The majority of Toronto’s real estate investors are looking to cash in. A Toronto Regional Real Estate Board (TRREB) survey, conducted by Ipsos in Fall 2020, shows most investors are looking to sell in the next year. This is a record number considering cashing in on their gains. It’s not just the pandemic though, only about one-third said the pandemic had any bearing on their decision.
Over Two-Thirds of Toronto Real Estate Investors Want To Sell
Just over two-thirds of Toronto real estate investors are looking to sell this year. The survey found 67% of investors were either “very likely” or “somewhat likely” to sell within the next year. This number is up slightly from the 66% in 2019, and the 61% in 2018. Intention and reality tend to be two different things though. In many markets, investors don’t sell until they see returns pull back a little. Now that rental arrears rates are rising, and condo apartment prices are falling, it might be time.
Likelihood of Listing Investment Property For SaleThe percent of suvery investors “very likely” or “somewhat likely” to list their property to sale in the next year. Source: TRREB, Better Dwelling.
About A Third of Investors Are “Very Likely” To Sell
Of those that are looking to sell, just under half are “very likely.” In Fall 2020, 29% of investors surveyed said they were very likely to sell in the next year. That number was a slightly higher 30% in 2019, and a significantly lower 22% in 2018. This would provide a significant boost of inventory, considering the number of investors.
The Pandemic Motivated 37% of Investors To Sell
The pandemic didn’t motivate most investors, but it did have an impact on about a third. The survey found 51% of investors had no change in listing intention due to the pandemic. Another 37% said they were more likely due to the pandemic. The remaining amount said they were less likely to sell. It’s not totally clear which aspect of the pandemic is motivating. The biggest impact off the top of my head would be lower revenues, or seeing peak values.
The Pandemic’s Impact On Investors Selling In TorontoThe impact the pandemic had on investor selling intention over the next year. Source: TRREB, Better Dwelling.
Investors selling is very different from owner-occupied homes selling. Owner-occupied units listed for sale tend to come coupled with another buy. The buyer removes inventory, as well as adds, leading to net-zero. Investors aren’t necessarily buying another unit afterwards. The capital may be reinvested at a different time, or in a different market. They may even invest in a totally different asset class. An uptick of investor selling can therefore have a bigger impact on sending inventory to market.
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