The Bank of Canada (BoC) announced today that it would keep the overnight rate at 1.75%.

The Bank Rate is correspondingly 2% and the deposit rate is 1.5%. The BoC has maintained the current overnight rate since last October, when it was raised from 1.5%.

No one really expected the central bank to raise rates, but there was speculation that the rate would drop back to 1.5%, even though a recent survey indicated a “near certainty” of a rate hold, This lack of movement makes Canada somewhat of a holdout among other central banks around the world that are dropping rates to help their local economies in an uncertain global economic climate.

“There is nascent evidence that the global economy is stabilizing, with growth still expected to edge higher over the next couple of years. Financial markets have been supported by central bank actions and waning recession concerns, while being buffeted by news on the trade front. Indeed, ongoing trade conflicts and related uncertainty are still weighing on global economic activity, and remain the biggest source of risk to the outlook,” the central bank wrote.

Growth in Canada slowed as expected in the third quarter of 2019 to 1.3 percent, and stronger wage growth led consumer spending to a moderate expansion. Housing investment was also a source of strength, supported by population growth and low mortgage rates. Consumer spending and housing activity are important sources of resilience in the Canadian economy, and the BoC indicated that it would continue to be on alert for any financial vulnerabilities that may affect the household sector.

“Future interest rate decisions will be guided by the Bank’s continuing assessment of the adverse impact of trade conflicts against the sources of resilience in the Canadian economy – notably consumer spending and housing activity. Fiscal policy developments will also figure into the Bank’s updated outlook in January,” the BoC wrote.

The overnight rate is the interest rate at which major financial institutions borrow and lend one-day (or “overnight”) funds among themselves; the Bank sets a target level for that rate. This target for the overnight rate is often referred to as the Bank’s policy interest rate.

Changes in the target for the overnight rate influence other interest rates, such as those for consumer loans and mortgages. They can also affect the exchange rate of the Canadian dollar.

The next interest rate announcement is January 22nd.

The City of Toronto has released a comprehensive housing blueprint to assist more than 341,000 households over the next decade.

The HousingTO 2020-2030 Action Plan provides 13 strategic actions that looks to address the “full continuum” of housing – including homelessness, social housing, rental housing, long-term care, and home ownership. Some of the highlights include a revised housing charter and the creation of a multi-sector land bank to support the approval of 40,000 new rental and supportive homes.

Implementation of the full plan over 10 years is estimated to cost governments $23.4 billion, with the city’s commitment through current and future investments being $8.5 billion.

Mayor John Torry said that he “will be working hard with the other orders of government to ensure the entire HousingTO Action Plan is fully funded”

“This has to be a priority — we have to come together to support households who are struggling to pay the rent and keep, or put a roof over their heads,” said Torry. “Ensuring that residents in our city have access to housing will benefit our entire city. It gives people the opportunity to meet their full potential and to participate in our city’s success. Together we can make a difference and make Toronto a place that anyone who wants to, can call home.”

Ben Myers of Bullpen Research & Consulting was recently interviewed by about the state of Toronto’s new housing market. Ben is always interesting. And these are the sorts of things that I read in my spare time. So here’s an excerpt:

The average price of popular new condo floor plans in the City of Toronto in October 2019 was approximately $1,275 per-square-foot (psf) and with growth of 3% a year, prices would hit $1,475 psf in 2024. I wouldn’t be surprised to see annual average growth of 4%, which would get you to $1,625 psf in five years in Toronto.

This data was taken from BuzzBuzzHome and — by “popular new condo floor plans” — I believe he means that these are the floor plans that buyers tend to click on and review when they visit the site. So it’s a good indication of buyer demand.

Here’s another quote that stuck out:

Part of the reason that price growth has spiked is a rise in construction costs, development charges, and land prices – this cost-push inflation is passed on to consumers.

That sounds right. And I have been writing about this phenomenon all year. Most of us can probably remember when $1,000+ psf was a high water mark for new construction condos. Now it’s pretty much a floor.

