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RESIDENTIAL AND COMMERCIAL MARKET UPDATE

Presented by:Jason Mercer, Matthew Boukall, and Ray Wong


MARKET UPDATE & CONSUMER INTENTIONS

GTA MARKET OUTLOOK AND CONSUMER INTENTIONS

JASON MERCERChief Market Analyst and Director of Service Channels,

Toronto Real Estate Board

SEAN SIMPSONVice President, Ipsos Public Affairs

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000

Econ

omic

Impa

ct

Source: Altus Group

Economic Impact of Each GTA Home Sale

$6.33$6.91

$7.72

$6.30

$5.28

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

2014 2015 2016 2017 2018

Billi

ons

Source: Altus Group; TREB Calculations

Estimated Average Spin-Off Expenditure Associated with TREB MLS® Sales

REALTORS’® Contribution to the Economy is Huge

142,000Related Jobs

$2.9 BillionIn Taxes

Professional Services: $33.6K

Renovations:$19.6K

Furniture/Appliances:$8.6K

General Household:$4.1K

Moving:$2.4K

58,095

67,467

74,533

78,675

83,213

83,831

82,947

92,856 74,502

86,979

85,862

89,109

85,506

87,049

92,781

101,213

113,040 92,264 77,341

0

20,000

40,000

60,000

80,000

100,000

120,000

Source: Toronto Real Estate Board

Annual TREB MLS® Sales

Guideline B-20 now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%.

Guideline B-20 now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%.

Insured, 27%

Uninsured, 73%

2017 Share of Canadian Mortgage Funds Advanced - Uninsured vs. Insured

0

1,000

2,000

3,000

4,000

5,000

6,000

Detached Semi-Detached Townhouse Condo Apartment

Source: Toronto Real Estate Board; Statistics Canada

OSFI Qualification vs. Average Mortgage Payment

Average Monthly Payment (Discounted Rate)

Average Monthly Payment (OSFI Qualifying Rate)

14,089

14,483

19,653

17,230

18,993

17,849

19,529

19,938

17,233 12,622

22,047

19,246

20,624

17,381

17,851

19,498

22,482

25,062

16,323

16,129

0

5,000

10,000

15,000

20,000

25,000

30,000


Q1 TREB MLS® Sales

5,652

6,598

8,529 7,252

8,971

8,633

8,154

9,218

8,520

7,900

10,579 8,777

10,020

9,537

9,660

11,254

12,016

11,463

7,744

9,042

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000


April TREB MLS® Sales

+17% Y/Y

5

6

7

8

9

10

11Pe

r Cen

t (Se

ason

ally

Adj

uste

d)

Source: Statistics Canada

Toronto CMA Unemployment RateUnemployment remains well-below average, but has risen in response to slower growth.

0

20,000

40,000

60,000

80,000

100,000

120,000


GTA Family Income

89,849

94,839

94,885

102,501

94,778

100,393

94,641

81,348 61,150

96,000

106,147

140,231

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2006 /2007

2007 /2008

2008 /2009

2009 /2010

2010 /2011

2011 /2012

2012 /2013

2013 /2014

2014 /2015

2015 /2016

2016 /2017

2017 /2018

Source: Statistics Canada; Year Ending June 30

Net Annual Growth in GTA Population

Immigration played a large role in the increase.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000


Immigration into Ontario/GTAHighest Level in Over a Decade

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000


Immigration into Ontario/GTAHighest Level in Over a Decade

GTA has accounted for +/-75-80% of Immigration to Ontario

© 2018 Ipsos 15

Likelihood To Purchase A Home

1. How likely are you to purchase a home in which to live over the next year?Base: All respondents. May 2019 (n=1502); 416 (n=736), 905 (n=766). Nov 2018 (n=4060); 416 (n=1366), 905 (n=2694). Nov 2017 (n=3974); 416 (n=1645), 905 (n=2329). May 2017 (n=3981); 416 (n=1649), 905 (n=2332). Dec (n=3,774); 416 (n=1,475), 905 (n=2,299). Nov 2015 (n=3451); 416 (n=1518), 905 (n=1933).

30% 28% 26%29% 31%

12% 10% 10% 10% 11%

Nov 2015 Nov 2016 Nov 2017 Nov 2018 May 2019

TOTAL GTA

[NET]

LIKELY(Very / Somewhat)

VERY LIKELY

© 2018 Ipsos 16

Likelihood To Purchase A Home – By Region

1. How likely are you to purchase a home in which to live over the next year?Base: All respondents. May 2019 (n=1502); 416 (n=736), 905 (n=766). Nov 2018 (n=4060); 416 (n=1366), 905 (n=2694). Nov 2017 (n=3974); 416 (n=1645), 905 (n=2329). May 2017 (n=3981); 416 (n=1649), 905 (n=2332). Dec (n=3,774); 416 (n=1,475), 905 (n=2,299). Nov 2015 (n=3451); 416 (n=1518), 905 (n=1933).

