take the property off their hands and leave them with a profit.”
    -Chicago Tribune editorial of April 1890

  31. Kramer

    at 9:33 am

    @Kramer, re: WHY IS THE DROP HAPPENING THIS WAY? (condo prices up)

    For condos, as for other market segments, the average sale price per unit can be misleading. A more meaningful number would be the average sale price per condo square foot (or square meter if you prefer). Anybody knows how that has been changing?

    Putting this near the top so we can get this thread to 150 messages…

    Great question, I would love to see that data… it would actually be useful, unlike a lot of the stats people spew on to this board.

    This really opens the floodgates on how any figure can be misleading… especially the overall average sales price which is always most talked about. They should simply never talk about that data point, and we sure as hell shouldn’t be arguing about it. At the very least only go as high-level as Condos and Houses, for data and our debates alike.

    So much data, and no one correct analysis available. Never granular enough. This is where anecdotal data/observations can be so useful… because at the end of the day if you had to sell your house, comps are obviously used as a base to establish a fair market value. Here’s a few of my recent anecdotal observations:

    1. In my neighbourhood, practically no houses have been selling (I can think of 5 all summer), but at the same time, nothing has sold for significantly less than it would have earlier in 2017. I thought maybe one buyer got a good price, maybe 10% less than in a frenzy. But overall, both buyers and sellers are waiting. A few houses have been on the market literally all summer… no list price decreases.

    2. One thing that did sell recently, and sold FAST, was a detached bungalow on a great street, sold at list price, which was a strong price. Is this because a bungalow on this street is an automatic “add value” opportunity? I think it is. Gives some buffer for any uncertainty.

    3. There are currently 10 houses for sale from Parkside-to-Dufferin / Bloor-to-King (not my neighbourhood, fyi). That is a large area. 10 houses, as at Sept 7th i.e. start of the “fall market”. That’s not a lot of houses. To be fair, however, they are expensive… so are there enough buyers with that kind of buying power who want to use it exactly right there in that area?

    I think the jury is still out and that the market is in a delicate phase right now and it will depend on how a lot of other things pan out.

    1. Could Get Worse

      at 4:04 pm

      Sure Kramer. It’s a delicate phase right now. Soft landing. If you bought the average home back in April for $1,578,542 ($1,634,633 inclusive of land transfer taxes), today that home’s worth $1,191,052 – for a loss of more than $100,000 per month. Welcome to Realtor World! Just buy and buy, it’s go up and up. Sure. The decline in that property would be stunning – 28.1%, and things continue to deteriorate with B20, more rate hikes, chinese capital controls and the fear of another war. Ok, that’s delicate. How do you think things will pan out with your family who backed you on the purchase?

      Love to see the data? Here it is:

      Still need more data, find a realtor and go get a room.

      1. Kyle

        at 4:26 pm


        Someone who clearly doesn’t understand how average prices are calculated.

        1. Hello

          at 5:37 pm

          Kyle, I took a look at the data links. Did you? Did you see the median price? If we take the median price differential ($1,285,000 – 905,000) which better accounts for data skewing, that’s still a drop of $76,000 per month since April. Unless you are a corporate executive, a doctor, or an established realtor, that’s a lot of money! It’s a lot of money to me for sure. The average Torontonian family income is about $68,000 (before taxes). Kyle, we should think twice before being stubbornly bullish all the time. Please stop misleading people that all is still rosy and under control. Accept the truth that the market has shifted and things might fall much more due to events in the pipeline. It’s really time to sell and not to buy. First one to sell will be better off. No one wants to be caught being the last person selling (assuming one has to sell for other life reasons). There has been tremendous gains over the years and selling now still captures those solid and respectable capital gains. Don’t be greedy, make the hard decision now. (Don’t worry if you’re a realtor, you’ll still make money if you are established and have a following. The commissions will always be there for you.)

          1. Kyle

            at 8:44 pm

            First, it doesn’t matter whether you use mean or median. Changes in an average DO NOT mean every single sample in the population has followed the same path. This is basic math.