Ontario Economic Overview

With 2019 approaching its end, Ontario’s economic growth for 2019, at just over 1%, is forecasted
to underperform the national average of 1.4%, with 2020 only expected to see about 0.75% growth
compared to Canada’s 1.1%. The Greater Toronto Area (GTA) and Ottawa-Gatineau regions are
expected to see stronger growth than the province as a whole, at 1.2% and 1.0%, respectively in
2020. To encourage growth across the nation the BoC is expected to cut the benchmark interest rate
before the end of 2019, followed by a another potential rate cut in early 2020 to provide the necessary
economic stimulus to overcome a slowing global economy. However, headwinds are building, with
slower U.S. expansion and elevated trade policy uncertainty likely to weigh on growth in 2020. The
housing market in Ontario is the silver lining, as this sector weighed on economic growth in 2018
and early 2019, specifically in the GTA, however, it sprung to life in the spring and continues to show
increased in both sales activity and pricing.

Ontario’s labour market remains strong as a healthy influx of immigrants continues to help
companies secure workers amid tight labour market conditions. With the unemployment rate at 5.8%
at the beginning of 2019, employment growth in the province ramped up and by the end of October,
the unemployment rate had decreased to 5.1%. Along with a thriving tech sector in the GTA, Ottawa
and the Kitchener-Waterloo regions, much of the employment growth has occurred in the FIRE
sector, which is once again benefiting from the recovery of the residential real estate market. On the
industrial space-using side, the Transportation and Logistics sector continues to experience steady
growth with the rise of e-commerce services like fulfillment centres and distribution facilities. Ontario
is expected to see employment grow by 2.7% in 2019 and 1.0% in 2020. However, there is a disconnect
between strong job markets and consumer spending. With inflation in Ontario for 2019 expected
to come in at 1.9%, highly indebted households are keeping a tighter grip on their wallets with very
little savings to fall back on. Furthermore, business activity indicators are showing some cracks with
an abatement of U.S. and U.K.-bound exports. The downgraded profile for U.S. GDP and weakness
in the U.K., the two largest Canadian export markets along with elevated political uncertainty could
continue to hamper business investment in Canada and Ontario.
As the Liberals begin their second term on Parliament Hill, the public administration sector is
expected to slow as a result of Federal government spending plans, which will impact Ottawa
specifically, however, the high-tech sector is expected to continue growing, driving demand for space.
Expect much of the federal government’s attention to be on the West coast of Canada, specifically
Alberta, as the Liberals attempt to quell the Wexit movement and appease the Conservatives, while
also attempting to create alliances with the NDP and Bloc.
The continued concerns about high consumer debt and newer concerns about inflationary pressures
being brought on by trade wars could weigh down the performance of commercial real estate.
However, with heavy investment in infrastructure, continued growth in both residential and nonresidential construction and growing labour markets, Ontario is poised for a steady conclusion to 2019
with strong fundamentals throughout 2020.

GTA Office Overview

The GTA’s office market had a record year in 2019, while being recognized as one of the strongest
office markets in North America. Deeply entrenched in landlord control, the market saw its overall
market vacancy rate drop 50 bps year-over-year to end 2019 at 4.5%, with the average net asking
rental rate up 2.5% year-over-year to $19.85/SF per annum.
The good news on the supply front is that construction activity continues to increase, with 12.1 million
SF now under construction, representing 4.5% of existing inventory. This includes CIBC Square at
just under 1.6 million SF with CIBC as the lead tenant; the 1.2 million SF office project at 160 Front St.
W., by Cadillac Fairview with the Ontario Teachers’ Pension Plan as the lead tenant; as well as the
879,000 SF project at 16 York St. also developed by Cadillac Fairview with HSBC slated to be the lead
tenant. Furthermore, Oxford Properties continues to market their proposed 1.4 million SF (60-storey)
office tower, The HUB, at 30 Bay St. Along with these projects, Cadillac Fairview’s mixed-use East
Harbour development is planned to be Toronto East’s flagship destination with exceptional transit

With strong demand from finance and technology companies continuing to drive vacancy down,
rental rates are expected to continue increasing, and this new supply will not help alleviate the
tightening market conditions until they start being delivered between 2020 and 2022. As a result,
there are only three blocks of contiguous space 30,000 SF or larger in tech dominated submarkets
such as Downtown West and Liberty Village, and currently only 12 existing properties in the entire GTA
that can accommodate a tenant looking for 100,000 SF or more of contiguous space.
Downtown vacancy remains exceptionally tight as overall vacancy decreased to 2.1%, the lowest
downtown vacancy rate in North America. Landlords are keenly observant of this fact and are
increasingly selective in the types of tenants they are choosing for their space. In light of the strong
fundamentals supporting the Downtown market, landlords are looking for tenants with time-tested

