Toronto’s top real estate experts on their predictions for the year ahead

Our panellists for our 15th annual Real Estate Roundtable make their best guesses on what’s to come for Toronto’s market

Our 15th annual Real Estate Roundtable, featuring 10 of the city’s top experts on the housing market, was an event to remember. The virtual event had over 500 people in attendance, and a popular question every year is what these experts predict for the year ahead. Read along for their best guesses, or listen to the roundtable podcast, available below or anywhere you listen to podcasts.

POST: We’re going to have to move on to our final, crystal ball question. What are your predictions for the year ahead?

BRIAN GLUCKSTEIN: I see the market staying extremely strong, the supply very limited because I’m seeing more of our clients are not moving, and they’re staying put where they are, and they’re working on the homes that they have and the condos that they have. And it’s getting harder because they’re buying multiple homes. And great for our business, but it’s also depleting the inventory in other areas because a lot of these houses are staying empty a lot. But a strong market and the appetite to own a house — one, two or three houses, investment houses like we’ve never seen — it is just accelerating, and there’s no end in sight. So next year and the year after, there’s going to be very little change, except for costs going up.

POST: Michael London?

MICHAEL LONDON: The end to COVID. You heard it here first. That’s it.

BRIAN: From your mouth.

MICHAEL L.: From my mouth. I think, overall, we have a number of projects that are coming up, that are high-end, luxury projects. I think we’re going to see a lot more of that happening. I think the market is still strong, as Brian was saying. I think that, when it comes to, given COVID, those who … in the past, we had our certain needs that we wanted, and the wants were sort of luxuries, and now those luxuries are must-haves. I think that’s what we’re going to find more of happening. Those must-haves, the luxuries, the must-haves, that’s what we’re going to see more of in the coming year.

POST: Jennifer, any predictions?

JENNIFER KEESMAAT: Well, I always think this is a dangerous exercise. And I do remember two years ago when you asked us this question, and COVID was just starting to hit, and I think almost all of us had no idea, and in fact, a lot of people were predicting a downturn. Someone had just come out and said, “oh, you know, the market is going to go down by 20 per cent.” But I look at the data around supply. I always listen to what Benjamin has to say around where interest rates are going. I think you have to take those two things together. The demand isn’t going anywhere, and the supply isn’t going to be produced fast enough. I hear what Brian is saying about people holding on to properties. So I think it’s going to continue to be very strong for at least another 12 months. As long as we don’t see some really drastic move around interest rates, as long as it’s baby steps, there might be … If there is a little bit of cooling, it won’t be sustained because over the long term … if you look over a five-year period, we will continue to be a wonderful place to live, and we will continue to have a shortage of supply, and we simply cannot build fast enough. No matter what happens, we won’t be keeping up with demand. Although interest rates are a really big variable.

POST: Michele, what about you?

MICHELE ROMANOW: Yeah, I think this is going to really depend on interest rates. I think what a lot of the panel has said: that it doesn’t look like we’re solving a supply problem. And I don’t think we are going to change the demand problem with the amount of immigrants. I genuinely feel like people are going to be living in very different places and wanting very different things in their homes. You know, I’ve now decided I cannot stay in a hotel room with my partner that’s not two rooms because you cannot do a call with someone else. Like, this is very new. This was never something I think any of us thought about before: that we need literally enough call rooms for people because you cannot work from home and listen to someone else’s Zoom call, that you literally just want to poke your eyeballs out. So I think we’re going to change the way we build homes and the things we want in those homes.
And I liked what people said about, you know, people are creating new amenities. But look, I think that the demographic and the tech demographic is going to be working from home for a very long time. They’re going to want different things in those homes. I don’t know if all those are going to be in Toronto. I still think Toronto is a great city, but we’re going to see a lot more people spreading out of here for part of the year, and maybe that will create some interesting opportunities and then a lot more founders. And I hope this version of the great resignation we’re seeing is some founders that go into, I think, a lot of the problems we’ve identified, which is there’s got to be ways to create supply that aren’t just, you know, regulating that creation of supply, which creates its own series of problems or it could at times.

So I think it’s going to be another very interesting year. And I always enjoy this panel because it was my first moment where we were like, “Is COVID going to happen or not?” And it’s been interesting to see how both right and wrong a lot of our predictions have been over the years.