            Second it makes no sense to compare April to August, unless of course you are a seeking to confirm your own bias (which is obviously why bears keep doing it). No one, no matter how bullish they are has ever said 30% Y/Y gains was sustainable. April was clearly an anomoly. Not to mention that the market falls EVERY year from April to August. The only relevant measure for price changes when talking about real estate is Y/Y, which is UP 3%. Clearly a cooling relative to the previous torrid pace of 30%, but make no mistake, only a bloody fool would actually think home owners lost 20% of their equity. People used to make similar comparisons about Vancouver every month after they put in their FBT, “look how far it is off the peak”. That is of course until prices reached a new peak…

            Third, unless you have come back from the future and know for certain that prices will continue falling, than you should not be stubbornly bearish, and stop misleading people with your fear mongering. And for the love of God YOU SHOULD ABSOLUTELY NOT BE TELLING PEOPLE TO SELL THEIR HOUSES!

            And finally fourth. If all can do is try to dismiss as a Realtor (which i am not), rather than actually counter any of my arguments with any form of substance than it’s obvious you actually have no arguments to support your view.

          2. Kramer

            at 8:57 pm

            I can’t believe I’m doing this…

            I compiled this out of the TREB numbers.

            Detached Houses
            # of Sales by Price Range
            Apr ’17 Aug ’17 % change
            Less than $700,000 914 851 -7%
            700000 to 799999 650 370 -43%
            800000 to 899999 707 332 -53%
            900000 to 999999 584 227 -61%
            1000000 to 1249999 940 323 -66%
            1250000 to 1499999 665 205 -69%
            1500000 to 1749999 431 99 -77%
            1750000 to 1999999 245 59 -76%
            Greater than $2,000,000 579 112 -81%

            I grouped all the categories under $700,000 into the one “Less than $700,000” category because breaking it out below that is not relevant and this is cleaner.

            1. Do you see a trend here? Since April, the higher-end the detached house, the greater the decline in number of sales.
            2. This change in distribution between price ranges has a massive impact on the average price for this segment.
            3. The impact in this change in distribution can be isolated by using the mid-point for each price range in a total weighted average.
            4. The impact of the distribution change alone represents almost the ENTIRE decrease in the Average Price for this segment.

            Are we catching on yet? Need me to go deeper?

            You CAN NOT look at the % change in Average Price for the entire detached home segment and say that every individual detached house in the market has changed by that %.

            YOU CAN NOT.


          3. Kramer

            at 9:02 pm

            Sorry it didn’t allow all my nice spacing in the table to take. But the data is there.

          4. Kramer

            at 9:06 pm

            “Only a bloody fool would actually think home owners lost 20% of their equity.”


            And yes, can we dispel the whole idea that anyone who thinks the market will go back up is a real estate agent? It’s tacky… and a shortcut to thinking.

          5. Kramer

            at 9:26 pm

            To lay it on really thick one more time for those who are not catching on…

            If the average price for the Detached House Segment went down by 20% from April to August, then the ONLY way you can mathematically say that EVERY house in the segment went down by 20% is if EVERY house in the segment sold in April and then EVERY house in the segment sold again in August.

            This is obviously not the case, so you need to go deeper, and when you do, the data is there and the trend is clear.

            This same mathematical logic can be applied to the total market average (all segments combined) and all of the other segments.

            I am not saying that the market hasn’t changed, or that the market hasn’t softened. But you absolutely CAN NOT say that someone who bought a house in April has lost 20% of the house’s value based on any of the data released. You have to go as granular as possible to see how your property’s value has changed… which is why I brought up the anecdotal observations within my own neighbourhood which one can track and observe in detail.

  32. lui

    at 4:51 pm

    Higher interest rates will slow the sale of current supply of homes and condos.Not many people would qualify for a $800,000+ house but many will qualify for a $450,000 condo.I seen houses in my area sit for months of the MLS and the home owner would not reduce price.I still see a strong support for condo pricing but weakness in houses is showing.It’s a matter of time sellers would need to lower their expectations for their asking price.I recently rented out one of my condos at market price and I got so many offers to rent I took the one that was willing to pay a full year up front.I never even requested it but she was so burnt out looking for a decent condo she made that offer.Of course she had a stellar credit rating.I even waived the no pets allowed when I seen how small and well trained the dog was.

    1. lui

      at 5:38 pm

      Amazon is not high salary jobs.More like retail wages so about $13-15 an hour.

      1. Kramer

        at 9:53 pm

        According to the RFP, employees hired to work in HQ2 will make an average salary of US$100,000.

