Toronto Real Estate Market Update – January 2016

The new year started strong, producing 4,672 residential resales, an increase of more than 8 percent compared to the 4,318 sales the market produced during January 2015. The big story early in the year is not sales, but the lack of inventory.

In January only 8,957 new properties became available for sale in the greater Toronto area. This compares poorly against the 9,547 new listings in January 2015, a decline of over 6 percent. The number of new listings combined with the properties that sold in January means that at the beginning of February there were only 9,966 properties available for buyers to purchase. This is a decline of almost 15 percent compared to the 11,600 properties available last year and an even bigger decline than 11,903 properties available for sale in February 2014.

ROSEDALE: 337 Wellesley St, Toronto | $1,499,000

These numbers are exceptionally low. They translate into only 1.8 months of inventory in the greater Toronto area and 2.1 months in the city of Toronto.The difference is due to the larger supply of condominium apartments available for sale in the city, predominately in the central core. In early 2015 there was 2.2 months of inventory in the greater Toronto area and 2.4 months in the city of Toronto. These numbers favor sellers but create a troublesome imbalance in the market place. In same trading areas the lack of inventory has reached serious levels of concern. For example in the trading area that encompasses the Riverdale and Leslieville neighbourhoods, there are only 1.1 months of inventory, a record low.

The problem with these low inventory levels, aside from the fact that they leave buyers frustrated and prevent first time buyers from becoming homeowners, they are placing incredible upward pressure on sale prices.

In January the average sale price for the Toronto area came in at $ 631,092, more than 14 percent higher compared to January 2015’s average sale price of only $ 552,929. In the city of Toronto the number is even higher, and the average sale price in the central core, including all condominium apartment sales which took place in January, is now $ 731,243. If inventory levels stay low the continued pressure on prices will put sustainability in question.

HOGGS HOLLOW: 3 Campbell Cres, Toronto | $4,498,000

Activity was not restricted to the lower priced properties in January. For example, 88 properties having a sale price in excess of $2 million sold in January. This compares with only 44 such sales during the same period last year, an increase of 100 percent. The tight market conditions have driven the average sale price for a detached home in Toronto to $1,061,789 and a semi-detached home to $ 713,972. The problem with semi-detached homes is that there are hardly any available to buyers. There were 10 trading districts in Toronto that had no semi- detached properties listed for sale in January.

LEASIDE: 25 Malcolm Rd, 506, Toronto | $434,000

In the city of Toronto the only abundant source of available inventory is condominium apartments. In January there were 3,231 active condominium apartments listings. This supply represents almost 70 percent of the total available inventory of residential properties listed for sale in Toronto. It is not surprising that buyers are turning to condominium apartments as their only housing choice. In January condominium apartment sales were up by 11.6 per cent compared to last year. Prices jumped by 8.6 percent. In January the average sale price for a condominium apartment was $416,104. In Toronto’s central core the average sale price was $469,723.

It will be interesting to see what happens in February. It is unlikely that tight inventory levels will improve, which means the pressure on prices will continue.  The turmoil in equity markets may have an impact on sales, particularly the upper end, where choice rather than necessity plays a role in buying and selling decisions. Lastly on February 15^th the new lending rules come into effect. After that date high ratio buyers will have to come up with 10 percent downpayments on loans that exceed $500,000. They can still make 5 percent downpayments on the first $ 500,000 of the loan amount. It is not anticipated that this change will have a negative impact on the greater Toronto resale market place.

Report written by LLB, Chestnut Park Real Estate President and CEO, Broker of Record Chris Kapches

Collingwood Market Update – January 2016

This report summarizes the monthly statistics for the Western Region of the Southern Georgian Bay Association of REALTORS® (SGBAR). While 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, this report is restricted to the Western Region, formerly known as the Georgian Triangle Association of REALTORS®.

It appears that the New Year has begun in the same way that 2015 ended, summed up by the comment “where has all the property gone”? As indicated in reports throughout last year, 2015 was marked by a robust market with a healthy sales pace outstripping that of the year previous throughout the entire year, month to month and year over year. Supply, however, was simply unable to keep up, and while sales surged, new listings lagged in every month but one, leading to the inevitable – a remarkably tight market with more buyers chasing fewer properties. As indicated, that general trend appears to have carried over into 2016 with an ongoing shortage of listings. In January 2016, only 249 new listings came onto the market compared to 299 one year earlier, marking a drop of 17%. Even more noteworthy is the fact that the foregoing decline is from a month which itself had registered a significant reduction of listings from the year previous. In other words, January 2015 had more than 31% fewer new listings recorded than January 2014 when 435 properties where logged as coming onto the market. Not surprisingly the total number of active MLS® listings at the end of January 2016 reflects this same trend and reinforces the tight market conditions with a 26% decrease in active listings, specifically 987 compared to 1333 for January 2015.

