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September, 2017

Toronto Real Estate Market Update – August 2017

There were no surprises in the market data for the month of August. It was expected that as compared to last year the number of reported sales would be down, and that the average price from residential resale properties in the greater Toronto area would once again decline.

There were 6,357 properties reported sold in August, almost 35 percent fewer than the 9,748 properties reported sold last August. It should be remembered the sales reported last August were record breaking in a record breaking year. Last year 113,044 properties changed hands, by far more than any other year in Toronto real estate record keeping. The good news is that notwithstanding the size of the decline it was less dramatic than the months of June and July.
The average sale price came in at $732,292, 3 percent higher than the average sale price of $710,978 achieved in August last year. Although August’s average sale price for all properties sold in the greater Toronto area is substantially less than the record breaking average sale prices achieved in April of this year, it would appear that the decline in prices may have plateaued. Throughout the month weekly average sale prices were consistently around $730,000.
In the City of Toronto detached properties have seen the sharpest decline in sales volume and in average sale prices. Sales volume on a year-over-year basis is down by almost 35 percent. (It should be noted that in the 905 region sales volume is down by almost 42 percent). Average sale prices were off by just over 1 percent. This means that on a statistical basis detached homes have given up all the price gains achieved leading up to the month of April and the province’s announcement that it would implement a foreign buyer’s tax of 15 percent of the sale price of properties.
It is not clear if all price gains achieved by detached properties have been lost. There just simply is not enough data to make this definitive determination. In August 132 properties having a sale price of $2 Million or more were reported sold. Last August 233 properties in this category were reported sold. Almost all of these properties were detached homes. Clearly when fewer properties in the highest price categories are selling, the over-all average sale price will decline. It is not uncommon to see fewer high end sales in August. The key question is were there fewer sales because these properties were not selling, or was it due to sellers not putting these properties on the market, and if they did, continued to hold out for higher prices. September’s data will go a long way in answering that question.
Although it is taking longer for properties to sell, the pace of sales was still brisk in August. All sales took place in only 23 days. Last year all sales took place in 18 days. Even detached properties in Toronto’s central core, which sold for an average sale price of $2,113,130, all sold in only 26 days. Semi-detached properties continued to move briskly selling in just 20 days. In the case of semi-detached properties in Toronto’s east-end districts (Riverdale, Leslieville, Beaches) sales took place in only 13 days on average and for sale prices that exceeded the asking price on average by about 104 percent.
Although condominium apartments sales have slowed year-over-year, condominium apartments average sale prices have not. Last August the average sale price for condominium apartments in Toronto’s central districts was a mere $493,324. This August that same apartment will cost a buyer $600,781, an increase of almost 22 percent. In fact, the average sale price for condominium apartments increased throughout the entire City of
Toronto by more than 20 percent in August. Sales on the other hand were down by about 25 percent.
The decline in condominium apartment sales in August is due to two factors. Rising prices have made some units inaccessible to a growing group of first-time buyers, while shrinking inventories have lessened the choice available to those buyers that can afford to purchase Toronto’s ever more expensive condominium apartments. In August there were only 2,353 units available for sale. Last August there were 2,950, a decline of 21 percent. This is contrary to the overall market trend which sees listings of all properties up an eye-popping 65 percent compared to the same period last year.
Listing generally are beginning to decline. In August only 11,523 new properties became available for sale, a decline of almost 7 percent compared to the 12,346 properties that became available last year. If this trend continues and if sales pick up there will be a rebound in average sale prices, not to the absurd price increases that were taking place in April, but annualized increases of 5 to 7 percent which are healthy and sustainable.
September’s performance will be a crucial month in providing some guidance as to how quickly the market will begin to see an increase in activity and healthy increases in average sale prices. Now that two quarter point interest rate hikes have been factored into the market, it will simply be matter of seeing when buyers will take their finger off the pause button. The fundamentals in the Toronto and area market remain sound and are growing stronger. Employment is growing, high levels of immigration to the region continue, consumer confidence is strong, and notwithstanding two interest rate hikes, by historical standards rates continue to remain low. All these factors point to a real estate market that should be stronger than what we are currently experiencing.

