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January, 2016

Toronto Real Estate Market Update – December 2015

It’s almost anticlimactic to write about the Toronto residential resale market for December and year end 2015. The anticipation of a record breaking year had evaporated by September. Barring some economic catastrophe, by the early fall it was becoming apparent that the long standing record of 93,193 sales achieved in 2007 was going to fall this year and it did, dramatically.

 

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By year-end 101,299 properties were sold by Toronto and area realtors, and that does not include the thousands of new construction properties that were sold over the same period. The sales achieved in 2015 exceeded the 2007 record by almost 10 percent.

That was not the only new record that was established in 2015. The average sale price for 2015 came in at $622,217, the highest annual sale price in history. It shattered the previous high of $566,624 achieved in 2014. This also represents an increase of almost 10 percent.

The rising average sale price for properties now means that it costs more than $1 Million to buy a detached house in Toronto. In December that number came in at $1,039,638. It also means that a large segment of Toronto’s resale market is now composed of properties with sale prices that exceed $1 Million. In 2015 10,867 properties were reported sold in this category, almost 11 percent of the entire market. In 2014 only 7,364 properties above this price point sold. Similarly $ 2 Million plus sales also increased dramatically in 2015. There were 1668 properties sold in this price point, a 43 percent increase over the 1,168 sold in 2014.

A concern throughout 2015, and one that will impact the Toronto and area resale market at least in early 2016, is the supply of inventory. At year-end there were only 1.8 months of inventory in the greater Toronto area. In 2014 there were 2.2 months, also low.

 

In the City of Toronto there were 2.2 months of inventory at year end. This compares with 2.4 months of inventory at the end of 2014. The larger supply in the City of Toronto is due to the high number of condominium apartments available for sale.

Condominium apartment sales were also a bright spot in 2015. In December 30 percent of all properties reported sold in the greater Toronto area were condominium apartments, almost 15 percent more sales than for the same period in 2014. On average that ratio of sales, between condominium apartments and freehold properties, was achieved every month during 2015. That means that more than 30,000 of the 101,299 reported sales for 2015 were condominium apartments, the bulk of these sales, approximately 60 percent, taking place in the City of Toronto. In the City of Toronto the average sale price for condominium apartments came in at just over $400,000, a long way from the cost of detached and semi-detached homes. Condominium apartments have become the entryway for first time buyers into Toronto’s record breaking market.

Although 2015 ended on a market high, a number of negative economic changes began in December and cloud the horizon as we attempt to peer into 2016. In December the Toronto stock market dropped precipitously, a drop that has continued into the first week of January. The Bank of Canada has reduced its 2016 forecast to less than 2 percent growth, probably closer to 1.5 percent. The west continues to suffer as a result of declining oil prices. As of the preparation of this report oil prices were hovering at $30 a barrel, the lowest they have been in more than 10 years. On the international scene China continues to struggle, with no sign of a change in it stagnating economy. When the Chinese economy slows, commodity oriented countries such as Canada are immediately impacted.

The falling Canadian dollar is both a positive and negative factor in the economy. It clearly makes Canada’s exports more attractive, but conversely it makes buying imported goods more expensive, making life more expensive for Canadians. It does mean that we will not see an increase in the bank rate anytime soon, which in turn means a continuation of historically low mortgage rates. It may be that these low rates, combined with Toronto’s attraction for new immigrants and those migrating from less prosperous areas of Canada, or what has been called the “Switzerland appeal,” may once again power the Toronto residential resale market to another record year .Given the number of properties that sold in 2015, a more prudent analysis would suggest that the Toronto and area market will come off the highs of 2015 and produce sales of closer to 95,000 properties in 2016, which would still make 2016 the second best year on record.

 

Muskoka Real Estate Market Summary – 2015

2015 was a banner year for the Muskoka and area recreational market.  Chestnut Park and its sales representatives were responsible for the highest volume of sales in the firm’s history, surpassing even the exceptional results achieved in 2014.

 

All of the markets encompassed by the Muskoka and area Realtor’s Association produced positive numbers in 2015.  The Association reported 1160 recreational properties sold, 23 percent higher than the 890 properties reported sold in 2014.  Lake of Bays reported 112 properties sold as compared to only 84 in 2014, an increase of 33 percent.  The Haliburton Highlands also reported strong numbers.  There were 320 recreational property sales in 2015, a 30 percent increase compared to the 246 properties sold in 2014.

 

Muskoka’s big lakes, Lake Joe, Lake Rousseau, and Lake Muskoka, have produced increased sales for three consecutive years.  In 2013 there were 223 reported sales on the big lakes.  That number increased to 266 in 2014 and then further increased to 292 in 2015.  Compared to 2013 and 2014, the results achieved are 19 and 31 percent respectively.

