That’s the big question, isn’t it? Why aren’t there more homes on the market in central Toronto? At least that’s the question buyers have been asking for the past 15 years or so. Because if there were more homes on the market, there wouldn’t be so many more buyers than sellers, there wouldn’t be so many bidding wars and prices wouldn’t keep rising.

When I first got into the business in 1992, I remember reading that the average homeowner moved every 3-5 years. Now that I’ve been in the business for so long, I question the accuracy of that statistic. My very first clients are still in the home they bought in 1992. My second and third clients have each moved exactly once since buying their homes in 1992. It’s true that my clients made sure to buy the right homes so they wouldn’t have to move for a while and it’s possible that people in central Toronto move less frequently than the average homeowner, but I think there’s another factor at play here.

I think that people have been moving less frequently in central Toronto because it’s expensive to move. House prices are high and the costs associated with moving, such as land transfer tax, real estate commission, legal fees, moving costs, etc., are also high. (Disclosure: I haven’t done an exhaustive study to prove this theory and I don’t have any statistics specific to central Toronto to back it up so it’s based on personal observations and conversations with people who are or were thinking of moving.)

Here’s an example: A little while ago I sat down for a chat with Julia (not her real name). She and her husband, Dan, were thinking of moving from their North Toronto semi-detached home to a detached home with a main floor family room because they wanted a little more space. The price difference between the two homes would’ve been between about $200,000 and $350,000. The costs associated with moving would’ve been in the neighbourhood of $100,000 and that wouldn’t include any work they’d want to do to their new home.

On the one hand, they liked their location and could’ve spent $200,000 or so to renovate their home and get the space they wanted. On the other hand, it would cost them an additional $200,000-$350,000 plus $100,000 to get the detached home they preferred. Renovating their current home would involve moving out and dealing with a renovation. Buying a new home could involve a long search without a guarantee that their new home wouldn’t require renovating.

As far as I know, they haven’t made a decision yet, but if I had to guess, I’d say they’re leaning towards staying where they are and renovating.

If the cost of their new home was less and/or if the costs associated with moving were lower, they might be more inclined to move, but that’s not the case. I can’t tell you how many people I’ve spoken to over the past several years who’ve said “We love our neighbours, our neighbourhood and our kids love the local school. It’s too expensive to buy the home we really want so we’re going to renovate or add on to our current home instead. It won’t be our dream home, but we’ll be happy there and it makes financial sense to do this.” (To help you decide if YOU should renovate or move, check out Should You Renovate or Move?)

Because of the expense involved with moving, not only have we been dealing with a finite housing supply in central Toronto, but we’ve also been dealing with a decreasing supply of homes coming on the market as more and more people decide not to move. It’s no wonder that prices have been steadily rising.

As always, if you know of anyone who’s looking for an honest realtor who really knows his stuff and doesn’t pressure his clients, Please Don’t Keep Me a Secret. I really appreciate your referrals. Thanks for reading and don’t be shy if you have any questions or comments!