Toronto’s real estate market may have had its “Wile E. Coyote moment”—that dawning realization that you’re headed for painful catastrophe and there’s nothing you can do to stop it.
That’s at least how Capital Economics economist David Madani has been interpreting the industry as of late.
With new condo sales dropping to record lows, it’s become clear that the Toronto market is cooling off. Opinions are divided, though, as to whether the latest numbers are signs of an impending housing crash long feared by Canadian finance leaders.
According to a report by RealNet Canada Inc., the number of new condos sold in the Greater Toronto Area in August 2013 sat at 633, an 18% drop year over year from sales of 777 in August 2012. RealNet’s data indicated that it’s the poorest August showing for new condos in a decade. Sales of high rise dwellings have dropped over 30% year over year from an eight-month period between January and August 2013, in comparison to the same time frame in 2012.
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In sum, this is a short term issue, said Alexander.
“I don’t think it signals a major problem in the GTA real estate market or economy. I think it’s something that will be addressed, because over time there is going to be a demand for all of these condo dwellings,” he added.
“That doesn’t preclude the possibility that you get a correction in the short run, [but] even if we were to have a modest correction… I don’t actually think it would threaten the GTA economy let alone the Canadian economy as a whole.”
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