sustainable operations and strong covenants before committing to a lease. While downtown vacancy
is moving down, suburban vacancy also experienced a drop of 190 bps year-over-year and the delta
between downtown and suburban vacancy rates has shrunken to 290 bps from a whopping 470 bps
at this time last year. As a result of the tight downtown market with limited options, tenants will likely
need to pay more attention to the suburban markets if they need a large amount of space in 2020.
The delta between downtown and suburban net asking rental rates is equally impressive. Downtown
rents ended 2019 at $31.71/SF, whereas suburban rents are around $16.31/SF, representing a difference
of $15.40/SF per annum. This is not indicative of the suburbs being in peril, as there remains strong
demand for space in the more urbanized suburban locations, such as Mississauga City Centre,
Vaughan Metropolitan Centre and Downtown Markham. With demand remaining strong, and new
supply limited in the short term, expect rental rates to continue edging up across the city.

The wild card for the GTA office market outlook will be the progression of Google’s Sidewalk Labs
project. The proposed ‘smart city’ development slated for the Port Lands on Toronto’s eastern
waterfront is generating controversy in terms of privacy of personal data, methodology behind
information gathering and how the development will be financed and managed. With 3.3 million SF
of office and retail space, the smart city is the largest attempt to integrate technology with urban
planning in North America. If the project were to get underway to the scope initially unveiled by

Sidewalk Labs, it would immediately impact the office, housing and employment markets. The GTA
receives approximately 100,000 new immigrants (international and domestic) to the area each year,
and the GTA economy is more than capable of providing the skilled talent at the quantity needed for
this project, as well as providing housing for them to live, without the increased demand upending
either the labour or housing markets.

GTA Industrial Overview
Despite the strong rhetoric regarding trade wars and weak retail sales, the GTA industrial market
has experienced continued strong demand. Industrial is the new retail, and much of the industrial
demand in the GTA is primarily driven by transportation, warehousing and logistics tenants, whereas
manufacturing did see a decline in the past year. The high cost of energy is one of the reasons
being cited for the pullback in manufacturing. The PC party pledged to reduce energy costs in their
provincial election campaign last year, however the benefits from lower energy costs will likely not
result in a wholesale return to manufacturing the GTA.

Along with the insatiable demand and limited supply, the GTA is now facing land shortages, which will
impact the velocity and costs of future construction activity. Projections show that the GTA industrial
vacancy rate will continue edging down below 1.0% in 2020, before starting to climb slightly back
above the 1.5% range by 2021. Such incredibly tight conditions will continue to exert upward pressure
on the overall average asking net rental rates, with expectations for rents to reach approximately
$9.45/SF in 2020 and eclipsing $10.00/SF in 2021.

GTA Retail Overview
The GTA retail market continues to receive new international retailers who are either looking to enter the
GTA market, or are using the GTA as a launching pad to the rest of Canada. The newly opened Eataly,
which opened its doors in November at the Manulife Centre in Toronto, is a perfect example of this. The
retail markets vacancy rate edged down 40 bps year-over-year to end 2019 at an impressive 1.8%, with
the average net asking rent up 7.5% over the same period to $26.97/SF per annum. However, market
rent growth has been slightly weaker, reflecting concerns about the retail market in relation to weak
retail sales and retailer performance.

Construction activity has been relatively slow, with only 2.2 million SF of new supply delivered since
Q3 2017, and construction activity has moved down from 3.7 million SF last year to 3.2 million SF at
year-end 2019, representing only 1.1% of existing inventory, with much of this construction activity
being part of mixed-use projects, or expansions to existing malls. Despite the new vacant space that
came to the market as a result of Sears Canada closing in Q1 2018, the limited amount of new supply
has not been enough to satisfy the demand from tenants who are struggling to find space amid low
vacancy and increasing rents. However, with recently announced store closures, and street front and
even mall vacancies creeping back onto the market, expect vacancy rates to rise over the coming
year to end 2020 at 2.4%.

