Sales increased by 5% and prices were up by 7%. Rental rates increased by $100 per month…<strong>

The Bank of Canada, along with several economic advisors had forecasted lower sales and lower prices. Many experts try to make residential real estate far more complicated than what it really is. Real Estate is mainly about supply and demand.  Toronto continues to be heavily supplied to a heavy demand. When supply and demand are equal the economy is said to be at equilibrium. At this point, the allocation of Real Estate is at its most efficient state.  However we remain in this state whereby properties are being sold at fair market value and based on current inflation rather than artificial inflation.  The long and the short of it is, providing our government does not increase interest rates, the average price minus the average deposit should equal the carrying cost.  These ingredients have helped sustained a healthy growth in the value of Real Estate, as investors can make a healthy return and risk free.  This also explains why the Toronto Real Estate Market has outperformed all other markets in North America based on the number of units sold as opposed to the price increase.  For those who understand these general accounting principles, also understand that this cycle is sure to break.  Increased rates lead to inflation which leads to increased pricing.  Stepping away from the accounting principles for a moment, let’s also consider other exterior factors that can lead to artificial pricing.  The best banking structure of the G-20 countries, being a resource based country, lowest debt country, increased immigration statistics, baby boomer stats indicating the commencement of an increased interest in condominium living based on current age and fewer remaining infill sites remaining to be zoned for residential accommodations.  A correction is imminent. Artificial inflation to increase the value of Real Estate will be upon us over the next 5 years.  Ownership of property will be thought and not a right.
Rental Commentary The rental market continued to be very active, index rents increased by just 0.8 per cent in the first quarter of 2011, from $2.09 per square foot, to $2.11 per square foot.
The average condominium unit leased in Q1-2011 was 800 square feet with an average rent of $1,686 per month.

With more than 9,000 units from 44 new home projects the market has broken multiple records. New condo sales: 9,455 units sold in Q2, topping the previous record high of 6,997 set in Q2-2007 by over 35 per cent. Q2-2011 also set records for the number of active projects. There have been 24,731 new condominium sales over the past 12 months, topping the previous record high of 22,654 set in Q4-2007 by 9 per cent. There were 39,196 condominium units under construction in the Toronto CMA in 153 projects in Q2-201. It’s clear that pricing did not go up as much as it should have, which would have been an indication of a real estate bubble. The market is very healthy, as condominium resale activity remains strong, and results show that condominium rents have improved over the first quarter.”
Both the new and resale condominium markets saw increases in index prices, with unsold pricing in the new condo market rising from $529 psf in Q2-2010 to $552 psf in Q2, an increase of 4.3 per cent. The resale index price increased from $370 psf to $391, or 5.7 per cent. The index rents improved 5.5 per cent year-over-year. A record 7,815 units
registered in Q2-2011, nearly as many as the previous three quarters combined. Looking ahead, 25,000 new condominium sales and 17,000 resale transactions for 2011.