Video published on Instagram · 68,604 plays on Instagram · Transcript below
Takeaways
- No new Toronto condo buildings broke ground for about 20 months, so little new supply arrives after 2027.
- Prices follow supply and demand first, then interest rates and jobs.
- Holding through the gap is the bet Jim describes, not a promise.
Transcript
Transcribed from the video audio. Obvious transcription errors fixed where the intended word was certain; wording is Jim's.
I'm not going to sugarcoat for those who bought condos over the last four years pre-construction condos and who are now taking possession of them, it is tough times. It is really tough times because if you paid, you know, $1,400 or $1,500 a square foot four years ago and now the condo is coming due for occupancy and now the same condo only is going to sell for like $1,000 or $900 or maybe $1,100 a square foot optimistically, then that's a bad delta and it's a rough rough place to be.
But I will give you a little bit of okam on that because here's what's happening. As far as new buildings breaking ground, the last buildings to break ground in Toronto happened 20 months ago. When a condo is built, it takes a year to excavate and then it takes two to three years to finish the structure.
So that tells us that if the last buildings to break ground started almost two years ago, that over the next 24 months, those buildings will be complete. People will be taking occupancy and then what? What happens after 2027? Well, I'll tell you what happens. There will be no new condos coming to market in 2027, 2028, possibly 2029.
It might not be until 2030 that there is new condo stock. And so, you know, I guess the bet is or the hope I should say is that if you're holding on to your condo, if you can hold on for several years, then there could be a real change because real estate after all is all about one thing.
Well, two things, supply and demand, that's the biggest thing, and interest rates. So if supply and demand is favorable in that there's way more demand and not enough supply, that's always good for real estate. And if interest rates go down, that is also historically been very good for real estate.
And of course, that depends on employment being strong. So there's lots of variables. Nobody can predict the future. I certainly can't, but what I can report on is some of the trends that are going to shape the real estate market in Toronto over the next four years. If you need help with real estate, you send me a message.
I can help you personally as well.
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