Corinne McCabe , Broker

Canadians are changing provinces at the fastest rate since the 90’s real estate bubble. Canadians haven’t fled their province in such a large volume in over three decades. Interprovincial migration reached 123,500 people in Q2 2021. This is an increase of 55.1% from the previous quarter, and the largest migration since Q3 1991. That was smack in the middle of the last affordability crisis, and the end of the early 1990s real estate bubble. Migration and quality of life improvements tend to go hand in hand. 

Ontario was by far the biggest loser, with many more people leaving than arriving. Net migration was -11,857 people in Q2 2021. It was the largest outflow for the province since the early 1980s. Other provinces also saw substantial outflows, but not nearly as big as Ontario. Big losses were seen in Alberta (-5,447), Manitoba (-3,513), and Saskatchewan (-3,362). Since it’s interprovincial migration, one province’s loss is another’s gain. British Columbia was the biggest winner, with net migration reaching 15,300 people in Q2 2021. Both Nova Scotia (4,700), and New Brunswick (2,100) also saw substantial gains. Life on the coasts must be appealing. The other provinces made minor increases, PEI (869), Newfoundland (806), and Quebec (626).

This migration reveals a lot about the province from the perspective of the people that live there. Provinces with big gains strike the right balance of local retention and attractiveness. Affordability was a major factor for people looking to move. These provinces are winning people over with a better quality of life.

Even though Ontario lost a number of people this year, immigration to Canada’s largest province, Ontario, welcomed nearly 83,000 newcomers in 2020. Ontario’s share of all immigration to Canada remained unchanged compared to 2019, with the province welcoming 45 per cent of the country’s newcomers. In 2019, 62% of immigrants indicated they would settle in Ontario. A variety of factors suggest that Ontario should see a significant recovery in its permanent residence status of new comers this year.

Bosley Real Estate Ltd. is a full-service boutique brokerage operating in Toronto, Muskoka, Niagara-on-the-Lake, Port Hope, Cambridge, and Thornbury Ontario since 1928. We have three centrally located offices in Toronto and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.

Condominium markets in some of Canada’s biggest cities have strongly rebounded this year, and analysts say the market could once again return to pre-pandemic red-hot conditions as rental demand surges and inventory is shrinking. 

The condo market, which had been hot for years, cooled quickly last year during the pandemic as investors fled, spooked by the exodus of renters from cities to live with families or find cheaper places elsewhere. Short-term rental demand dried up and first-time buyers flocked to the suburbs and smaller towns to work from home.

This year, the rental market is rebounding on the prospect of white-collar employees and students returning to offices and universities and a strong bounce back in immigration. Younger buyers are also returning to condos after prices for bigger homes surged during the pandemic. 

“Market confidence has rebounded very quickly,” particularly in Toronto’s downtown core, said Shaun Hildebrand, president of Toronto real estate research firm Urbanation.

In the second quarter, the downtown market made up the highest proportion of Greater Toronto Area condo resales in a decade, which “speaks to a renewed level of confidence, not only in the condo market generally, but more specifically in the downtown market,” Mr. Hildebrand said. 

About 12,700 condos sold across the GTA from January to April, surpassing the 10,300 transactions ahead of the previous market peak in 2017. And while they fell following a March high, they remained 15 per cent higher than pre-pandemic levels. The average price per square foot for a resale condo in Toronto is $1,066 and for new construction condos its $1,104 per square foot.

Shrinking available supply is further boosting the condo sales market. Construction started on about 1,143 apartment and condo units in June in the Toronto area, down over a third from a year ago and almost half the level of two years ago. And while ongoing construction of condos was at a record 86,149 units in the second quarter, about 92 per cent of these were already pre-sold. The pullback in demand last year, combined with scarcity of land downtown, has dampened the launch of new projects, Mr. Hildebrand said. 

“Developers are somewhat reactionary,” he said. “Now that demand for downtown condos has returned, we will see more condos launching.”

Is the real estate market slowing down? We are getting asked that question a lot these days. A summer slowdown is normal for the real estate market as we transition from the intensity of the spring market into the summer market, and this shift happens almost every year. Last year was different because we experienced the spring market in June and July because of the pandemic lockdown.

It’s still a seller’s market. There are still plenty of buyers out there and demand still outweighs supply. But we are seeing diversions, now that a majority of the population is vaccinated and buyer’s attention is focused on trips, events, and visiting friends and family rather than solely on their home search.

Homeowners planning to sell should not worry that the bottom is falling out of the market, but expectations should change compared to previous months. Here’s what the shift might look like:

• Fewer total offers on competitive homes

• Fewer properties selling within the first week

• Fewer homes being listed for sale

• Buyers being able to negotiate a better deal

• Less extreme price escalations

• Listing your home at market value – if you had an offer date set intentionally listing low and were hoping for a bidding war and you didn’t get what you hoped for, then re-listing at market value might be the right strategy

As markets stabilize and demand begins to moderate – something that was signalled in the data for May – one of the greatest challenges for agents in their role as trusted advisor is identifying those expectations and realigning them. Agents who play the long game will attest to the benefit of educating their clients with real time data to manage expectations upfront, over dealing with disappointment and frustration down the road. 

The more interesting trend we have been seeing is a month-over-month decline in home sales since the peak reached in March. March to May is typically a period when home sales are increasing from one month to the next, but the effects that COVID-19 has had on the real estate market continue to distort the traditional seasonal trends in the market. The average house price in May was $1,312,334 while the median was $1,140,000, up 32% and 33% respectively over last year. 

There has been some cooling over the previous month, and a slight shift away from a tight seller’s market to a more balanced model was likely to emerge. Nobody ever thought that this frenzy could continue at this pace. A balanced market can make for great buying opportunities, especially for first time buyers.

Bosley Real Estate Ltd. is a full-service boutique brokerage operating in Toronto, Muskoka, Niagara-on-the-Lake, Port Hope and Cambridge, Ontario since 1928. We have three centrally located offices in Toronto and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.