Despite the impressive fundamentals, the economic forecast could prove detrimental to the
retail landscape. The latest national GDP data indicates that retail activity has come off the boil.
Furthermore, retail sales have been showing weakness for some time, with much of the total increase
in retail sales has been the result of inflation and population growth. Although retail sales growth
is expected to remain positive, high consumer debt is expected to hinder retail sales going forward,
despite any expectations for the BoC to cut interest rates. However, GTA retail sales are expected to
increase by over 2.0% each year out to at least 2025, but much of that growth will be captured by
e-commerce as opposed to brick and mortar retail.
In order to combat the effects of e-commerce on the retail market, landlords of premier quality
properties continue to work on improving their properties, making them experiential destinations.
The making of an experiential destination goes beyond just having more restaurants and services
in malls, and can include ventures such as Ivanhoe Cambridge and Cirque du Soleil teaming up to
offer family entertainment centres in shopping centres, which is due to launch early 2020. Landlords
are looking at ways to further differentiate themselves from the rest of the pack in order to attract
more shoppers as well as new and better retailers. Expect to see this, along with more intensification
of retail properties and repurposing of parking lots in suburban malls, as seen at properties such as
Yorkdale Mall, and Aoyuan’s redevelopment plans for Newtonbrook Plaza.

Ottawa Office Overview
Ottawa commercial real estate is experiencing a renaissance with renewed interest along the LRT
line and other well-located properties for the purpose of redevelopment or development. Occupancy
gains were attributed to leasing by technology and federal government tenants throughout 2019
with the now fully operational phase 1 of the LRT line acting as the biggest demand driver. The LRT
has made well-positioned buildings winners in the office market, particularly properties that have
stops integrated into their buildings. The LRT’s completion will secure higher rental rates in buildings in
close proximity and become a main feature in retaining old tenants and attracting new ones. Easier
accessibility outside of the Downtown Core could also continue lowering vacancy rates in both the
western and eastern submarkets. Furthermore, with federal spending likely to curb due to the election
outcome, government leasing is likely to slow down; however, this will allow private sector tenants to
either expand or move into the market with less competition.

Overall vacancy in Ottawa is down 80 bps year-over-year to end 2019 at 4.2%; however, net asking
rents were up only 1.7% over the same period, to $16.98/SF/annum. Construction activity has been
underwhelming over the past years but a handful of projects should begin to change the narrative
across the city. Of the projects that are under construction, most are larger mixed-use projects,
with only a portion slated to be office space. The largest example of this being the waterfront
development Zibi, expected to bring approximately 240,000 SF of office space to the market. Close
behind is 900 Albert St., a mixed-use and transit oriented development comprised of 200,000 SF of
office space. Like many of these projects, 900 Albert St. is located along the new LRT Line. However,
other projects, such as Taggart’s 153,000 SF design build in the Kanata West business Park for Kinaxis,
a supply chain planning software company, should kick off shortly.

Although high-tech companies and the Federal government have long been part of the office market
tenant mix in Ottawa, the Federal government is beginning to embrace the concept of flexible work
space and choosing to occupy more space in the suburban markets over the last few years, which
has resulted in higher vacancy downtown. This has created opportunities for high-tech tenants who
might be looking for more urban locations with access to public transit. Expect demand to outstrip
supply in 2020 and beyond, with vacancy continuing to edge down.

Ottawa Industrial Overview
The Ottawa industrial market has experienced relatively strong demand throughout 2019, with
vacancy down 100 bps to end 2019 at 1.7%. As a result of tightening market conditions market rents
continue to increase, despite asking net rental rates appearing flat year-over-year at $10.63/SF per
annum at the end of 2019. This continues to raise the question of whether tenants are willing to wait
for new space or pay record high rental rates for existing older stock.

Although the market experienced significant new supply in 2019, 1.0 million SF of the 1.2 million SF
delivered in 2019 was the result of the new Amazon fulfilment centre, resulting in no real alleviation to
continuously tightening conditions. Both the developer and the City of Ottawa hope that this project
will breathe new life to the city’s industrial development pipeline and kick off more new speculative
construction in the region.

Looking forward, there is currently only one major project to speak of that could satiate demand
from new or expanding tenants in the Ottawa market. Broccolini’s proposed 700,000 SF speculative
development is interesting not only because of its size, but also because they have applied to the
City to raise the height of the building from just under 50 feet to almost 100 ft. The question is, what
would you do with a 100-foot tall single storey industrial building? Despite this potential project,
the lack of new supply and availability of quality space, in particular large blocks, will contribute to
continued tight market conditions and higher asking rental rates.

