Mark Albert


The Scary Unknown

14 August 2019
Mark Albert

What is the Reality of Reality?

If we were to define this current real estate lack of phenomena and unknown identifier, it might be the very political "period of adjustment" or "transition period".  Vacancy rates are reported to be less than 1% (seriously!)  in Toronto and York region. Condominium sales and prices continue to increase but as proven by recent experience, some areas seem exempt from market influence.  While currently it is difficult for find an entry level 1 bedroom condo over 600 square feet for less than $400,000. almost anywhere in Toronto or York region; some areas, like Antibes Drive, in North York, still have a supply of 2 bedroom condos over 1200 square feet for less than $500,000.

I was recently asked to find a condo anywhere in the GTA for under $300,000.  The handful of results that my search produced,  I could not recommend, in good conscience, to a family, of 3 plus, looking for good space in a good location.  What I found was small, shabby, neglected often in need of repair in an area with a bad rep. With the stress test (adding 2% to the mortgage rate for qualification purposes),only one currently fully employed (independent contracted) spouse and the added expense of our city's additional Municipal Land Transfer Tax.  The family looking to move had to be grateful to remain in their rent controlled rental and wait until another income could be added to the mix.

Here's the good news.  Real estate always goes UP

Yes, do you remember the great spike of 1988/89 and the plummet and plunder of real estate in 1991/1992?  The average price of a Detached house selling in 1991 was under $250,000., while the average condo sale was under $140,000.00. Compare that to 2018 detached homes averaging $1,009,500. and condos selling for an average of $552,400.00

When my broker-owners, the Pilarsky brothers of Re/Max Realtron Realty Inc. told me - just 10 years ago when detached housing averaged $400,000.- that the average price for a detached home would exceed a million bucks (even for a bungalow) I thought their vision was not only grandeur, but delusional.  Yet, here we be.

What has been (in real estate), will be again...that is continued appreciation of value at a rate that exceeds most other investments over a medium to long term.