I no sooner wrote my last blog about a lack of balanced reporting in the media, and RBC came out with its Current Analysis Report on July 23rd, debunking the myth of a real estate bubble in Toronto’s condominium market. This report places a fresh perspective on our condo market, which is doing very well!
I have been saying for a long time that the factors that drive home sales in Toronto and its surroundings are as strong as ever, and the RBC report validates that. Robert Hogue, a senior economist at RBC, cited our condominium market picking up the slack from the lack of new low-rise housing in the GTA. In addition, condominiums satisfy the intensification required by Ontario’s Places to Grow plan.
Our GTA demographic situation is also conducive to success. The GTA’s population growth averages out at 100,000 per year, and Toronto is one of the world’s fastest-growing cities. According to the report, the total number of new housing units of all type completed by builders has not exceeded these demographic requirements.
The report also debunks the idea that investors are having a negative impact on the market. Most of these individuals place their suites into the rental pool to generate income, which helps to address the very low rental unit availability in the GTA. And in the report, RBC reminds us that investors and the small percentage of those who buy on speculation help condo projects reach the sales points that make construction financing feasible!
Again, it’s a matter of perspective. The basic elements of our economic strength, success and stability are still firmly in place. Welcome to the new reality – a normal market!
To read the RBC report, visit www.rbc.com/economics/market/pdf/torontocondo.pdf