Ottawa Retail Overview
The Ottawa retail market has experienced a 120 bps year-over-year drop in vacancy to 2.7% at the
end of 2019. This drop is partially the result of retailers opening new locations at the Cadillac Fairview
Rideau Centre earlier this year and the slow rollout of legal cannabis brick-and-mortar stores. As a
result, average net asking rental rates have steadily increased, however, they are only up 1.5% yearover-year to end 2019 at $20.96/SF per annum.

Construction activity has been relatively slow as well with only 534,000 SF of new supply delivered
since Q2 2017 and only another 252,000 SF currently under construction, mainly as part of the
podiums of mixed-use residential projects along the new LRT lines. Given the forecast of demand for
space along the LRT lines, this construction activity will likely not meet demand over the coming years,
and redevelopment of the areas adjacent to the new transit line seems likely.
Ottawa’s retail sales growth is expected to remain strong in 2020, at 2.1% growth, however, as the
potential for pullbacks in the public administration sector weigh on the outlook, retail sales growth
is expected to fall below 2.0% for the foreseeable future thereafter. Furthermore, high debt service
costs and competition from the rise of e-commerce, especially now that Amazon is in town, will take
a bite out of retail sales activity. Developers will look to give buildings in close proximity to the LRT a
facelift while retailers in older buildings, in less than ideal locations, may have to close their doors due
to increased costs and lackluster sales growth. The upside of this shift would be new and fresh retail
space available upon completion, leading to continued interest from diversified international retailers.

Landlords continue to look for ways to differentiate their properties and make them more experiential
destinations in order to combat the effects of e-commerce on the retail market, and the Ottawa
market has not been immune to this. Expect to see more intensification of retail properties and
repurposing of parking lots, specifically along the LRT lines in the coming years.

Source: CoStar

Like all markets, the housing market in Ontario is driven by the laws of supply and demand. Strong demand for housing has created a persistent supply challenge that can only be solved, simply, by boosting the number of new homes being built.

This approach makes sense. It is supported by numerous economists and academics. This is why the Building Industry and Land Development Association is encouraged by the provincial government’s focus on boosting housing supply.

Every month, BILD releases the previous month’s new home sales data, gathered by Altus Group, tracking the relative health of the new housing market as reflected in sales, inventory, price per square foot and comparisons to historical trends. The data we released for September pointed to a modest recovery from the slump of the previous year, but, given that new home sales and inventory increased in tandem, the data underscored that the GTA continues to experience a significant housing-supply crunch.

In previous columns, I have highlighted that the GTA is one of the fastest growing metropolitan areas in North America, with an average of 115,000 net new residents per year. Our population is expected to reach 9.7 million by 2041. Given this robust growth in population, demand for housing of all types — to buy or rent — is strong and will remain so.

The challenge is that the supply side of the housing equation in Ontario is highly regulated and dependent on factors that can make it less responsive to demand signals. The first of these factors is the supply of land designated for residential construction and serviced with the appropriate infrastructure. Within the cities of the GTA, the amount of available lands for new residential construction has been steadily decreasing.

Another factor that restricts our housing supply relates to planning and approvals. New housing cannot simply be built any time, anywhere. All new housing projects go through a complex and lengthy approval process, subject to multiple pieces of provincial regulation, which is interpreted and administered by municipal governments. This slows the supply side from being able to meet demand signals. As a result, in the GTA it takes on average of 10 years to complete a typical highrise project and 11 years to complete a typical lowrise project.

Like a growing number of governments around the world, the Ontario provincial government has recognized that achieving balance in the housing market starts with increasing supply. The government recognizes that adding new homes helps moderate prices, creates trickle-down housing opportunities for those looking to enter the housing market and has a beneficial impact on the rental market.

French architect Jean Nouvel has designed a sprawling, stone-clad residential development for the outskirts of Quito that echoes its mountainous surroundings.

Ateliers Jean Nouvel has created Aquarela for Cumbayá, a rural area east of the Ecuadorian capital, in collaboration with local architectural developer Uribe & Schwarzkopf.

The 136,580-square-metre project will comprise nine residential blocks wrapped by curved balconies covered in stone. Greenery will be planted in rocky gardens inside these – and flow over the tops – to give each resident a connection to the outdoors.

Behind the rocky exterior, the walls of the homes will comprise large expanses of glass and tall slatted wooden shutters that will fold open to reveal the mountainous backdrop.

Each residential block will also have access to its own rooftop pool and a number of elevators so each resident only shares their lift access with one other tenant. Renderings of the scheme released by Uribe & Schwarzkopf show that greenery will continue inside, with plant-covered walls lining the lobby.

