There’s been a lot of talk of a “housing bubble” in the Greater Toronto real estate market. Many pundits are talking about speculators – domestic investors fuelling an already overheated market. RE/MAX looked at just over 5,000 individual freehold transactions in the GTA between March 15, 2019 and March 14, 2021 and found that less than 2% of sales were repeated in that time period, leading to the conclusion that speculators are not a significant factor driving the current market and rising prices.

RE/MAX examined home-buying activity in six Greater Toronto Area neighbourhoods – C03, W05, E01, Erin Mills, Aurora and Northwest Ajax – on properties priced between $500,000 and $1,499,999.

Of the 1.58% transactions between March 2019 and March 2021 that were repeat sales, only approximately 20% of these indicated that renovations were made between sales.

Wrong Conditions for Speculators

Investors tend to wait out hot markets, preferring to buy when prices are down and sell when they’re up again. Those who are looking for short-term investment opportunities in the Toronto housing market (and in many other Canadian regional, for that matter) will be hard-pressed to find them under current conditions.

Bully offers and bidding wars are commonplace in the current market, with demand outpacing supply in virtually all areas of the GTA and the winner buyer paying top dollar. The current environment is simply too hot for investors and builders.

There may very well be some investment/speculation occurring in the GTA condo market, as pricing dropped in tandem with condo sales, but investors have always played a role in the condominium market so this isn’t entirely surprising. That’s unlikely to end anytime soon.

RE/MAX Brokers Say Homebuyers Are Not Speculators

RE/MAX brokers in the GTA were clear that there is no speculation in the market at this point. We took our research a step further and conducted an online survey of RE/MAX brokers and agents in Western Canada, Ontario and Atlantic Canada. A landslide 96% confirmed that the majority of homebuyers are end users, while only 4% were classified as speculators. With a freehold market that’s being driven by end users, upward pressure on housing values is often a function of limited supply.

If Not Speculators, Who (Or What) is Driving Toronto Real Estate Prices?

For the full report continue to read here: Blog.Remax.ca