The Morrison Report

A Brian Torry interview, General Manager, Bosley Real Estate Ltd., Brokerage who discusses the Toronto Real Estate Market. It’s strength and the unprecedented increases we have seen in 2016. Brian also highlights why real estate is important to him.   Transcript Davelle:              On today’s episode we have Brian Torry, he’s the general manager of my brokerage, Bosley Real Estate Ltd. I wanted to have him on today’s show to discuss the state of the market. Brian, what do you think is going on in the Toronto real estate market right now? Brian:                  That’s a pretty big question. Davelle:              It is. Brian:                  That’s a very big question. What’s going on is just a more intense level of what’s been going on for years. It’s a lack of supply. It’s a huge lack of supply. Supply’s even tighter than it’s been over the past few … and absolute huge demand for real estate in Toronto. When those two things happen, we get what we have and the market is active, very active, I would say is a great way to describe it. Davelle:              Absolutely. Why do you think our supply of real estate is so low, that’s causing these prices to increase so much? Brian:                  It probably started with legislation that came out of the government, including the green belt legislation which stopped the city from growing [inaudible 00:01:39]. We have a lake in our south, and the provincial government has passed legislation telling Toronto it has to grow every year, by 50,000 people. So there’s this process going on where Toronto’s growing but it’s limited in where it can grow. There’s great in-migration to Toronto, and there’s a demand for housing, a huge demand for housing. That’s a big part of it, but also the lack of supply coming to market is that people are starting to stay where they are. They’re renovating, they’re not making a big move. The transactional costs of moving are fairly substantial, with two land transfer taxes, you’re going to pay professionals to help you make your move. We’re starting to see some families, instead of doing that move up out of your first home into your second home, are starting to renovate it, re-do the basement, [inaudible 00:02:25] a basement, do an addition, extra washrooms; staying with their space and improving it instead of going out and looking for the other one, because those other ones are going to be pretty expensive. Davelle:              Yeah, that makes sense. One thing I find interesting with the double land transfer tax that we have in Toronto is that even in places like Richmond Hill or in the 905 area, there still seems to be a shortage of supply in those areas where they don’t even have the double land transfer tax, but it still seems to be having that same supply problem. Brian:                  Yeah. That’s a direct relation to people not being able to afford in Toronto, that they’re moving out [inaudible 00:03:00] the suburbs. It’s a funny thing, we talked about this the other day. When I started in real estate 16 or 17 years ago, there was this belief that the young people didn’t want to live in the suburbs; that was their parents’ dream. They wanted to move into the city. There was a great influx of people moving into the city and buying condos. Now we’re at this point where the young people can’t afford to live in the city anymore. They’re starting to go out, and you’re starting to see a lot of really young people going to Oshawa or could be Ajax, out into the 905. They’re used to bidding wars, it’s not unusual for them in real estate, and the real estate is much more affordable out there, so they’re going out and getting it there. Davelle:              Yeah, that makes sense, but there’s also this move for some people to decide to have a family in a condo as well too, just to stay in the city and keep their costs down. What do you think the longevity is of people raising families in condos? Brian:                  It’s all over the world, people raise families in condo. We have this strange belief in North America that we should all somehow live in a giant penthouse, have a giant lot out somewhere, I don’t know where; but the world all around us, people raise families in condos. We’ll start to see a lot more of that in Toronto, and the way we’ll see it more likely … since they’re not building big family-sized condos … is we’ll start to see people buying the condo next door and combining them together so that we’ll end up with bigger spaces for people to raise kids. That’s coming, and there’s nothing that’s going to stop it. People like living downtown, they like being there, and condos are going to be a way of life for raising children for years to come. Davelle:              Yeah, that makes a lot of sense. Do you think the city could do more to increase the supply of housing, maybe not have so many regulations when it comes to laneway housing, things like that? Brian:                  Yeah, it’s hard for the city to think outside the box. Building condos is something they’re used to, they know that they can increase their housing stock doing it that way. When they’re forced to think outside the box, it’s a little more difficult. I see it with laneway housing, I see it in making it easier for two families to buy one house and divide it, share that ownership in some way, and that’s not an easy process to the city. I see that there’s a lot of opportunity out there. The city doesn’t seem to be taking that opportunity. It seems much easier to go the condo route at this point for them. Davelle:              Right. One of the things I notice in Montreal is that they do have houses that essentially have been broken