POST: Benjamin?

BENJAMIN TAL: Yes, intercessory-wise. And this means that the housing market should slow down a little bit. And that’s good because I don’t want to see another 20 per cent increase in the average house price next year. I really don’t want that. So we need to put it under control. And I think that the higher interest rate is growing slowly will slow the market. But I agree with Jennifer, the market is so undersupplied that the fundamentals are so strong. So you’re not going to see a decline in prices, but you’re going to see them moderating. And that would be a very good thing.

POST: Barry, go ahead.

BARRY COHEN: Yeah. So tight inventory levels expected to characterize 2022, prices will rise. There will be a small correction as interest rates rise but it will be temporary. I don’t think it’s going to bring on a full boom correction because there’s been too much money coming into Canada and not enough supply. What we’re going to see is … the domestic buyer fueled this market of ’20 and ’21, and now we’re going to see the foreign buyer come back. And I think that’s going to sustain the price escalations that we’re seeing. Thank you.

POST: Let’s go to Michael and then Odeen.

MICHAEL KALLES: Firstly, I’m flattered to be included again on the panel. So, thank you. You know, it’s funny, I did a small study years ago and found out that anyone who bought and held real estate for seven years, made money, and that’s for over half a century. So if you think about it for a moment, when you walk by homes or condominiums and you think to yourself, “Where are your regrets?” It’s not for what you bought. It’s for what you didn’t buy. And that’s really where I see everyone wanting to get into the real estate market at last.…

ODEEN ECCLESTON: I hope that with the interest rising a little bit, it’ll cool, but I don’t think that it’ll be significant, but at least it won’t be the unsustainable growth that we saw in this past year. But I think unless we can somehow do something to incentivize sellers to sell instead of just really collecting properties — which, I mean, a lot of us are guilty of because, again, it just makes sense — but I think with the increased sort of information being widespread about the advantages of owning multiple properties, people are going to be hard-pressed to sell, and then that’s like a fundamental part of the inventory issue that we’re going to continue to have.

POST: Let’s go to Hilary and then we’ll finish with Jeanhy.

HILARY FARR: Well, I have really been astounded by the fact that we have all of these extraordinary buildings downtown that are now empty commercial buildings. And I’m wondering at what stage — when we’re talking about a lack of supply, and Jennifer is talking about the New York model of rentals where the majority of people in New York actually don’t have an expectation of ownership — [people] have a hope for a good apartment at an affordable rent, knowing that they do have protections, which are there for the tenant without completely being one-sided and making it not work for the landlord.

I think if we can get to that mentality in Toronto, I think it would solve an enormous amount of the housing issues, if we can get the mindset to change from there being a sense of entitlement to ownership of properties within what is a major city. It isn’t like that in most major cities. It just isn’t. People rent. And there are all these magnificent buildings in the core of our city just sitting there empty. And will they or will they not ever be populated the way they were before? Will it make sense to bring people back simply because the buildings exist? Can those buildings be evaluated in what it would take to turn them from commercial into residential? I just think it’s a massive possibility of solving a lot of issues. No idea what really is going to happen. Nobody does. COVID will end. Will that bring everybody back to the office in droves? I’m not so sure.

POST: And Jeanhy, the final word.

JEANHY SHIM: Well, I think I agree with my fellow panellists. I think though we have a tale of two markets here, I think on the private sector side or the ownership side. I agree with what everyone has said. But I’m optimistic. My prediction is optimistic that perhaps we’re at a tipping point this year, where, finally, we are going to see people more open to new ideas on how to increase affordable housing, rental supply in particular. Perhaps we’re at that tipping point. COVID exacerbated a lot of the issues that were already there. So that’s my optimistic prediction for the upcoming year: is that financial institutions, investors, private investors, philanthropists perhaps will be a bit more open to some new ideas and new approaches to tackling some of the other affordable housing issues in our city.

We are mindful that the pandemic has severely impacted many people across our city. With that in mind, a donation has been made to our sponsor, The RE/MAX Collection’s charity of choice, the Children’s Miracle Network. Post City Magazines and the Rotman School of Management have also donated a further amount raised from ticket sales to The Centre for Women and Trans People at the University of Toronto on behalf of our panellists and you, our incredible readers.

Click here for the full real estate roundtable.

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