    2. Hello

      at 5:44 pm

      That will likely impact the demand for condominiums. High tech workers generally prefer the portable component style living. Nothing wrong with that. Good for TO.

  33. Kyle

    at 9:09 pm

    Precisely, the drop is mostly about C…O…M…P…O…S….I…T…I…O…N!

    1. Kramer

      at 9:47 pm


      So where do we go from here?

      The question is will the sales in the fall shift back toward a similar composition weighting as earlier in the year? If it does (at all), that alone will increase all these “Average Price” metrics, overall and within segments.

      I think David tapped in one-footer by saying that “Average Prices” will go up this fall. All that needs to happen is that buyers of more expensive segments come out of summer hiding and shift the composition… which always happens after EVERY summer.

      Will that even mean that YOUR individual house price has gone up? Not necessarily. You always need to look deeper.

      If you want to know how much % equity someone has lost on their home this summer… look at comps. If an identical house on the same street sold for 20% less than in April… then yah, that’s a 20% hurt.

      See all you haters, Kyle and I aren’t even bulls… we’re just seekers of the truth.

      1. Chris

        at 9:35 am

        Kyle and Kramer,

        I agree with you to an extent; composition has adjusted, which has impacted average price.

        But, in my opinion, the drop in average price is not entirely or even mostly attributable to composition; the market has softened, as we can see by price, sales volume, listing numbers, market sentiment, etc. Discerning just how much is composition vs. actual price changes is difficult, but certainly we can agree that both are playing a consequential role.

        While it’s not perfect, I do think the Zolo HPI can offer some insight into the way the market is moving, while eliminating some of the noise that comes from changing composition:

        (scroll all the way down, click price type HPI)

        Kramer, you’re not all that bullish. Kyle definitely is though. Not meant as an insult, I’m certainly more bearish at current valuations, and I’m ok to wear that label.

        1. Kyle

          at 10:06 am

          Both Kramer and I have clearly acknowledged there has been some cooling in prices, whether they have actually reversed and by how much though is not distinguishable by looking at average price from Apr to Aug. There are a bunch of factors in there, Composition changes, seasonality, etc. So the exact market cooling quantum is debatable, but what is not debatable (and i think we all agree on), is that a 20% dop in average price does not translate into a -20% hit for each home owner. And that’s what I (and Kramer) are taking issue with. To claim such nonsense is flat out misleading misinformation.

          I’m pretty much indifferent to labels, so feel free to call me a bull, if you like. If i am being honest, the market has always outperformed my predictions/expectations, so the reality is i am not bullish enough.

          1. Chris

            at 10:21 am

            For sure; I would definitely agree with you, to extrapolate and say “average price has declined 20%, therfore your individual home is worth 20% less” is wrong, and a misinterpretation of the statistics. There are far too many confounding variables per home (size, type, location, updates, etc.) to make a blanket statement like that.

            I’m ok with the labels as well, and as I said, I’m fine with being pegged as a bear, just as I always figured you were fine with being labelled a bull. I’m sure one day I’ll become bullish on real estate, but at current valuations, supporting fundamentals, and potential headwinds, I’m just not there. It’s no different from a stock that I view optimistically or pessimistically, depending on price and predictions for future returns.

          2. Kramer

            at 10:49 am

            Well at least we agree on something ! That’s a start!

            Although a blog without epic Chris vs Kyle debates is not a blog I want to visit, so don’t get too friendly. Now shake hands and go back to war!

          3. Chris

            at 10:57 am

            Haha oh I’m sure Kyle and I will still have good debates, which I am always happy to do, as I enjoy them greatly.

            I’m just trying to keep it civil. Both of us have had some less-than-courteous posts in the past when we get frustrated. But I don’t want to expend my energy or time on internet name-calling (as I’m sure Kyle doesn’t either).

          4. Kyle

            at 11:22 am

            I also don’t care for the nastiness, but i will basically respond in kind and i will call out BS when i see it. Other than that i’m happy to debate.

          5. Kramer

            at 11:29 am

            Same here… and I tend to save my nastiness for calling out hypocrites, of which you are not one, Chris.

  34. Kyle

    at 10:29 pm

    Hmmm, this sounds strangely familiar…

    “During the summer slump, Mr. Pasalis was bracing for a massive increase in listings in the fall. Now his instincts are telling him that may not happen. Activity has been ramping up in the past couple of weeks, as it typically does when fall approaches, he says.

