If you have been following my Insight Article posts, you will recall that I have talked a lot about the media’s attention-grabbing headlines. Despite their real motives of selling ads to advertisers in exchange for eyeballs (or in other words, readership), the media always has some kind of ability to sway the general public. This was true with the US elections and remains true for many other nations with political activity as well. It wouldn’t shock me if the media will play a big role in how we perceive our candidates in the upcoming Federal election.
So Why Is This Important? Well, we have 2 positive news from 2 different media outlets. The first and most obvious one is the numbers that came out for May 2019. In the month of May, we saw the largest growth in transactions over the past 2 years (up 19%). Keep in mind though, that up 19% translates to only 9,989 transactions which is still below the 10 year average. However, that doesn’t stop the media from writing about how the market is back and in full swing. For a deeper dive into this month’s stats, make sure you tune into the Market Watch for June (for May stats) by clicking on this link: CLICK HERE
News Correlations – Having a 19% increase in transactions is just the start. The second piece of news comes to us from HuffPost. The increase in buyer’s confidence could be attributable to HuffPost’s latest article, “Toronto Is The Fastest-Growing City In U.S., And That’s Not Good”. This article features 2 nice charts that seem to be shared everywhere now. I have provided them below for your reference:
Truth in Numbers – It doesn’t matter which photo you look at, and no matter how you slice it, it’s pretty obvious that Toronto is outpacing other major North American cities in terms of population growth. I’ve been preaching for a long long time now that we have a serious supply issue with all of the immigration coming into the city. Here are some further stats, based on the 2 graphs above.
The Great Migration – The red bar graph is the massive immigration that has made its way into Toronto from July 2017 to July 2018. To put things into perspective, we only had about 18,000 unit completions last year in all of the GTA. Clearly, there is a supply issue if you ask me. Then if you look at the purple bar graph to the right, there’s been an absurd number of people who have flocked to the Greater Toronto Area – 125K immigrants in a year’s time! Again, I’ll repeat the number of unit completions last year: 18,000!
So if that’s the case, and in order to fit 125K people into 18,000 units, that would mean 7 people in each unit… imagine that! That’s clearly not going to be the case but that paints the supply issue picture for you quite clearly.
With HuffPost writing about what we, as investors, already know as the obvious (the population increase), do you believe that buyer confidence is coming back? There hasn’t been any indication of the population increase slowing down anytime soon. Oh, and here’s the kicker – with so much red tape for development, and despite the number of cranes you see in the sky, we have 15% less construction commencements this year than last.
The Wrap – This is why I’ve been so bullish on the downtown Toronto market as of late. I hate saying this, but if you really do hope to get into the market before prices go up even more, then you should definitely invest in real estate now before it becomes even more out of reach. Seize the opportunities as they come. Give the PPTO team a call today to discuss your options!