Toronto Real Estate Market Update WINTER 2012/2013

The last month of 2012 ended as the previous six months had ended, in a negative variance as compared to the same month in 2011. Like

November, sales in December were sharply off compared to sales achieved in December last year. Sales declined by almost 20 percent

compared to sales of residential resale properties in December of 2011. The Toronto Real Estate Board reported only 3,690 properties sold

as compared to 4,585 a year ago. In November of this year sales were off by 16 percent compared to November 2012, while sales in October

declined by 7.1 percent.Added to the 21 percent decline in September, the Toronto and area market place saw its greatest decline since the

2008-2009 recession in the last third of 2012.

At year end it is apparent that for the first time since the spring of 2009 the resale market is shifting in favour of buyers. December alone,

because of its seasonal nature, is never determinative of the overall market, but the last third of the year, clearly speaks to a shifting

market. Interestingly this shift has not been a crash, but rather a leveling off to numbers consistent with historical patterns of strong but not

frenzied markets over the past decade. It must also be remembered that a large segment of this market place is composed of condominium

apartments, particularly in Toronto’s central districts. That area is showing signs of considerable weakness and lowering the overall results

of the market place.

In the City of Toronto all sales (on average) happened in 37 days, 5 days longer than December 2011. This includes condominium

apartment sales, which were much slower than overall sales. In December it took a condominium apartment 44 days to sell. The slower

sales pace is having an impact on the months of inventory of properties available for sale.Whereas in the early part of this year there were

only 2.2 months of inventory, in December that number has grown to 2.7 months. It should be noted that even at 2.7 months, that is still a

very low amount of inventory. During the worst period of the American housing slump, months of inventory exceeded 10 months, with

higher inventory levels in some of the more depressed areas.

Notwithstanding seven months of negative variances, prices have (except for condominium apartments) not shown any signs of decline. In

December the average sale price for the greater Toronto area came in at $478,739, 6.5 percent higher than the $449,566 achieved in

December 2011. December’s average sale price of $478,739 was only slightly less than November’s average sale price of $485,544. It is

common for average sale prices to decline on a monthly basis as the year comes to a close.

Condominium apartment sales continue to cause concern. As 2012 came to a close, many of the condominium projects sold out in 2007

and later were registered.Many of these unit sales were to investors.A great many of those units have now made their way to market. There

is now as many as 30 percent more condominium apartments available for sale as compared to the same period last year. It is no surprise

therefore, that sales are taking longer to achieve (44 days) and average sale prices are beginning to decline. The average sale price for

condominium apartments in the City of Toronto was $342,847. This number is down 1.8 percent compared to those properties sold in

December 2011. This sector of the resale market will continue to lag as more condominium apartments come to market in 2013. Average

declines of 5 percent in sale prices are likely.

Overall there were 13,241 properties available for sale in the greater Toronto area at the end of 2012. This compares to 12,868 available at

the end of last year, a modest 2.9 percent increase. Of note is the fact that new listings coming to market in December declined compared

to December 2011. Only 4,295 new properties were offered for sale, a 10 percent decline from the 4,774 placed on the market last year. It

may be too early to conclude that this reflects a seller’s resistance to the emerging market landscape. New inventories in early 2013 will be

more determinative.

At year end 85,731 properties were reported sold for the year, down from the 89,096 sold in 2011, a 5.1 percent decline. The decline is

predominantly reflected in the last half of the year. Up until May, the market was on pace to establish a new record for sales in the greater

Toronto area, eclipsing the 93,193 sales achieved in 2007, the reigning record.

Looking forward to 2013, I anticipate a continuation of the current market trend, with large negative variances in the early months of 2013

due to the fact that they will be compared to the superlative early results of 2012. I repeat my comments from the November market update.

Sales are a function of price, servicing costs, and consumer confidence, a factor primarily drive by strong job growth.Most areas in Toronto

have become quite pricey, particularly the central districts. Low interest rates have driven market sales over the past few years. But as sales

prices push higher, the stimulating impact of low rates becomes minimized. That as well as stricter mortgage lending rules and a second

land transfer tax in Toronto are the cause of the market slow down. Mortgage rates are not expected to decline, and job growth is expected

to be tepid. Consequently, the only other area that is then a market driver, prices, can be expected to decline. The declines will be modest.

Toronto Real Estate Market Update FALL 2012

October’s market performance delivered another monthly negative variance as compared to October 2011, although the decline was not as pronounced as the decline in September. Sales in October were off by 7.1 percent compared to October 2011. In September sales were off by 21 percent as compared to September of last year. These statistics are not, however, reflective of the overall market. Not all sectors of the residential resale market are performing in the same fashion, with some trading districts and various types of properties, clearly not in market lockstep.

Notwithstanding a decline in overall sales as compared to last year, demand does not appear to have weakened. What has happened is that buyers are more judicious and deliberate, particularly when it comes to price, location, and housing type. This is evident in the fact that throughout the Greater Toronto Area all sales in October took place in only 28 days, only 2 days more than October 2011. This data includes all housing types, including condominium apartments, which are under-performing compared to the rest of the market.

