Toronto’s Housing Market Is Stabilizing

Real estate, like many aspects of life, is molded by perception and psychology

picture of toronto houses

When prices begin to pick up consistently, and when demand is healthy, a feeling of prosperity and long-term benefit kicks in, encouraging more people to buy and in turn, fueling positive perceptions and emotions. When this energy runs out, people begin to hold off on purchases, sell rather than buy, and direct their focus to paying off debt and consolidating their finances. Eventually prices level off and fall. Like the stock market, sudden shifts can panic people into a negative stampede – a massive fall in prices and demand. Regardless of the real fundamentals, real estate will always be affected by perception.

Toronto Real Estate Is Still In Good Shape Despite A Rough Winter

When it comes to the real underlying fundamentals, Toronto real estate is in good shape. Tembo has repeatedly emphasized our region’s strengths and we have always taken a positive, long term view. A stable economy, a peaceful society, strong immigration, and a sense of financial and material comfort underpin the overall strength of southern Ontario and especially GTA real estate. The end of the summer of 2017 and the transition to winter marked a very intense and sudden reversal of fortunes for Toronto real estate, with large price declines and a strong fall in demand. But the very latest data suggests that the modest recovery many experts anticipated is finally beginning to materialize.

Real Estate Figures For March Look Positive

Figures for the month of March show a very modest but welcome increase in average home prices in Toronto: at just over 2%, from February numbers. The average figure is just below $785,000.00. While sales still declined just over 6% from March to February, the fall was less severe than some expected. With prices slowly but steadily beginning to creep up again and with overall sales figures declining less vigorously, the perception that the traditionally buoyant spring market will be healthy is strengthening. This is a welcome psychological change given the impact on the market of a gradually increasing interest rate environment announced by the Bank of Canada, foreign buyer taxes hitting the market, and new stress tests squeezing out riskier first time buyers.

Real Estate Figures March Infographic


Despite Market Turmoil, Condo Market Marches On

With house prices and sales falling in Toronto for a rough start to 2018, one of the shining beacons remaining in real estate is this condo market. Since the early to mid 2000s, the condo market in Toronto has boomed continuously, with only a brief blip in 2008-2009. Condo flipping, the practice of buying a condo early, preferably in pre-construction, and then selling it quickly after rapid price rises was de rigueur in Toronto from the mid 90s to the beginning of the dot-com bust and then again from 2002-2008, and was considered a safe and easy way to make money. The practice of course has continued after the 2008-9 recession, but by 2009 and 2010 the entry level price of buying a pre-construction condo had risen considerably.


Toronto skyline


Condos Construction Is Changing Toronto’s Skyline

condo construction

Condo Market in Toronto Continues 30 Year Boom

Condo housing starts in February of the year rose 103% in Toronto to almost 64,000 units compared to the previous month, making it a record not seen since 1990. Condo demand has remained voracious; foreigners, natives, and retirees all buy condos in huge numbers. For a majority of first time home buyers, condos are the only reasonably accommodative venue to get real estate equity. Despite challenges, the condo market in Toronto continues its almost 30 year boom.

Toronto Condo infographic

British Columbia Moves To Introduce new “Speculation Tax” – Will Ontario Follow?

British Columbia Moves To Introduce new “Speculation Tax” – Will Ontario Follow?

Vancouver Capital

There is big real estate news out of British Columbia. The long-term heat of the Greater Vancouver real estate has made British Columbia a trend setter in broad government measures. The previous British Columbia Provincial Government introduced Canada’s first foreign buyer tax in the run up to the 2017 Provincial Election. Long standing concerns about the affordability and supply of Vancouver real estate and the impact of predominantly East Asian foreign buyers on the market spurred the then Liberal government to act. Tembo has extensively outlined and documented the foreign buyer tax, set at 15%, and applying only to the Greater Vancouver Area.

A new “speculation tax” is in

            The 2017 Provincial saw the incumbent Liberal government narrowly defeated by a resurgent NDP backed by a strong Green Party in a coalition government. The new NDP government has just introduced an annual tax on investors who own empty properties and pay no income taxes in the province. The “speculation tax” of 0.5% of a property’s assessed value in 2018 and will rise to 2% in subsequent years. This will result in a $40,000.00 annual tax on $2 million-dollar homes, as an example. Experts believe the tax will have a minimum impact on speculation and as Tembo has explained, foreign buyers will find and utilize numerous loopholes to evade foreign buyer taxes and this speculation tax. The BC government has made housing affordability and the construction of affordable housing a major priority.NDP Leader

Ontario may follow suit

Kathleen Wynne

            Ontario quickly emulated the British Columbia foreign buyer tax and has already implemented it. Housing is a major political and social issue in Ontario and it is highly likely that the Liberal Government of Kathleen Wynne will introduce a “speculation tax” on empty high value foreign owned homes as well. The political value of appearing decisive and strong in dealing with housing will be appreciated by a government that will have a tough fight ahead of it to win a fifth consecutive term after 15 years in power. Tembo believes that there is a strong possibility of a speculation tax in Ontario. The impact of the tax on affordability, prices, and supply will remain to be seen.


