Welcome to Properties Ontario’s weekly update. Our team goes through numerous articles and create summaries for you! Please do not hesitate to contact me if there are any topics you would like to discuss further or if you have a general question about buying, selling, or leasing residential or commercial space. For current listings in the marketplace, check out our website www.propertiesontario.com
GTA Commercial Space Report
Toronto Real Estate Board (TREB) reported about 7 million square feet of industrial, commercial/retail, and office space being leased through the MLS system. This figure was for the third quarter of 2018 which represents a 24.9% increase from the same quarter in 2017. Industrial space accounted for 75% of the leased space and had a lease rate of $7.80 per square foot which is an annual 11.3% increase. The average office lease rate was up 8.2% to $15.20 during the third quarter of 2018. Commercial/retail lease rate went up 65.9% but largely due to high-end space being leased. The number of sales were down from 270 to 189 with prices being largely flat for industrial, decreasing for offices, but up substantially for commercial/retail space.
GTA Detached September 2018 Statistics
- GTA Statistics (September 2017 comparison in brackets)
- Benchmark Price: $914,200 (-1.63%)
- Median Price: $845,000 (+1.93%)
- Average Price: $1,342,363 (-0.6%)
- Sales: 2,829 (+2.7%)
- New Listings: 8,727 (-3.13%)
- Sales to New Listings Ratio: 32.42 (buyer’s market)
- Inventory: 12,042 (+8.99%)
- Months of Inventory: 4.26 if no new listings came on the market
- Toronto Statistics (September 2017 comparison in brackets)
- Benchmark Price: $1,105,300 (+1.04%)
- Median Price: $1,045,800 (+5.7%)
- Average Price: $1,008,361 (-1.4%)
- Sales: 665 (+4.6%)
- New Listings: 2,009 (same)
- Sales to New Listings Ratio: 33.10 (buyer’s market)
- Inventory: 2,317 (+7.07%)
- Months of Inventory: 3.48 if no new listings came on the market
PwC Real Estate Trends Report for 2019
The PwC real estate trends report which was recently released brought up some interesting trends for next year. Developers, investors, lenders, and other real estate experts said that land supply is the top concern heading in to 2019. The government hasn’t done much to address the supply side as much as they have done to limit demand. Therefore with interest rising and tariffs on steel, it will cause a further strain on supply. The commercial sector will have strong demand for multi-family units and for industrial space due to the growing cannabis industry. In the retail sector, numerous companies will have to figure out a way to reinvent themselves due to competition from e-commerce. This in turn will create demand for storage space. On another note, co-working space is driving up demand in the office sector and is projected to make up 30% of corporate real estate portfolios by 2030. As for technology disruptors, drones, autonomous vehicles, cybersecurity, and construction technology were voted as the top disrupters in the market in 2019.
BDO Canada Report on Debt
A report by BDO Canada found out that a quarter of Canadians with debt are so overwhelmed they don’t know what to do. The average non-mortgage debt is $19,977, which essentially represents the amount of consumer debt. The survey also found out that women find it harder to save for retirement (73% vs 65% for men), save for a major purchase (74% vs 64% for men) and afford transportation costs (43% vs 36% for men). Women also carry a heavier debt load then men (52% vs 45%). Nearly 1 in 5 millennials say they are delaying starting a family due to their current debt level. It also found out that 18% of Canadians have a child 18 or older still living at home. An astounding 76% of those families say it is because it is too expensive to rent.
Building Permits Across Canada
Canadian municipalities issued $5 billion worth of residential building permits in August which is 4.4% lower than July. This represents a 3rd consecutive month of declines however we are $3.5 billion higher than August 2017. Overall permits issued for single family dwellings fell 5.2% monthly to $2.2 billion while overall permits issued for multi-family decreased 3.8% to $2.7 billion. August had a total of $8.1 billion worth of building permits as non-residential accounted for $3.2 billion (an annual increase of 8.8%).
Condo Rental Rates in the GTA
Condo rents in the GTA increased 9.4% annually on a per square foot basis in the third quarter of 2018. The current rent per square foot is $3.26 according to Urbanation. The average space leased declined to 731 square feet compared to 744 square feet in Q3 2017. This has caused the average monthly rent to increase 7.6% annually to $2,385. Number of lease transactions reached 8,186 for condos representing an increase of 5% year over year. Purpose built rental construction starts (826 units) declined sharply when compared to the 2nd quarter of 2018. Total inventory of purpose-built rentals under construction reached 11,172 units (highest level in more than 30 years and 56% higher than a year ago). Next year, there is an expected 28,163 apartments reaching completion including 4,419 purpose-built rentals units.
Canadian Debt Balance for August 2018
The balance of household debt reached $2.145 trillion in August 2018. This marks an annual growth rate of 3.72% which is the slowest growth since 1983. Total outstanding mortgage debt reached $1.52 trillion in August displaying an annual growth of 3.61%. This is the slowest growth since July 2001. Outstanding consumer debt reached $618.32 billion in August which actually grew 4% annually. Overall we are seeing a slow down in the credit cycle which was bound to happen with rising interest rates.