In the wake of the Toronto home prices bubble burst, some real estate agents have started looking at new ways to increase their sales volumes.
But, many are wary of the long-term consequences of trying to turn around the condo and housing markets and are warning of the potential for real estate bubbles to re-emerge.
The real estate industry is experiencing its biggest real estate market downturn in decades and the average Canadian house price is now at a record low.
But the real estate bubble burst was a momentous event, sparking an avalanche of speculative buying and speculation.
It’s also become clear that the condo boom is not just about prices.
The real estate sector is now also experiencing the biggest real-estate downturn in the modern history of Canada.
“The condo boom has been the most expensive housing market in Canada for the past 10 years, and the number of Canadians owning a condo is expected to rise by 50% to 70% over the next decade,” said Stephen J. Smith, the head of real estate research at realtor.com.
According to the latest statistics from the National Association of Realtors, the number and total sales of condos increased by more than 3,000% in 2017 compared to the previous year, and by nearly 2,000 percent in 2016.
In comparison, the total sales rate for all housing market sectors in Canada declined by over 1,000%.
“This is a very significant market, it is a growing market and it is going to grow again in the coming years,” Smith told Al Jazeera.
“If the market continues to be under-priced, it’s not a very good place for the industry to be.”
There are a lot of concerns about the housing bubble, and what we are seeing right now is just a correction of what we thought would be a strong market for realtoring.
“Smith said there has been a shift in the way the realtor community has been dealing with the condo market, focusing more on listing properties in urban centres.”
This has created a lot more space for realtor to invest in the suburbs and to put more resources into the realtor market,” he said.
In a country that is renowned for its affordability, some condo owners are already worried that the boom in condo sales is just the beginning.”
It will be a big challenge for us to keep the growth going,” said one realtor who did not want to be identified.”
When people start to see what’s going on and realize that condo prices have gone up by 70% in the last five years, the whole real estate business will be in turmoil.
“That’s why people are really wary of what is happening with the market right now.”
But the real-tor industry’s concerns are not entirely theoretical.
In the past five years the average price of a condo in the Greater Toronto Area has increased by nearly 60% to $1.2 million, and in the first three months of 2017 condo prices in the Toronto area were up by almost 80%.
But Smith said it’s hard to believe that the overall trend of price increases in the condo sector will continue.
“They will continue to rise and continue to do so, but I don’t think that we will see a dramatic correction anytime soon,” he told Al jazeera.
“I think we will continue with this trend.”
He added that the Canadian realtour industry needs to be prepared for this market to grow even further in the years ahead.
“Realtors need to think about how to adapt their business model and their sales tactics in a time when it’s clear that demand is outstripping supply,” he added.
“For example, you might have a good realtor in your neighbourhood, and a new competitor has come along and they are offering their service in the neighbourhood.”