Toronto Real Estate Markets Chills in January

toronto real estate

Sales and prices are down

Stats from January of this year paint a difficult picture for GTA real estate. The Toronto Real Estate Board outlined that sales stats fell 22% to just over 4,000 units in January 2018. Unit sales were the weakest since Jan. of 2009. Furthermore, the average home price fell to just over $736,000.00, a 4% decline from similar figures in Jan. of 2017. Sale prices are now back to late 2016 levels, with the recent saga of changes having evaporated the blockbuster gains of 2017.

Toronto Real Estate Infographic

Media call it a correction, blame government measures

mortgage application rejected

The media are broadly calling these reductions in prices and sales a ‘correction’, and they blame federal government-imposed stress tests, higher interest rates, and a reduction of foreign demand because of a provincial foreign buyers tax as chief causes for the reduction so far this year. The market was bracing for difficult conditions and cold stats given the vast swath of changes which have been introduced and the aforementioned stats reinforce and outline these difficult conditions. Stress tests alone essentially wiped out 10% of potential buyers, by simply elevating the difficulty of qualifying for financing.

Jan. stats within the broader picture

While tough for sellers and many real estate professionals, the above statistics, if analyzed within a broader context of the past several years, are but brief negative blips. In mid 2014, as little as four years ago, the average sale price for a home in the GTA was roughly $550,000.00. Prices have increased by 50% on average in just four years. A 4% reduction in average prices is a miniscule reduction.

home price increase

Real estate still strong, and conditions should improve

condo markets on fire

The condo market is on fire. Demand remains reasonably healthy. The economy continues to grow, and immigration remains high. Rental vacancies are at historic lows. As winter turns to spring, the real estate market should heat up and the broader community will acclimatize to stress test changes and gradually higher interest rates.

Why Tembo Matters Now More Than Ever

Why Tembo matters now more than ever

Higher interest rates, insurance premiums and rising moving costs, new stress tests and tighter bank scrutiny and the extremely low availability of rental units in the GTA make Tembo’s services more relevant than ever.

family buying a home

Tembo is all about giving homeowners flexibility, added resources, and peace of mind in the event of a move to another property. If you are a homeowner who wants to sell their home and buy a new one, for whatever reason, market dynamics are making it more stressful, expensive, and complicated to seal the deal smoothly and make the transition easily. Tembo provides deposit advances on the basis of equity so homeowners can seal their new purchase without waiting stressfully for months for a property to close and sell.


Tembo Financial offers financial solutions that provide homeowners flexibility, added resources, and peace of mind in the event of a move to another property.

Higher interest rates mean that the scrutiny and cost of receiving a mortgage are increasing, this provides less flexibility for homeowners in securing financing for a new purchase. It also could result in complications, ongoing administrative and approval trouble, and a prolonged closing period, which would make any family stressful. A few lost days waiting for a property to close and a mortgage to be approved could mean the difference between a dream home purchased or not, let alone several more weeks or even months. Tembo is here to provide you with the deposit or mortgage you need now.

interest rate increase ahead

In 2018 Buying A Home Is Going To Be A Rough Ride – Tembo Can Help

  Interest rates are also set to continue rising, and Tembo predicts more rate rises if unemployment and growth figures remain strong. If a first-time homebuyer is purchasing the property you are selling, prepare for a potential rough ride and a tough sale process. Stress tests, increasing insurance premiums, and immense bank scrutiny mean the sale will not close as smoothly as was the case in the past. Tembo is here to help you have peace of mind. If you plan on moving out you will need resources to make the timely process of finding a new place more convenient and Tembo can help with that as well.

            In any event, selling a property will continue to generally become more difficult and stressful. Whether its with money for a deposit, renovation or perhaps something else Tembo is here to help! Contact us today to access your equity today.

Tembo Financial Telephone:1-844-238- 6717  or Email:


Rental Prices Are Soaring In Canada’s Biggest City

Rent is Soaring


 Apart from recent increases in interest rates by the Bank of Canada which Tembo predicted in our last blog, a big piece of recent real estate news deals with the rental market in Toronto, which is going through important changes which this blog post will outline.