 

The bulk of the activity on the big lakes was in the $2.5 Million price range.  An analysis of sales having a sale price in excess of $1 Million indicates that in 2015 there were 100 properties sold in this price category.  This is an increase of 15 percent compared to the 87 recreational properties that sold in 2014.  The average sale price for all recreational properties sold with a sale price greater than $1 Million was $2,560,740.  In 2014 the average sale price was $2,693,322.  This difference in average sale price indicates that there were more lower priced properties sold in 2015 (i.e. closer in value to $1 Million) than in 2014.  For example if we review sales having a sale price in excess of $1.5 Million, the average sale price for these properties sold in 2014 was $3,002,028, but up substantially to $3,245,708 in 2015, an increase of more than 8 percent.

 

Further indication of the strengthening of the big lakes market in 2015 is the time it took for cottage properties to sell and the sale to list price ratio of these properties.  In 2014 it took 80 days (on average) for all properties with a sale price of $1 Million or more to be reported sold.  For properties in the $1.5 Million plus range it took 82 days from listing to sale date.  In 2015 both of these numbers decreased to 73 days for properties having a sale price of $1 Million or more and 78 days for those properties having a sale price of $1.5 Million or more.  Similarly the sale to list price ratio improved from 93 percent to 94 percent in both of these categories year over year.

 

What these statistics tell us is that there were more sales in 2015, these sales happened faster than in the past, and that sale prices were closer to asking prices than past years, all signs of a strong, broad market.

 

Chestnut Park and its sales representatives produced a record breaking year for our buyers and sellers in 2015.  Total dollar volume of sales exceeded $250 Million, the first time that that number has been surpassed.  Our total number of recreational property sales was also up by 10 percent, another record for the firm.  In Port Carling our office exceeded the results of our next closest competitor office by more than 46 percent in dollar volume of sales, a great accomplishment by Chestnut Park’s sales representatives.

Although 2015 was a market high, a number of negative economic changes appeared in December and have carried over into the early days of January.  These changes cloud the horizon as we attempt to peer into 2016 and the market we might encounter.  In December the Toronto stock market dropped precipitously, a drop that has continued into the first week of January 2016.  The Bank of Canada recently reduced its 2016 forecast to less than 2 percent growth, probably closer to 1.5 percent.  Western Canada continues to suffer as a result of declining oil prices.  As of the preparation of this report oil prices were hovering at $30 a barrel, the lowest they have been in more than 10 years.  On the international scene China continues to struggle, with no sign of change in its stagnating economy. When the Chinese economy slows, commodity oriented countries such as Canada are immediately impacted.

 

Recreational property purchases are discretionary.  History has demonstrated that during slow economic periods recreational markets also slow.  Hopefully by the time the market gears up in early spring some of these dark economic clouds will have cleared.  The low Canadian dollar (69.57 cents to the American dollar at the time of this report) may see more Americans purchasing properties in the Muskoka and area marketplace.  The bottom line is that we enter 2016 with various economic uncertainties that were not present in 2015.

 

Prince Edward County Real Estate Market Update – December 2015

As is the case every year, with January comes a look back at the year just passed and new year musings as to what the coming year will bring. This year is no different. With all of the figures reflecting the performance of the Prince Edward County (“the County”) real estate market in for 2015; sales and listings numbers logged, reviewed and justified,then recorded in the Enhanced Statistical Query Report produced by the Quinte & District Association of REALTORS® (“the Quinte Board”); the very strong and positive performance of the 2015 market is confirmation of the fact that the County has definitively taken its place on the map as a go to destination of choice in Southern Ontario.

The County real estate market closed out the year on a very strong note with December’s figures defining tight market conditions with limited product, ongoing strong demand, and rising average sale prices. December’s real estate performance contributes to the strengthening trend experienced in the County throughout the year, ending the season on the same high note. Having said that, 2016 has started off on a rather negative economic footing with steep declines in the equity markets, both here and south of the border, further compounded by falling oil and commodity prices which so far appear to be outweighing any consequential positive impact of the sliding dollar on the manufacturing and export markets. This mixed with historically high household debt levels and the potential for moderate tightening in lending conditions may add to the broader economic pain being experienced across the country, and dampen real estate prospects somewhat for the year to come.

 

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As stated in earlier reports, the smaller sampling of properties represented in the wards that constitute the County real estate market inevitably results in greater statistical swings depending upon the particular cross-section of sales that took place within the period in question, but continues to provide some indication of market strength and the direction in which it is trending. According to the Enhanced Statistical Query Report, the Quinte Board reported a 14% increase in sales in the month of December compared to the last month of the year in 2014. Specifically 33 properties were reported sold this December compared to 29 last year. That brought the total number of properties sold in the County in 2015 to 591 as set out in the Quinte Board Enhanced Statistical Query Report representing reconciled annual sales from the period spanning January 1 through December 31, 2015. This constitutes an 8% increase over the 548 sales recorded in the County during 2014.

 

Sales across the entire Quinte Board were equally robust with sales in December besting those from the year previous by 8% (188 vs 174) and annual figures coming in15% better than in 2014 with a grand total of 3399 properties changing hands compared to 2966 the year before.