    Home stagers and inspectors are busy but he does not sense that they are more frantic than they were at this time last year.

    Mr. Pasalis says homeowners who were thinking about selling may have decided to wait until prices strengthen or until the spring, which is typically the most favourable time for sellers. “Maybe they’re going to just hit pause on their sale.”

    1. Kramer

      at 10:40 pm

      I think you and I essentially wrote that entire article in pieces on this message board.

      “But trends vary by region and segment. Above $4-million, for example, few properties are changing hands, while the segment between $1.5-million and $2.5-million is very active in desirable Toronto neighbourhoods.”

      “In the 416 area code, sellers are less fazed, he says. “Prices have softened a little bit for sure, but sellers down here are not as anxious.”

      “But if condo prices keep rising at a fast clip while detached and semi-detached house prices flatten, eventually some buyers will veer back towards the single family market, he predicts..”They can only diverge for so long,” Mr. Pasalis says.”

      But Mr. Bibby says the sale prices are within striking distance of those in the spring for the most part. “If the sellers really dig their heels in, they’re getting their price.”

      “Some of the most outrageous bids in the spring aren’t being matched today, but those were the rarities, he adds. “Those never should have happened, in my opinion. Everyone was shocked.” (<<<<< these are the buyers who have seen some real hurt.)

      1. Kyle

        at 10:51 pm

        So true! But apparently anything that bears don’t agree with is automatically nullified if associated with a Realtor.

        1. Kramer

          at 11:03 pm

          I know that at least one of them is trying to support and shine their brilliant decision to exit real estate in December.

          I sold my rental property last September (for overall portfolio reasons, I wasn’t trying to call a top of the market)… I’m not going to let that bias my opinion going forward. There’s a term for that in investing. Something to do with never changing your outlook regardless of any new information… whatever it’s called, it’s bad.

  35. Hello

    at 12:44 am

    Mr Kyle and Mr Kramer, you seem like noble people. I believe your intent is honest. You sincerely do believe the market has not suffered much. However, I would like to point out that you omitted to state the most obvious point. The trend is still downward! Yes, DOWNWARDS. Perhaps not as much as 20% on the higher detached home, but a child can tell the curve has shifted to the left. It is an abrupt but systematic shift. From Mr Kramer’s published TREB statistics (September 7, 2017 at 8:57 pm — thank you), I agree the curve is left skewed but remember there is a practical bottom line that even a lowest end detached home will not fall below.

    Unless we want to rewrite the laws of supply and demand, the higher end homes that need to sell will eventually have to drop the price to sell. This will happen at least for the proportion of supply which is attributable to the natural level of attrition in the market. There is always natural turnover or attrition in any market. Causal factors include job relocation, downsizing or smart sizing, or for domestic events like a divorce. The sellers of higher end homes would naturally try to hold out from selling early in the shift because of the perceived nominal dollar differential. But sell they will if they need to sell.

    Mr Kyle and Mr Kramer, both of you seem to have so much passion for defending the realtor and advocate there in the status quo there nothing is really wrong, I cannot but confuse you for one of them professionals or people being closely related to the well-being of one. Whatever you do, I concluded that you definitely have a stake in the real estate-industrial complex. I am sorry if I made a false conclusion.

    Non-realtors such as myself don’t really have to sway anyone to sell as a good number of shrewd agents, right at this moment, are quietly advising their private client to unload and unload before others do. Similar to a zero sum game, on the surface, their shrewdness would include telling others otherwise.

    On anecdotal corroborative observation alone, I noticed some 10 more homes went on sale this week in my area (I live just north of Rosedale). The list price is lower. One of them sold over the weekend for about $1.2M, with 5 or 6 offers received, and went over asking by about $120,000. However, the final firm price was noticeable less than something that would go some 5-10 months ago. So yes, in my area, the price has gone down. Maybe not 20% but certainly well over 10%.

    More stressing is the fact that there are events down the road (B20, interest rate increases, war, foreign capital flow cessation, etc) which will most likely cause the price (average, median or curve shift — however you want to put it) to go down. You omitted to highlight these relevant and substantive events to your readers. You seem to be inclined to underplay or refute these important factors, As if you almost want to point out that the price decline is a conspiracy theorist’s invented illusion. I am confident, as many others here, including some realtors, that the fall is real. At this point, if we have something we want to divest, than let’s do it quickly while avoid the intellectual denial and muddling.