152 JOZO WEIDER BLVD, THE BLUE MOUNTAINS

Sales, however kept pace and actually slightly surpassed the numbers from last year with 106 sales reported in January, up 3% from the 103 sales reported last year at this time. While this increase in sales is modest compared to most of those recorded throughout last year on a year over year basis, it can probably be explained, at least in part by the fact that there does not appear to be much available to buy. The figures may in fact have been quite different had there been more inventory. Total dollar volume sales were up marginally by 1% year over year.

7326 15/16 NOTTAWASAGA SIDE RD, CLEARVIEW

Generally speaking, sales occurred across a range of price points with the greatest pockets of activity being focused in the $250,000-499,999 range where a total of 52 properties were recorded as changing hands compared to 39 last January, an increase of 33.6%, and again in the $700,000-899,999 range where 5 properties changed hands compared to 1 at the same time last year. The higher end is somewhat split with no activity at all in the $900,000-1,499,999 range compared to 3 last year, but 2 sales above $1,500,000 (both being custom built homes located in the town of The Blue Mountains), matching last year’s unit sales performance in this price category.

111 CLEAR WATER CRT, THE BLUE MOUNTAINS

According to the Canadian Real Estate Association’s report at the end of December 2015, interest rates are not expected to begin rising any time soon, and later than previously expected. In fact the forecast is that they will remain on hold until late in 2016 or beyond. Consequently, historically low interest rates should continue to support sales and prices throughout the rest of the year. Despite ongoing volatility in the equity and commodity markets (particularly in relation to oil prices), economic forces point to a countervailing strengthening in the central region economies of Canada fuelled by the improving recovery and job picture south of the border, though this would appear to be far from hiccup free.

All in all, and for all the reasons stated, this is an excellent time to sell if you are considering a larger home, downsizing or a lifestyle change. Moreover, as it is becoming increasingly expensive for many Buyers to purchase in urban markets, many families and empty nesters are moving to the Southern Georgian Bay area where they are able to purchase more affordable homes in all price categories without sacrificing quality of life.

Prince Edward County Market Update – January 2016

While the winter so far has been relatively mild and snow free, it remains a quieter time in Prince Edward County (“the County”). After a remarkably busy and robust real estate market across the County in 2015 in which Chestnut Park Real Estate Limited (“Chestnut Park”) established itself as the #1 real estate brokerage in total dollar volume of real estate sold in 2015*, January proved to be a time of pause in the property market across the County. This is traditionally the case, but may in fact have been compounded by the economic uncertainty playing out both globally and closer to home due to the upheaval caused by falling oil prices, and volatility in the equity and currency markets (including the Canadian dollar).

Many potential buyers may be trying to assess how current market conditions may play out and the impact they may have upon their investment choices and whether to proceed with property purchases, particularly in the discretionary or vacation property markets. All of this may be having a bit of a dampening effect upon real estate activity in the County straight out of the gate in 2016, however initial volatility appears to have calmed somewhat, and the nearby Toronto and area real estate market actually improved upon the sales performance for the same period one year ago.

A total of 19 properties were sold in the County in January, 28% fewer than the 24 properties sold last year at this time. Listings are down even more however, with 32% fewer new properties coming onto the market than last year, with 104 properties listed compared to 152 in January 2015. The market remains tight and that is reflected in the fact that active listings at the end of January were down 28% with only 326 properties on the market compared to 451 last year. With inventory down, fewer properties are available for buyers, which should have the effect of pushing prices higher. This proved to be the case for most of last year which consistently experienced a shortage of real estate product. In fact however, prices for January actually fell somewhat compared to the beginning of last year with the Quinte & District Association of REALTORS® (“the Quinte Board”) recording the average sale price as $237,942, down 11% from a year earlier when it came in at $267,835.

As indicated in earlier reports, the smaller statistical survey available in the County due to the smaller number of properties bought and sold as compared to larger and more populous trading areas inevitably results in greater statistical swings depending upon the constitution of the particular cross-section of properties that changed hands at any particular time. In January therefore, the fewer properties that did sell were apparently more heavily weighted at the lower price range and therefore dragged the average sale price down from a year earlier. The properties that did sell however, sold in less time than those which sold in January 2015, taking an average of 71 days, 17% faster than the 86 days recorded a year earlier.

Activity across the broader Quinte Board which includes Belleville, Trenton, etc. was actually relatively on par with last year’s performance with only 1 more sale recorded then a year earlier (160 vs. 159), but the market was much tighter with 23% fewer new listings coming onto the market, reflective of the shortage of inventory being experienced across many of the areas served by Chestnut Park, meaning that purchasers have to hunt longer, and compete for those properties that reflect value.
With that in mind, and given the comparative affordability and competitive price edge of the County compared to other comparable vacation property regions, the outlook is favourable for those thinking of putting their properties on the market for sale. Financing conditions remain attractive to buyers with interest rates hovering at historically low levels for the remainder of the year, and forecasts calling for increased economic strength and recovery in the central regions. The main qualifier remains ongoing volatility in the equity markets and uncertainty as to the reach of the negative effects of the collapse in oil prices, and any consequent impact for the future.

* according to the the Quinte Board – Sales Report by Agency – Sale Date Jan1/15 to Dec 31/15