A typical two-bedroom apartment inside will have an open-plan living area with glazed doors that lead onto a private terrace surrounded by rockery. Each bedroom will also have an en-suite bathroom.

The first portion of Aquarela is already under construction, and slated for completion in 2020. This block will include the clubhouse with a range of amenities, such as a bowling lane, an ice rink, a yoga studio, music room, mini-golf and a cinema.

Other facilities include access to football, squash and tennis courts; areas designed for young children and teens; workspaces, a hairdressers, event spaces, a gym, spa and a swimming pool

French architect Nouvel recently completed the National Museum of Qatar in Doha and the Louvre Abu Dhabi in the United Arab Emirates capital. He hit the news last month when it was revealed he was counter-suing the Philharmonie de Paris over a “totally disproportionate” late-fee.

Nouvel, the 2008 laureate of the annual Pritzker Prize, joins a host of well-known international architects that Uribe & Schwarzkopf has enlisted for major projects in Quito.

Arquitectónica and YOO studios, which is run by Philippe Starck and John Hitchcox, worked together to complete YOO Quito residences in the city’s González Suárez area. The project features a metallic cloud-like structure on top, which has become a significant marker on the skyline.

Dutch designer Marcel Wanders collaborated with YOO on the Oh Quito, a two-tower residential development, which is nearing completion.

Bjarke Ingel’s firm BIG is also working on two Uribe & Schwarzkopf projects in Quito: a mixed-used tower called EPIQ, which is covered in pink, herringbone-patterned cladding, and the curved IQON tower, which is set to become the tallest building in the city.

BIG announced the Ecuador projects shortly after Moshe Safdie unveiled his project Qorner tower for the city.

A proposed 72-storey, mixed-use tower set to become the tallest in Niagara Falls was approved at a Council meeting in that city yesterday evening. The condominium and hotel tower at 6609 Stanley Avenue is set to rise 253.45 m high, surpassing the 56-storey, 177.1 m/581 ft north tower of the Hilton Niagara Falls, which has been the tallest building in that city since 2009.

Since news about the tower broke at the end of October, additional details and images have been released for the proposed landmark and its distinctive “bottle opener” design by Toronto-based Hariri Pontarini Architects, evocative of the 2008-built Shanghai World Financial Center. New renderings build off of the initial elevation diagrams, offering a better representation of the tower’s massing and exterior finishes.

Detailed renderings of the building’s bottle opener crown includes high-definition views of the upper amenities, set to include a 56th-floor “sky lounge” topped by a “sky garden” with an outdoor infinity pool, and a “sky link” aerial bridge. All of these spaces would overlook the Falls and the existing city skyline in the foreground, as well as distant views of the Toronto and Buffalo skylines on clear days.

Tuesday evening’s public meeting resulted in the issuing of amendments to the City’s official plan and zoning bylaw which allowed buildings as high as 30 storeys on that block. Around $2.7 million in community benefits are being implemented in exchange for the lofty 72-storey height.

The tower will feature a 456-room hotel on its lower half, with 275 residential units housed above. This infusion of density will help to mend a longstanding tear in the local urban fabric, with a two-storey concrete hulk from an earlier failed hotel construction project currently occupying the development site, which has sat vacant for 15 years.


The Toronto housing market continued to rebound in September, with prices rising the most in 21 months, bringing the cost of a typical home close to the record high set in 2017.

The benchmark price across all types of homes rose 5.2 per cent from a year earlier to $805,500, the highest annual rate of growth since December 2017. That’s about $10,000 short of the record set more than two years ago when soaring prices prompted a series of government policy changes to cool the market. Prices were driven higher by a decline in supply, with active listings down 14 per cent to 17,254.

Sales in the Toronto region jumped 22 per cent to 7,825 units from the same period last year, the Toronto Real Estate Board said Thursday. All housing segments saw double-digit gains, led by a 29 per cent sales jump for detached homes. Sales were well below the record set in September 2016 of more than 9,800, and on a seasonally-adjusted basis, sales fell 0.3 per cent from August.

The average price of a home in Toronto rose 5.8 per cent to $843,115, the highest price this year, though well below the peak of almost $921,000 set in April 2017.

Demand for homes in Canada’s biggest city continues to grow amid lower interest rates and a crunch in supply thanks to strong immigration flows. Buyers have also adjusted to stricter mortgage-lending rules put in place to cool the market. Sales in Vancouver rebounded 46 per cent last month after a policy-driven slump, though prices continue to dip.


