The Urban Land Institute and Ernst & Young recently released a report that ranks the attractiveness of downtowns and other “global” business districts (GBDs) of major global cities.
In terms of overall rankings, the GBDs of London, NY, Tokyo, and Paris take the top 5 spots (London showing up twice with City and Canary Wharf), with Toronto not too far behind at #11.
The report also breaks down the overall rankings to show the particular factors that together make up a successful GBD; they are:
Ability to attract and retain talent
Proximity to markets, customers, and partners
Quality of the urban environment
Local and global influence
Bespoke and innovative real estate supply
Toronto ranks within the top 5 for talent and urban environment quality (and #6 for real estate supply). So the City’s Downtown clearly punches above its weight class and can stand toe to toe with some of the world’s economic heavy hitters (if population, # of employees, GDP were compared).
I had two thoughts when reviewing this report:
Some cities like London and NY have more than one major business district (London with City and Canary Wharf, and NY with Midtown and Financial District) that is competitive with the world’s largest business districts. Tokyo, Paris and Seoul similarly have multiple economically powerful employment nodes throughout the region (although not identified in this report). Toronto too does have several employment nodes, but none of these perform at the level the City’s Downtown does.
The sheer breadth of factors and qualities that make downtowns and business districts successful – there is no one silver bullet or one key element that drives that success. The closest thing could be an extensive, connected and reliable transportation network/system. But that alone will not drive the success of a downtown or business district. It is a contributor. And growing in importance over the last few years has been the quality of the environment and access to amenities. There is a reason cities like Singapore, Chicago, Sydney and Toronto are ranked among the top 5 in the quality of urban environment factor. One picture of Chicago’s Millennium Park, Sydney’s Opera House or Singapore’s Gardens By the Bay is enough to show the huge value derived from park space and amenities for residents and employees.
The question for downtowns and business districts is now more focused on Covid response, recovery and rebuild, with the short to mid term period becoming the most interesting to monitor.
Following up to my previous posts from a few weeks back on the impact of Covid on Toronto’s resale market (see here and here), I have provided below updates to my charts and some commentary on the state of the market as of the first two weeks of June.
The first chart below shows weekly sales for 2020 (ending on June 9th) with monthly sales for years prior (2019, 2018 and 2017)
What we see is a continued rise in sales over the weeks – a good sign for the resale housing market.
Shown below are monthly prices for 2020, compared to the last 3 years, spread out over weeks
What we see is relatively resilient and stubborn values in Toronto. Although there was a brief dip evidenced in April, prices rebounded fairly quickly. I would caution toward assigning too much weight to these monthly stats because of their volatility, especially now with fewer sales (roughly 55% of sales in May 2020 compared to May of last year).
And finally below I have provided weekly sales and monthly price charts for condos and freeholds.
To summarize, here is what we know so far:
Sales have consistently grown over the weeks – and they may actually reach July levels from previous years if they continue at this pace
Prices bounced back quickly from April and appear quite resilient during the last few weeks
Big jump in freehold sales over the last two weeks
The summer and especially the fall market will be very interesting to monitor, and whether there will be an increase in listings and pent up demand
For now, sales are expected to continue to increase and prices to remain stable
As promised in my post from a few weeks ago, I intended to monitor the resale market amidst Covid. Below are a few charts that update the state of the residential resale real estate market as of May, 2020.
First chart below shows weekly and monthly home sales in 2020 and years prior (to 2017).
What we see is a bit of a rebound in sales from the lows of early April. If you read TREBs latest report for April, you may have noticed a drop in Year over Year sales (and new listings) of over 60%.
The next chart shows monthly prices averaged out across weeks (to line up with chart from above visually).
You will notice that prices are down from the 2020 peak reached during March, but within about the range from previous years for April. In TREBs April report, prices for the region (GTA) were actually up 0.1% year over year,
And the next four charts below display the same information as the charts above, except for condos and freeholds (click to view full image).
Once again, a little too early to tell what exactly will happen, but what we do know so far is:
Sales were hit very hard compared to the same period last year, although we do see a small rebound in the last two weeks. Maybe sales in Toronto hit a floor?
Prices are not entirely predictable at this stage, and not much use looking at it week to week. However, prices could follow similar trends from years prior where they decline seasonally following the spring market.
What happens next? Doug Ford recently extended the State of Emergency until beginning of June – so sales are likely to remain depressed for the month of May (relative to prior years). With lower transactions, average prices are likely to insignificantly change or reduce slightly, but keep in mind, the current average prices are not entirely indicative of the broader market.
I will continue to monitor these trends over the weeks to see how sales and prices continue to be affected by Covid and societal responses in Toronto. Stay tuned for future updates to this post.