Prices are increasing significantly

bidding wars

The Toronto Real Estate Board (TREB) just announced that average monthly rental costs for a one-bedroom condo in Toronto hit just under $2,000.00, up 10% from last year. Two-bedroom condos come in at just over $2,600.00 a month on average. Interest rates going up will make borrowing more expensive for first time buyers and will gradually force developers to decrease costs and improve profitability. Affordability will be even less of a concern than it is now.

Rental vacancies at record lows

no vacancy

            Low supply of rental units is fuel to the fire of higher and higher prices. The rental vacancy rate in Toronto is around 1%. Many people are being systemically priced out of the city because there are too few affordable rental units left. Condo apartments are out there but getting one is difficult, competitive, and required a solid income.

Government measures aren’t helping

ontario fair housing plan

The Ontario Fair Housing Plan was supposed to bring improve the affordable housing situation by protecting existing tenants in the city, instead rental control is proving to hurt supply because developers do not want to build now highly regulated and protected rentals that are not as profitable in the short to medium term as major condo construction is.

Condo market is hot, and supply is insufficient

condos sold out

New legislation and controls from all levels of government will add pressure to developers and will impact supply. Demand remains strong because of a stable economy and higher immigration. All of these factors will continue to affect the supply constraints within the market considerably in a way that adds to the problems.

Interest Rate Increase Is Imminent

Interest Rate Increase Is Imminent

higher interest rate sign

Prepare for another increase in interest rates on Jan. 17th, the date of the Bank of Canada’s next monetary policy announcement (decision on rates). It is Tembo’s prediction that the possibility of another hike from 1% to 1.25% is extremely high. While it is possible that the Bank will hold off on a hike until later, given the recent release of some important economic statistics, the likelihood of a hike is sky-high. Economists, bankers, and the media are all anticipating a hike.

interest rate increase

Low unemployment is the likely precursor to a hike

  In December of 2017, the Canadian economy added 79,000 jobs, lowering the country’s unemployment rate to 5.7%, the lowest in over 40 years. Every region of the country added jobs, with most of the growth in Quebec and Alberta. Most of the jobs were full time and private sector, another sound aspect of the increase. More jobs will increase spending and will further add pressure to inflation, which is creeping up, albeit very slowly. The consensus among experts was that the Bank of Canada would wait for the latest employment statistics before making its decision and essentially every economist was amazed at the sheer number of jobs created. The Canadian dollar surged to almost 81 cents on the strong news.

CDN Dollar rate

Job market is booming

The sectors that are seeing the most job creation are services and manufacturing, public sector job growth which was strong in 2017 is beginning to decrease. Across the country, job numbers are growing and there is a growing diversification away from construction and energy related jobs which is a positive sign. January jobs numbers will be interesting as they will reveal if so much of the reduction of unemployment was seasonal due to the holiday season. Either way, higher interest rates will make it more expensive for Canadians to acquire mortgage debt, especially first-time buyers.

unemployment rate

New Year’s Blues For Toronto Real Estate And Our 2018 Market Predictions

New Year’s Blues For Toronto Real Estate And Our 2018 Market Prediction

Stress Tests Now Online

Jan. 1, 2018 marked the beginning of a much tougher regime of stress tests on first time homebuyers, putting more pressure on them to prove their ability to handle huge mortgage debt. Combined with other government measures, the conservatism of Canada’s banks and projected long term incremental increases in interest rates, first time buyers will undergo historically unprecedented scrutiny to qualify for what will be massive mortgages. This is especially the case in expensive, in-demand markets.

stress test online

Foreign Buyers will still trickle in, are mostly Chinese

The introduction of 15% foreign buyer taxes in Vancouver and Toronto has proved to be a strong disincentive to foreign buyers and had downward pressure on prices. However, high-income foreign individuals will continue to purchase real estate in Canada due to a perception of stability and long term value and our openness to foreign investment. They will not be dissuaded by a 15% tax. A recent report by the Globe & Mail showed that over 70% of foreign buyers are Chinese, with the second largest group being Americans. It also showed that the real number of foreign owned property in Toronto is higher than official reports. The same report outlined that foreigners are paying 40% more on average than domestic buyers for property.

chinese investors

Market Prices And Dynamism Is Damp Compared To 2017’s Blistering Highs

But prices and demand will remain healthy over the long term. The condo market is seeing continued double-digit growth and demand and many experts believe it will continue to drive health and growth in the market. November condo prices rose 17%, and yet their affordability compared to detached homes or townhouses is attractive, especially for heavily scrutinized first-time buyers.