In the city of Toronto all sales (again including condominium apartments) took place in only 26 days. Detached houses sold in only 19 days, even in Central Toronto where the average price for a detached home in October came in at $1,171,873. Semi-detached homes sold even quicker, in only 18 days. In the eastern trading areas (Riverdale, Leslieville, the Beaches) all sales on average took place in under 14 days. These numbers do not reflect a buyer’s market, particularly when sales prices, on average for these housing types, are exceeding 100 percent of the asking price.

Clearly the buyers are there, and if an attractive detached or semi-detached house becomes available, they have no hesitation in making a quick decision to purchase it. The difference in this market is that buyers are not, as in the early spring, randomly and indiscriminately, purchasing almost all properties that became available.

This buyer demand continues to result in rising home prices (except for condominium apartments). Even though sales declined from 7,425 properties in October 2011 to 6,896 this year, the greater Toronto average sale price increased from $474,241 to $503,479 over the same period, an increase of 6.2 percent. In the city of Toronto detached homes increased by 5 percent to $779,484, and semi-detached homes by 7 percent to $575,618. The average sale price of condominium apartments declined by 2 percent.

At the beginning of November there were 8,492 available properties for sale in the city of Toronto. Of those properties 4,849 are condominium apartments, or 58 percent. Of those 4,849 condominium apartments 3,072 were located in the central trading areas. In other words 63 percent of all condominium apartments for sale are in Toronto’s central districts. As more projects achieve registration, the supply of condominium apartment inventory will continue to increase, and with this increase in inventory prices will continue to decline, as apartments take longer to sell. In October it took 35 days for a condominium apartment to sell in the city of Toronto. This is substantially higher than the time it took for free-hold properties to sell. It is significant to note that only in May of this year all condominium apartments were selling in only 27 days, a 30 percent increase in selling time.

Overall the Toronto resale market finds itself with 2.4 months of available inventory of resale properties (including condominiums), and 2.6 months of inventory in the city of Toronto. In actual numbers this represents 20,737 available properties, a 16.5 percent increase compared to 2011. This increase can to some extent be attributed to the increase in the number of available condominium units. In October 13,054 new listings came to market, up 6.1 percent compared to the 12,306 that became available in October 2011.

This market report indicates that not all market sectors are acting similarly. Detached and semi-detached homes continue to sell quickly, particularly if they are well priced, and have an asking price less than $1,500,000. Condominium apartments take almost 50 percent longer to sell. These sales patterns reflect rising prices for detached and semi-detached homes (about 6 percent) and declining prices for condominium apartments (2%). This pattern will not change soon, but in fact will only be accentuated as more condominium apartments come to market.

Going forward we can anticipate these market conditions to continue. Condominium apartment sales will continue to be weak, probably through 2013. At some point prices will become so attractive (and assuming mortgage interest rates stay low) that condominium buyers will return in some force to the market, but that is not in the foreseeable future. Days on market will probably exceed 50 in the new year. As freehold sales decline (detached homes declined by 7 percent in October, semi-detached by 4 percent) price increase will begin to moderate, but there is no indication of massive price declines, as predicted by some economists.

Prepared by: Chris Kapches, Senior Vice President and Legal Counsel at Chestnut Park Real Estate Ltd., Brokerage

Muskoka Real Estate Market Update FALL 2012

The recreational property sale market has, for the most part, stabilized in 2012, both in terms of sales volume and sale prices. Sale prices have steadily declined from their peak in 2007. It would appear that in 2011 and now 2012 more realistic pricing by sellers has resulted in a period of consistent sales. Having said that the market place remains price sensitive. Buyers are now more discriminate and will simply not pay what they perceive to be inflated prices.

Over the summer months the Muskoka and Haliburton Association of Realtors amalgamated with the Orillia Board. The new association is now called Realtors Association of Ontario Lakelands. In the future market data provided by the new association will include data related to the Orillia and region market place.

At the end of September the Association reported 81 recreational property sales for Lake of Bays. This compares with only 63 sales for the same period in 2011, representing a 28 percent increase. On the Muskoka Lakes the increase was modest. This year Muskoka area realtors have reported 184 recreational property sales to the end of September. Last year 182 had been reported. The overall market for the entire Association produced mixed results. The Association reports 671 recreational property sales for this year. This compares to 611 for the same period in 2011, an increase of 9.8 percent.

This data reflects a market that has changed little since 2010. Sales have, with some variation, remained consistent. It is prices that have drifted downward. It is the more realistic sale prices that have kept the market robust, notwithstanding the many economic issues, both in North America and further abroad that have had negative impacts on recreational property sales.

Compared to last year inventory levels are slightly lower. In Lake of Bays there were 125 active recreational properties available for sale at the end of September. This compares to 139 in 2011, a decline of 10 percent. On the Muskoka Lakes there were 312 properties available for sale, a 5 percent decline compared to the 329 that were available at the end of September 2011. Overall, for all trading areas, the Association reports 1155 properties available for sale, again a 5 percent decline from the 1218 that were available last year at this time.