    1. Kramer

      at 7:23 am

      I believe I speak for Kyle and myself when I wrote:

      “I am not saying that the market hasn’t changed, or that the market hasn’t softened. But you absolutely CAN NOT say that someone who bought a house in April has lost 20% of the house’s value based on any of the data released. You have to go as granular as possible to see how your property’s value has changed”

      I don’t expect you to have caught every point written in those countless and massive rants, but I did want to highlight this one so you know that I do see the market has changed and softened. We were really trying to aggressively refute one poster who assumed that every individual house has gone down by the average decrease. It’s important to, at the very least, be clear on that point before jumping into debate. It seems like many don’t understand the numbers or just copy and paste links or pre-made charts without digging in even a little bit.

      1. Pundit

        at 7:46 am

        Unbelievable!!! (The ‘bulls’ here I mean)

        Who appointed brothers kyle and Kramer (same person?) to be guardians of the ‘real estate industrial complex’?

        Who do they think the are??? (I. E. “Aggressively refute one poster …”)

        Market has gone way down. The low volume is insane and prices has plummeted!!! FACT. Consensus is it will go down further till 2018 close. K brothers these guys better stop misleading!

        1. Kramer

          at 8:39 am

          Ok I give up. you’re all right.

          Everyone’s house is worth 30% less and it doesn’t matter vs what. This is a crash, so everyone is completely screwed. Everyone is underwater on their mortgage, even those who have owned their houses for 30 years and have no mortgage.

          The market is going to keep dropping 30% every 4 months, and with no reason for it to stop, it will eventually hit zero.

          All homeowners will be bankrupt and all renters will finally have their moment to laugh as they will be able to buy furnished houses with $20k in savings which will now represent a 100% down payment + cover land transfer taxes of $0, and Starbucks and avocado toast for 12 months.

          Every Canadian corporate headquarters will close up shop and centralize out of the US because Trump is making America great again. Toronto will look to Detroit for strategies on how to recover.

          1. Pundit

            at 9:12 am

            Riiight. Stop exaaaaagerating. You were pumping and now you’re dumping. We ain’t fools. Not 30% a month (you sarcast knee jerker) but certainly lower than now. No one can tell the bottom but you ain’t right for telling everyone that things are chill and that 20% drop don’t mean anything. Things are bad you know , low volume, commis sion cuts etc.

            Don’t like your amercian example. Ifseller doesn’t need to sell, no one goes bankrupt on your silly example. If seller is heavy in debt like most people in this country , they could need to sell or bust bankrupt anyways. It’s that simple.

            Realtor myself for 10 plus years. We have ethics you know. Everyone in the offices is a bit shaky theses days. Less golfing. More hustling to pay those bills.

            Now k brothers, get real. Get a life.

          2. Kyle

            at 9:48 am

            @ Pundit

            Things are not “bad” for the market, maybe they are bad for you as a Realtor who needs volume and a full commission. Sucks to be you, i guess.

            As far as prices go, portions of the market are in a buyer-seller stand off, and the Yahoo premium from Spring has disappeared, but there is NO evidence that prices are crashing.

            Now you go get a life and start hustling, and stop confusing your lack of volume woes for market price woes, so you can serve your clients better.

          1. Pundit

            at 9:49 am

            K bro, you catholic? Faces of jesus and mary is nothin new. Cat churchs been chiming those and eucharystic miracles for a loooong long time. Ever heard seek and ye shall find? Too bad you intellects and media types finally notice it now.. now what s that go to do with Fallin prices and you being a house industry pumper?

          2. Kyle

            at 10:15 am

            You silly bears see market crashes everywhere you turn, the same way delusional zealots see Jesus in everything…

          3. Pundit

            at 10:39 am

            Careful bro k. The Father IS watchin. Watch your tongue.

            (Please forgive him Father for he does not know)

  36. Kyle

    at 9:26 am


    Clearly Robert Hogue, Chief Economist for RBC is also side-hustling as a Realtor.

    I never said Toronto prices haven’t cooled, they were going up 30% y/y, and now they’re only going up 3% y/y. So clearly they have. But like Robert Hogue above, i am saying that i expect Toronto to experience a Vancouver like recovery.