Prince Edward County Real Estate Market Update – August 2017

Moderating conditions continue to predominate across Prince Edward County (“the County”) in the second half of summer and as we move into fall. The Enhanced Statistics Statistical Query Report prepared by the Quinte and District Association of REALTORS® (“the Quinte Board”) confirms that the real estate market for the area is not as frenetic or overheated as it was earlier this year, but that despite calming trends, continues to manifest most of the fundamentals reflective of a healthy and stable market. Despite a slight increase in the number of listings, product supply remains generally tight and when desirable properties do come to market, they do not tend to linger on the shelf for long.

 

Whether due in part at least to an ongoing shortage of inventory, or attributable more to an infusion of buyer caution prompted by the market adjustment currently taking place in the Greater Toronto Area, or a combination of both, sales in the County in August are down again year over year. The decline in sales recorded by the Quinte Board, however, was not at the same pace or to the same degree as recorded in previous months. Specifically, the Quinte Board recorded 59 properties as having sold in August compared to 72 last year, constituting a drop in sales of 18%. Year to date sales are essentially on a par with 2016 coming in just short of last year’s numbers. Based on calculations from numbers obtained monthly from the Enhanced Statistics Statistical Report, 473 properties appear to have sold thus far this year compared to 480 the year previous, signaling only a 1% shortfall.
As indicated, the number of new listings was up in August year over year. The Quinte Board recorded 95 properties coming onto the market, 11 more than the 84 recorded In August 2016, a 13% increase. Given the chronic shortage of properties in the market and the increased pro le of the County and consequent on going strong demand for real estate in the area, any increase in supply is welcome at this stage and will not likely fully alleviate the pent-up demand which has built up over time amongst buyers looking for property in the County. Year to date new listings continue to lag behind last year’s numbers with a total of 928 recorded thus far compared to 958 at this time last year, which amounts to a 3% negative differential, but highlighting the nature of the persistent property shortage. Further confirmation of this is found in the pace at which properties that do come onto the market sell. The average days on market for sold properties continued to shrink. According to the Enhanced Statistics Statistical Query Report, the amount of time it took for properties in the County to sell was on average only 51 days which is 37 days or 42% less time than last year when the average number of days on market for properties sold came in at 88 days. Having said that, the general inventory has increased somewhat with the Enhanced Statistics Statistical Query Report showing 454 properties available at month’s end compared to 395 one year previous, an uptick in the range of 15%.
Another indicator of the general health of the market is average sale price. According to the Quinte Board, the average sale price of properties that sold in the County in the month of August came in at $393,129 which is 13% higher than August 2016 when the average sale price was $347,646. Demand for property in the County remains strong and combined with a scarcity of listings continues to push the price of properties higher. Further evidence in this regard suggesting that the County real estate market has legs is the fact that the average sale price of properties sold in the County in August is also higher than it has been since April when market conditions were at their hottest and frothiest.
All in all, prospects for the fall are optimistic. Broader economic indicators including employment figures continue on an upward trajectory, to the extent that the Bank of Canada surprised most market commentators by raising interest rates earlier than anticipated and for the second time this year, pointing to better than expected economic performance across many sectors. Reports also point to the fact that housing starts are on the rise, an indication of broader sector confidence and optimism despite recent market adjustments and increasing interest rates, which thus far are not anticipated to exert significant downward pressure on the market, though it may have somewhat of a moderating effect on the extent to which buyers are prepared to stretch to secure their property of choice. Interestingly, it would appear that inventory may be one of the biggest determinants of the pace of sales and activity in the County real estate market moving forward, as buyers cannot buy what is not for sale.

Collingwood Real Estate Market Update – August 2017

The Southern Georgian Bay Association Of REALTORS® (SGBAR) comprises two distinct markets. This report summarizes the monthly statistics for the SGBAR Western Region. 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 Association Of REALTORS® in 2014.