27%25% 25% 26%

30%

11%9% 9% 9% 10%

Nov2015

Nov2016

Nov2017

Nov2018

May2019

905 [NET]


VERY LIKELY

33%

32%28%

37%

31%

14% 12% 11%14%

11%

Nov2015

Nov2016

Nov2017

Nov2018

May2019

416

© 2018 Ipsos 17

Incidence of First-Time Home Buyers

3. Will you be a first-time home buyer?Base: Likely To Purchase. May 2019 (n=455); 416 (n=227), 905 (n=228). Nov 2018 (n=1,001); 416 (n=462), 905 (n=539). Nov 2017 (n=1,000); 416 (n=472), 905 (n=528). May 2017 (n=1376); 416 (n=781), 905 (n=595). Dec 2016 (n=1,001); 416 (n=455), 905 (n=546). Nov 2015 (n=1000); 416 (n=490); 905 (n=510), June 2015 (n=768); 416 (n=387), 905 (n=381).

49% 53%41% 38%

46%


TOTAL GTA

© 2018 Ipsos 18

Incidence of First-Time Home Buyers – By Region

3. Will you be a first-time home buyer?Base: Likely To Purchase. May 2019 (n=455); 416 (n=227), 905 (n=228). Nov 2018 (n=1,001); 416 (n=462), 905 (n=539). Nov 2017 (n=1,000); 416 (n=472), 905 (n=528). May 2017 (n=1376); 416 (n=781), 905 (n=595). Dec 2016 (n=1,001); 416 (n=455), 905 (n=546). Nov 2015 (n=1000); 416 (n=490); 905 (n=510), June 2015 (n=768); 416 (n=387), 905 (n=381).

43% 44%37%

32%42%


905

56%64%

46% 44%50%


416

© 2018 Ipsos 19

Not heard of program

Federal First-Time Homebuyer Incentive 18%

70%(T2B among first-

time buyers)

Increase First-Time Buyer RRSP Withdrawal Limit 19%

59%(T2B among first-

time buyers)

Provincial and Municipal Land Transfer Taxes 12% 32%

(B2B)

OFSI Mortgage Stress Test 21% 23%(B2B)

12%

8%

3%

3%

33%

25%

10%

10%

46%

53%

55%

64%

3%

8%

21%

13%

5%

6%

10%

9%

Government Programs/Policies to Incentivize Buying a Home

11. Will the following government programs/policies make you more or less likely to purchase a home over the next 12 months?Base: All respondents (n=1502); 416 (n=661), 905 (n=841). Where applicable, some answer choices were not shown to home owners.

Much more likely More likely No impact Less likely Much less likely

58,095

67,467

74,533

78,675

83,213

83,831

82,947

92,856 74,502

86,979

85,862

89,109

85,506

87,049

92,781

101,213

113,040 92,264 77,341

86,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(F)


Annual TREB MLS® Sales Forecast

+11% Y/Y

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(F)


Annual TREB MLS® New Listings

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Source: Canada Mortgage and Housing Corporation; TREB Calculations

Toronto CMA New Home CompletionsTotal Freehold and Condo Completions

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Source: Canada Mortgage and Housing Corporation; TREB Calculations

Toronto CMA New Home CompletionsTotal Freehold and Condo Completions

Total Completions Net of New Condo Rental Additions

24

Likelihood of Listing Home For Sale

A3. How likely are you to list your home for sale over the next year? Base: Those who own a home. May 2019 (n=899); 416 (n=395), 905 (n=504). November 2018 (n=2502); 416 (n=1216), 905 (n=1286). November 2017 (n=2753); 416 (n=1219), 905 (n=1534). May 2017 (n=2019); 416 (n=959), 905 (n=1060).

40% 37%32%

14% 12% 12%

Nov 2017 Nov 2018 May 2019

TOTAL GTA

[NET]


VERY LIKELY

25

Likelihood of Listing Home For Sale

A3. How likely are you to list your home for sale over the next year? Base: Those who own a home. May 2019 (n=899); 416 (n=395), 905 (n=504). November 2018 (n=2502); 416 (n=1216), 905 (n=1286). November 2017 (n=2753); 416 (n=1219), 905 (n=1534). May 2017 (n=2019); 416 (n=959), 905 (n=1060).

38%34%

28%

12% 11% 10%

Nov 2017 Nov 2018 May 2019

905

[NET]


VERY LIKELY

43%40% 38%

16%13% 15%

Nov 2017 Nov 2018 May 2019

416

© 2018 Ipsos 26

5%

5%

4%

4%

13%

12%

8%

8%

72%

72%

71%

60%

3%

5%

10%

18%

7%

6%

8%

10%

Not heard of program

Net(T2B-B2B)

Federal First-Time Homebuyer Incentive 5% 8%

Increase First-Time Buyer RRSP Withdrawal Limit 5% 6%

OFSI Mortgage Stress Test 11% -6%

Provincial and Municipal Land Transfer Taxes 4% -16%

Government Programs/Policies to Incentivize Listing a Home

12. Will the following government programs/policies make you more or less likely to list a home for sale over the next 12 months?Base: Those who own a home (n=899); 416 (n=395), 905 (n=504).

Much more likely More likely No impact Less likely Much less likely

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%Annual Average Price Grow

thSale

s-to

-New

Lis

tings

Rat

io


Sales-to-New Listings Ratio & Price GrowthAnnual Average Price Growth (Right Scale)

Sales-to-New Listings Ratio (Left Scale)

$243,019

$251,520

$275,926

$293,062

$315,154

$335,729

$351,614

$375,878

$379,082

$395,225

$431,277

$464,993

$497,134

$522,958

$566,618

$622,121

$729,837

$822,587

$787,148

$820,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(F)


Annual TREB MLS® Average Price Forecast


THANK YOU!

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