    As for the rest of your comment, let me just say two things:

    1. I am not defending the market, i am telling it like it actually is, not like how i wish it would be. This is why unlike you, i can support all my arguments. And by the way barfing up a random bunch of hypothetical risks is not making an argument. Try actually discussing the probability of those risks occuring, and quantifying the size of those risks and the markets sensitivities to them. If you can do that, i’ll happily shred them to confetti, but otherwise i will not waste my time responding to them. Because it is nothing more than fear mongering

    2. This notion that anyone who doesn’t think RE will crash must be a Realtor or related to a Realtor is just so stupid and naive. It exhibits a 3 year old’s lack of understanding of how the world actually works. Stop and think about it for a second. A successful Realtors’ greatest asset is his/her reputation, and market knowledge. What do you think happens to those assets if he/she falsely and publicly pumps up the market? Bottom line: a successful Realtor has nothing to gain and lots to lose by trying to convince the market that it is rising when it is crashing. So please stop with these moronic accusations, they only make you look dumb. If you can’t rebut without making accusations, then just put away the keyboard.

    1. Pundit

      at 10:10 am

      Not sure we care what rbc thnks. Heard of difference in opinion or politicized empathy? Hogue is trying to keep the market calm. SCotIA, td beg to differ. IMHO, rbc is a snobbish ‘premium’ bank. They were big time wrong last year on the drop and they likely wrong now. Go google their comments / outlooka from previous years. So yeah k bro, go listen to rob preach some more. You smart and educated man and smarter than ye think.

      1. Kyle

        at 10:24 am

        P Brah

        As i’ve always maintained, everyone is entitled to place however much weight they want on whomever’s opinions they like. I personally don’t presume someone is right or wrong, until i actually consider the substance of what they are saying.

        Time will tell who is right, not which bank the guy works for.

  37. Pundit

    at 12:48 am

    Sorry. That kid reporter tencer from huff post is a known house pusher.

    Bmo little baby blue bank is not known for their track record for accurate predictions. Everyone knows that. (It’s got a lower p/e price ratio too compared to peers. ) It s better to go gic than listen to them advice.

    Warning to all: dont listen to these ‘professional’ bulls (no pun intended) in dixieland standing guard here within these comments. But Dave fleming is cool though . Want real advice, go alter news. .. Garth turner …

    I conjecture bros kyle and Kramer is same person with multiple aliases. K Bros house pushing and defending the bust. (These guys are planted maybe?) So this blog comment section’s rigged. I’m out. My last post. Bye all.

    1. Kramer

      at 8:20 am

      Not one person with two names. Just two guys who are willing to look beyond the headlines and ask questions.

      When a market needs to be savagely beaten into submission by governing bodies, it’s wise to look deeper, ask why, and not just scream “crash”.

      1. Pundit

        at 12:33 pm

        I never ever said ‘crash’… now don’t put words in my mouth

        And stop insulting realtors .. many of us are honest

        1. Kramer

          at 12:52 pm

          I think you have the wrong guy! I have never once in hundreds of posts on here insulted realtors as a group.

          I have certainly been ‘accused’ of being a realtor (a few times)… but I have never insulted them!

      2. Iui

        at 1:16 pm

        Interesting. I also think Kyle = Kramer = same person. Both know economics.Both dogs of this blog.

    2. 1st Post

      at 5:35 pm

      Hola — 189 responses!!! This is my first post ever. Thought I’d jump in after reading the ranting and debating.

      Two posters KYLE and KRAMER same guy? Hahaha! Not so cool. This explains how they seems to ‘dance’ around a topic as if they are a bosom buddies and somehow conclude to mutually ‘agree’ on something. Very assertive if not aggressive and they seem ‘religiously’ attached to this ‘real estate’ blog. (Hey, they even attack Jesus followers but what’s wrong with pictures of Jesus?). I wonder what other alias kyle/kramer/he/she/it is using? Who knows what his/her/its motivation is behind this act? Probably owns a bunch of properties and trying to hold the market back a bit until they have a chance to sell. This forum should start using Facebook login for identities.