Much ink has already been spilled over the rebound in housing that’s underway in some of Canada’s largest markets. After a volatile 2018 and an exceptionally brutal winter, home sales began to recover, particularly in the Toronto and Vancouver regions.

The country’s all-seeing housing eye, the Canada Mortgage and Housing Corporation (CMHC), recently published its optimistic 2020-2021 market outlook. The organization famously predicted that 2019 would be one of the worst years for Canadian home sales in the last 10 years, so the shift in tone for the next two years has been striking. Heck, it even revised its 2019 forecast to account for a better-than-expected housing performance during the year.

In the 2020-2021 outlook, the CMHC writes that Ontario will lead the country in the continued home sales and prices recovery, pulling up the national averages and offsetting ongoing weak performance in some of the country’s other major centres.

The Toronto condo market has played a significant role in the housing recovery observed in markets across the country through the spring and summer months. In the third quarter, the condo market saw an 11.1 percent rise in sales and a 5.8 percent increase in prices. While these upward trends are generally anticipated to be sustained through the next year, Toronto’s condo market will be particularly sensitive to a number of other factors that are playing out now.

Below we explore three condo market trends that are worth digging into beyond the simple ‘prices and sales go up or down’ market indicators.

1. Toronto’s job market will continue to show its strength in 2019
It doesn’t take a PhD to understand that as long as Toronto remains Canada’s business centre, the city will continue to attract large numbers of new residents assuming the economy stays on a reasonably solid growth trajectory.

“As economic conditions continue to be favourable for job growth in the Greater Toronto Area, people have continued to come to the city for work,” said Toronto Real Estate Board President Michael Collins in a media release published earlier this month.

While talk of a global recession has been bubbling up for months now, the fears don’t seem to be having much of an impact on the country’s job market.

“The big Canadian jobs machine just keeps chugging along, giving no sense that the economy is on the cusp of an imminent downturn,” wrote BMO Chief Economist Douglas Porter in early October, following the release of “sturdy” Canadian employment data from September that saw Ontario add 41,000 jobs.

Expect demand for condos to remain high so long as Toronto is a beneficiary of that “big Canadian jobs machine” attracting new residents to the city.

“Home ownership is important to many Canadians, and, as a relatively affordable housing option, condos in the GTA offer prospective buyers the chance to achieve their dreams of owning property,” said TREB’s Collins.

2. The city’s rental housing deficit isn’t going anywhere
All this good job growth news is both a blessing and a curse for Toronto’s beleaguered renter population who have endured a relentless onslaught of price increases over the years. Job growth has been paired with an increase in average hourly wages, so you’d imagine more jobs with higher pay would benefit renters in the city.

Of course, none of this is happening in isolation, so the burgeoning labour market has also added more residents to the city all competing for the same limited number of rental units in the chronically undersupplied market.

So while the positive job market picture could change on a dime in the face of a deteriorating global economy, only incremental change will likely lift the Toronto rental market out of supply deficit territory.

In a September RBC report, economist Robert Hogue estimated that the number of rental households will increase at an average of 22,200 annually in Toronto between 2018 and 2022. That sounds great from a ‘the city is booming’ perspective, but is a lot less exhilarating when you find out that the city is building nowhere near enough rental housing to accommodate these numbers.

Investor-owned condos make up a significant proportion of the rental supply pool in the city, so you can bet landlords will see plenty of interest in their properties for years to come. And it really could be years — in his report, Hogue said that more than half of the new condo units for the needed rental pool expansion still must be made up. Only major shifts in government policy will move the needle on this issue and Hogue is unconvinced that any level of government is doing enough to expand the rental housing pipeline.

3. The Liberal federal government will expand its support for first-time homebuyers
The now-minority Liberal government first rolled out the First-Time Homebuyers’ Incentive earlier in 2019 to a skeptical audience of economists and housing industry observers. Many thought it was less than helpful to homebuyers in Toronto, where the average home price exceeded the maximum mortgage participating homebuyers were permitted to take on through the program.

The Liberals made it a campaign promise to expand the program by increasing the qualifying household income level and maximum mortgage size. If they follow through, the move will likely increase competition within Toronto’s condo market since that’s where the city’s first-time homebuyers typically focus their efforts when taking that first step onto the property ladder.