condo construction

Interest Rates Are Definitely Going Up in 2018

If there is one prediction Tembo will make with absolute confidence it’s this. Central banks around the world are entering a more hawkish, or conservative mentality and are all raising rates. Tembo encourages its blog readers to research the Bank of International Settlements (BIS), or the bank of central banks. This elite international economic institution lays the framework for central bank operations and has released numerous reports outlining its belief that higher interest rates are a must. The Bank of Canada will be eager to raise rates early this year as the Federal Reserve has already done so before the end of 2017. The era of ultra-cheap money is beginning to end.


pie chart of sales




The Federal Reserve hikes rates and what that means for Canadian real estate

The Federal Reserve hikes rates and what that means for Canadian real estate

Janet yeLLE

On Wednesday of this week, Federal Reserve Chair Janet Yellen, in her final act in the job, raised the benchmark interest rate from 1% to 1.25%. President Trump has made it clear that he intends to replace Obama appointed Yellen with Jerome Powell, an investment banker and former corporate lawyer who is a Federal Reserve Governor. Yelled cited strong economic indicators, growing employment, and a roaring stock market as reasons for the increase, suggesting the economy could absorb the now slightly higher cost of money.

US Fed: Yellen Is Out, Trump’s Pick, Powell Yet To Be Confirmed

Jerome Powell

President Trump made it clear throughout the 2016 Campaign that he saw Yellen as being too partisan (too Democratically aligned), and was consistent in voicing his desire to replace her. His nominee Jerome Powell is yet to be confirmed by the U.S. Senate, but is considered to be an uncontroversial, establishment figure but who is more aligned with the Republican party, having worked in the George H.W. Bush administration in the 90s and clerking for a former U.S. Republican Senator as a young law school grad. Powell will almost certainly be confirmed as the next Federal Reserve Chair.

Bank Of Canada: Rates Increase Likely In 2018

Bank of canada

As Canadians, it is good of us to know a bit about the man who will effectively be running the U.S. economy soon. With interest rates increased one last time finally before the end of the year in America, it is highly likely that the Bank of Canada will follow by increasing rates sometime early in the new year, as long as our national economic indicators remain strong. The Bank of Canada keeps a very close eye on interest rates in the U.S. If rates increase in America, the value of the U.S. dollar goes up, putting downward pressure on our dollar. The Bank of Canada cannot allow our dollar to depreciate excessively as it will increase inflation and prices for Canadian consumers.

If the Bank of Canada increases rates again early next year it will lessen dynamism in real estate and will magnify pressure on prospective buyers by making fixed rate mortgages more expensive, especially in tandem with tighter mortgage rules.

Tembo is keeping a close eye on the Federal Reserve; what happens in D.C. has a huge impact on Canada and Canadian real estate.

Bank of Canada holds its ground despite surging economy

Bank of Canada holds its ground despite surging economy

Yesterday the Bank of Canada held firm and its very recent change in tone and policy by confirming it would hold its benchmark interest rate to 1%. The Bank increased rates twice in quick succession, once in July, as the housing market was searing hot in some parts of the country, and again in September, after a wide spate of government measures had by then significantly cooled prices and demand.

Bank of Canada Headquarters

The Bank offered no hint as to when rates would be raised again and this week’s decision is the final rate decision for 2017.

We will have to wait until next year to wait and see for further hikes. Some market watchers were expecting a hike as strong economic activity, robust GDP growth, and very high employment growth were all recently reported.

The most recent employment numbers are off the charts, with 80,000 new jobs being created in the month of November – market expectation was 10,000 new jobs. Ontario generated the lion’s share of these jobs (44,000).

The national unemployment rate hit a 10-year low because of these gains, falling to 5.9%. in Quebec, unemployment has hit an all-time record. Unemployment should continue to fall as retailers add some more positions for the holiday surge before year end. Hourly wages are also up just under 3% nationally, an unusually big increase.


Canada unemployment chart

The best piece of news is that 37,400 manufacturing jobs were created. These are solidly middle-class, high paying, productive positions that Canada has generally underperformed in creating.

Usually, central banks respond to strong figures like these by raising rates in fear of higher inflation from more spending and more borrowing. The Bank of Canada is internationally recognized and renowned as being extremely focused and hawkish on meeting its inflation targets. The broader market expectation is that further rate hikes will be on the table early next year if wage, employment, and GDP growth continue their robust increases.