      I agree with the other posters here that the market is falling a bit or actually more than a bit (and probably reveal to be much more when the Teranet / National Bank index is released 3 months away for the numbers for August). Word on the street is saying this past week’s deals are being accepted more deeply below asking price. Some panic? Time will tell.

      Was not mentioned by any poster was the fact that a bunch spec type owners with not enough equity and large heloc balances could be ‘margin-called’ by their bank when their mortgage needs to be renewed. This could cause more domino effect.


      1. Kyle

        at 6:48 pm

        David could easily confirm that Kramer and i are different posters, via IP addresses. But if conspiracy theories are all you have to cling to, you’ll probably just accuse him of being in it.

        At the end of the day, if Kyle/Kramer/Appraiser and whoever else you want to lump in there is just one person posting the bull side under different names, you guys really should be embarrassed that all of you combined still can’t come up with any decent arguments to counter this one guy.

        1. Kramer

          at 11:38 pm


          Yah, We’re not the same guy.

          Sorry to burst your bubble bears! Hey-ooooooh.

        1. Kyle

          at 3:41 pm

          Believing in Jesus is one thing, believing that he is sending you a selfie in the form of burnt toast is another.

          1. Foreigner

            at 11:09 pm

            Kyle — You should stay away from contentious remarks on a public forum. Don’t use J examples to exemplify silliness in any forum poster’s position – especially if you know little or almost nothing about J. For many out there, indeed they can see J in many more things including toast — nothing wrong with that. For yourself, you obviously cannot see much but yet you have so much faith in the market, enough to be bullish when there is good reason not to be, but there is nothing wrong with that either (well almost nothing).

            I want to leave you with one thought: Oblivion is a long time

          2. Kyle

            at 9:11 am

            “I want to leave you with one thought: Oblivion is a long time”

            Given that you bears have been wrong for over a decade, i take it say you speak from personal experience.

          3. Iui

            at 10:32 am

            People are not simple bear or bull.There is time for everything. It is not binary decision. Bear or bull, the market is going down.Time to sell.

  38. Hello

    at 10:47 am

    Pundit, we appreciate the warning and heads-up but I think most of us already figured that out. Some real estate industry propaganda plants here — this is kind of revealing of what is at stake for the real esate industry complex here in Toronto.

    It looks like things are continuing a downward descent no doubt. There is still a storm ahead of us. (B20, higher c$, hikes, etc)

    Note: this site has been generating stats on a monthly basis for many years now. It is owned by a respectable realtor. I don’t think he or she is a market manipulator since the charts are consistent and auto-generated from TREB data.

    This is my last post too. Been interesting reading. I learn a lot from this thread. (Definitely, watch out folks. Beware of the media! Beware of the manipulators!!)

    1. Kyle

      at 9:00 am

      “Some real estate industry propaganda plants here ”

      This line brings new meaning to delusional. Anyone who has followed this blog for a while, will know I’ve also commented on taxes, government, architecture, zoning, TTC, politics. Using your logic, i am also being Paid off to write about those subjects too. When your only remaining explanation or argument is to claim conspiracy theory, then you really should be challenging your own view point.

      1. Foreigner

        at 7:41 am

        “Plausible deniability.”

        Agree with Hello and Pundit. Market experiencing structural slowdown and sales and prices falling further.

        Reader beware — posters Kyle, Kramer and a few others here have displayed unbridled optimism.

  39. Bob

    at 4:37 pm

    Hi David, would you be able to add an update to your post with August TREB numbers? I think that will answer a lot of questions for us!

    1. Happy Market Crash!

      at 7:43 am

      All industry stats and indexes show a 5 month downward trend:

      Even the” trailing” (heavily realtor biased) MLS HPI and Teranet indicators shows downwards:

      It’s going to fall some more.

      Advice to speculators: SELL!!!! SELL SELL. Sell before the prices go down more. This is your last chance.

    2. Bob

      at 11:27 am

      August number was $732,292, which is about $7,300 off what David predicted.

      1. Kramer

        at 4:20 pm

        Advice to speculators: Don’t speculate. Invest.

        If you don’t know the difference between speculating and investing, read “The Intelligent Investor”.

  40. Richard Morrison

    at 10:09 pm

    I am still baffled with the property market in north vancouver ( ) in comparison with toronto. Also, with the amount of money being printed now due to Covid19, these property markets in Canada will make it impossible for homeowners to qualify even for a simple condo.

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