 

As indicated, property supply remains tight with listings down again in December with only 40 new properties coming onto the market compared to 46 the year previous, a further 16% decline bringing the annual deficit in listings for 2015 to 9% with a total of only 1418 properties coming onto the market this year compared to 1555 last year. Not surprisingly, combined with the robust pace of sales, year-end reported inventory was down 23% for the month of December with only 280 active listings compared to 362 at the same time the year previous. Listings for the broader Quinte Board are also down 7% for the month year over year and 3% overall on an annual basis.

 

As an aside, the properties that did sell in December took 26% longer to sell than did those that sold in December the year previous, potentially reflecting the fact that the limited supply of properties is pushing sales to properties that otherwise would not have sold and had been lingering on the market. Interestingly enough, annual comparisons for the entire year also reflect a longer time period to sell the properties that did sell despite the higher volume of properties that changed hands. Perhaps again that is a reflection of the fact that more of the older supply of properties that would otherwise not be reflected in the sold statistics were being snapped up with the hotter market.

 

Finally, consistent with the fundamental principles of supply and demand and the logical outcome of a stronger market with tight or limited supply, average sale prices continue to rise. In December the average sale price came in at $329,788, a whopping 47% above the figure recorded in December 2014 when the average sale price for the month was $224,272. Even spread over a longer period of time, and representing a broader cross-section of properties, the increase in the average annual sale price for 2015 compared year over year with 2014 was 17% ($304,075 in 2015 vs $$259,406 for 2014), a hefty increase reflecting the heightened real estate activity and interest in the County.

 

All in all an impressive performance and a positive note to end 2015, and a promising way to ring in the New Year. Only time will tell what 2016 will bring considering some of the economic clouds on the horizon and some rumbling in the world of debt financing. That said, County properties remain well positioned moving forward with respect to comparative value and affordability, and will continue to benefit from the natural attributes of the area including its scenic beauty and proximity to higher priced and vibrant urban centres.

 

Collingwood Real Estate Market Update – December 2015

This report summarizes the monthly stats for the Western Region of the Southern Georgian Bay Association of REALTORS® (SGBAR). For clarity, the SGBAR trading area also includes the Eastern Region of Southern Georgian Bay, due to an amalgamation of the Midland Real Estate Board and the Georgian Triangle Real Estate Board in 2014. We are now known as Southern Georgian Bay Association of REALTORS®. For this monthly report, our focus remains on the Western Region.

 

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We saw 127 sales in December 2015 which is up 18% from the 108 sales reported in December 2014. The total number of sales for the year is 2386, showing a 15% increase from 2080 sales from the same time last year. The total sales dollar volume for December 2015 is $46,685,516 up 29% from $36,306,059 in December 2014. 

 

2015 has been a strong year for properties over $1.0M.  There have been 48 properties sold over $1.M which is a 23.1% increase over 2014. Of the 6 properties sold over $1.0M in December 2015, 3 properties were sold for over $1.5M.  Overall property types included waterfront, view properties, century homes and executive custom homes.

 

In previous reports we have noted that sales in the $500K to $799,999K showed the strongest growth in 2015 over 2014.  That price category ended the year as a close second in growth with 232 sales for the year compared to 177 for 2014, reflecting a 31.1% increase. Leading the way are sales in the $350K to $499,999K price range which showed a 31.4% increase with 460 sales for the year vs 350 for 2014. 

 

On the listing side of things, overall supply remained low. The number of active MLS® listings at the end of December was 1066 compared to 2288 for December 2014 which is a 47% reduction. There were 170 new listings in December 2015 vs 192 for December 2014. The total number of listings for the year was 4347 vs 5129 for 2014, which represents a decline of 15%.

The monthly Sales to Listing Ratio for December 2015 is 74.71% which makes a clear statement that we continued to experience a Seller’s Market.  The Sales to Listing Ratio for 2015 is 54.89% up from 40.55% in 2014.

 

The number of months of inventory is an important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. Based on average monthly number of sales throughout 2015 and listings for December 2015, we currently have 5.3 months of supply. 6 months of supply is considered the benchmark for a balanced market. Less than 6 months of supply favors the Seller because there are fewer choices for the Buyer. More than 6 months favors the Buyer and leads to lower prices.

 

Expired listings continued to decline.   There were 206 expired listings in December 2015 vs 251 in December 2014, representing an 18% decline.  The total number of expired listings for 2015 was 1687 vs 2415 at the end of 2014, marking a 30.1% decrease in expired listings 2015 over 2014.

As 2015 ended, we can say with all certainty that it has been a strong market for Sellers. Total dollar volume for the year increased month over month throughout the year with a tight supply of listings. And, even though the mild weather conditions in December prevented the ski hills from opening, the Southern Georgian Bay area was bustling and preparing for what is shaping up to be a strong 2016.