 

 

As unpredictable as the summer weather, the August 2017 market was just as irregular with some properties selling quickly with or without offer presentation dates and bidding wars, while plenty of others waited it out.
And even though the monthly Sales-To-Listings Ratio indicated a Seller’s market in August 2017, the significant drop from 97.73 in August 2016 to 58.28 in August 2017 showed a clear sign that the market had changed year over year and demand was not the same as last August. The ratio compares the number of sales to the number of new listings in any given market. A Seller’s market occurs when the Sales-To-Listings Ratio reaches 55% or more. A Buyer’s market occurs when the Sales-To-Listings Ratio is 35% or less.
Perhaps due to some Sellers hoping to bene t from the historically low inventory which has been helping to drive up sale prices, new listings were up 6% from last August with 326 new listings reported August 2017 over 309 in August 2016. Year to Date (YTD) new listings were down 12% year over year with 2660 new listings reported August 2017 vs 3022 in August 2016.
The Seasonally Adjusted Months of Inventory for August 2017 was 3.7 months, up from 2.1 months last August, but still well below the long term average for this time of year. Two years ago the Seasonally Adjusted Months of Inventory was 4.7, and 5 years ago it was 11.2. Months of Inventory is a measure of how long it would take to sell current inventories (assuming that no more listings are added) at the current sales pace.
And likely due to the usual summer slump combined with low inventory and patient Buyers waiting for prices to come down, sales were down 37% year over year with 190 sales reported in August 2017 compared to 302 sales reported in August 2016. Of those 190 sales, the number of sales in every price category from under $50,000 to $3,000,000 plus, was down or equal to August 2016 with the exception of sales of properties ranging from $700,000 to $799,000 and $900,000 to $999,999, where sales were up over the number of sales recorded August 2016. YTD sales were down 10% with 1752 sales reported vs 1943 in August 2016.
With ongoing demand for residential single family homes both from local Buyers and families moving from the Greater Toronto Area (GTA), the average price of a single family residential home in the Western Region rose 20.1% from $465,199 in August 2016 to $558,981 in August 2017. However, likely due to the decline in the number of sales year over year, the Total Sales Dollar Volume for August 2017 was down 30% over August 2016. YTD figures still showed an 11% increase given the particularly strong market performance experienced earlier in the year.
YTD, the average sale price of a residential single family home was up across the board for the Western Region August 2017 over August 2016 however the number of sales was down in all areas except The Blue Mountains. The YTD average sale price of a residential single family home in Collingwood in August 2017 was up 20.5%, 502,994 vs $417,399 in August 2016. The number of sales in Collingwood YTD was down 16.7% year over year. The Blue Mountains reported a 28.2% increase in average sale price, $786,686 vs $613,710 year over year, with a 6.4% increase in the number of homes sold in August 2017 vs August 2016. YTD, Prices were up 22.6% in The Municipality of Meaford with August 2017 reporting an average sale price of $404,611 vs $329,978 in August 2016. The number of sales decreased 20.2% year over year. Grey Highlands saw the largest price increase YTD with a 29.2% jump year over year, with the August 2017 price coming in at $580,400 vs $449,112 in August 2016. Sales were down 4.2%. Clearview reported a 9.3% increase in the average price, $554,153 over $464,436 year over year with a 24.8% decrease in the number of homes sold 2017 vs 2016. YTD, Wasaga Beach was up 27.4%, with the average sales price reported at $421,309 over $330,724 for August 2016. Sales were down 22.4% year over year.
Not only did August experience cool temperatures, the August market was definitely cooler than the frenzied spring market. Many bold Sellers with high expectations remained hopeful they would see higher prices, while tentative Buyers were prepared to offer less than asking or simply wait it out. With a second interest rate increase announced early September by the Bank of Canada, it remains to be seen whether that will add any additional pressure on fall market conditions.