Comments on: Toronto Condo Demand Outpaces Vancouver Real Estate Peak

By: Toronto Condo Demand Outpaces Vancouver Real Estate Peak | The Massey Tower

Toronto Condo Demand Outpaces Vancouver Real Estate Peak | The Massey Tower — Wed, 21 Sep 2016 13:56:57 +0000

[…] Toronto real estate demand has been strong, and the condo market was no exception. According to the Toronto Real Estate Board’s (TREB) most recent statistics, buyers plowed into the market sending prices to dizzying new heights. Despite bank warnings over an overheated condo market, demand exceeded Vancouver’s real estate frenzy. For more please click here […]

By: Jon

Jon — Sat, 10 Sep 2016 15:59:00 +0000

Most of those are bachelor condos – household income will be less, lets say $60K max, so it might be around 7x income – not 3x average that’s not accurate.

By: Scott Ingram

Scott Ingram — Fri, 09 Sep 2016 20:39:09 +0000

I don’t think it’s correct to use the absorption rate as a proxy for “demand.” Absorption rate shows the relationship between demand AND supply (units purchased and available units, respectively). A higher the absorption rate just means homes are selling more quickly, i.e. they’re getting absorbed by buyers quicker (hence the low average Days On Market).

For example, if buyers purchase 100 condos this month and 100 condos next month, the DEMAND doesn’t change. If there are 200 units available this month and 250 available next month then the SUPPLY is different and the absorption rate falls (from 100/200 = 50% to 100/250 = 40%). That falling absorption rate would indicate that places are on average moving more slowly, which makes intuitive sense.