The decline in available inventory appears to be working in lock step with improved reported sales, at least for the most part. Inventory levels are now so low, however, that sellers can anticipate immediate increases in sales prices.

Chestnut Park and its sales representatives continue to dominate sales in the region. In the Port Carling area, Chestnut Park agents outsold the next nearest brokerage by 58 percent more dollar volume of sales. The average sale price of properties sold by Chestnut Park’s agents since April exceeds $1 Million with total dollar volume of sales approaching $160 Million. With the affiliation with Christie’s Chestnut Park and its agents are the pre-eminent brand for high end sales in the Muskoka Lakes and Lake of Bays.

Going forward we should anticipate a similar market for the last three months of 2012 and then into 2013. The Ontario economy continues to be weak with no real growth forecast in the foreseeable future. The key to sales, as has been stated in previous market reports, is realistic pricing. There are buyers for recreational properties, but they are discerning and expect value when they purchase.

Prepared by: Chris Kapches, Senior Vice President and Legal Counsel Chestnut Park Real Estate Ltd., Brokerage

Collingwood Real Estate Market Update FALL 2012

With the release of the real estate statistics by the Georgian Triangle Association of REALTORS® (“GTAR”) for the month of September, it would seem “fall” is definitely the operative word for all indicators as they relate to the housing market in the Georgian Triangle. While in no way remarkable or dramatic, the performance of real estate in the area appears to be consistent with what the industry and commentators are calling for generally for the rest of the year and into 2013 as sales and prices cool and moderate but do not veer into significant correction territory. Rather with the healthy pace of sales established to date, this year is expected to end on a comparatively healthy and positive note when measured against the previous years’ performance, but 2012 may well already have its best months of activity behind it, with the rest of the year looking potentially a little lacklustre in comparison.

September racked up 159 sales, a 10% decline from the 176 recorded in September of 2011 and 10 fewer than the same month two years previous. As set out above, however, year to date sales remain 8% ahead of last year at this time with a total of 1520 properties changing hands compared to 1410 last year at this time. Total dollar volume reveals more of the same, only more so, with numbers coming in 14% behind last September’s total, though year to date figures remain 6% ahead of last year due to the robust market experienced in the Georgian Triangle this year up to this point.

Listings too were down significantly from last year with only 529 new properties coming onto the market. This is 19% fewer than the 650 new listings which came out last year in September, resulting in a tighter market with fewer active listings recorded (2476 compared to 2501 last year at this time). As a result the sales to listing ratio is actually higher this September than last coming in at 30.06 compared to 27.08 one year ago. Year to date 5316 new properties have come onto the MLS® system, 1% more than the 5252 listings recorded last year at this time.

Prices continue to stagnate in negative territory, continuing a trend established in previous months despite the healthy pace of sales. The average sale price in September for single family residential property came in at $319,643, 11% less than one year ago when the average sale price for the same category of properties was $359,611. Measured over a twelve month period the negative differential shrinks to 3% with the latest sale price averaging over that period coming in at $315,086 compared to $326,048 for the same period the year previous. Year to date the average residential sale price is 3.7% less than it was last year at this time coming in at $315,284 compared to $327,556.

As adverted to in earlier reports, commentators are calling for  a moderating real estate market as we move towards the end of this year and into the next as lending regimes tighten in response to national regulatory initiatives to address increasing household debt loads and a perceived overheated and overvalued real estate market. As further indicated in previous reports, the Georgian Triangle has in large part avoided many of these problems, however, no market is immune to broader economic forces, and thus is inevitably caught up at least to some extent with the trends and influences experienced elsewhere.  It should be noted, however, that the net result of these competing economic and regulatory forces is difficult to measure. While Europe continues to stagger under the economic burden of its financial crisis, the American housing market is finally showing real signs of life and contributing to consumer confidence in the United States which may well be extending to the broader economic climate, leading some to be more optimistic regarding real economic recovery south of the border.  This in turn is a positive factor in assessing the future prospects for our own economy and the domestic real estate market both nationally and in the Georgian Triangle. Interesting times lie ahead but at this point with so many variables at play both at home and abroad it is difficult to be definitive as to what the market holds until some of these forces play themselves out.

Prepared by: Richard Stewart, VP and Legal Counsel Chestnut Park properties in the Collingwood area

Toronto Market Update June 2012

Although the sales results for residential resales reported by the Toronto Real Estate Board were down in June as compared to June of 2011, the month’s performance was still strong. As in the case of the previous few months, the number of new listings coming to market continued to increase, prompting some economists to conclude that the sellers’ market that has been in play in Toronto since the latter part of 2009 may be coming to an end. I believe that this prediction maybe premature. It will take a string of months when sales decline and listings continue to increase before the market will convincingly move from a sellers’ to a balanced market.

In June 9,422 residential properties were reported sold. This request is down by more than 13 percent compared to the 10,850 sales reported in May, the most sales reported in any month in 2011. June’s sales were also off by 5.4 percent compared to the 9,959 sales reported in June 2011. This is one of the few months in which sales in the current month did not exceed sales for the same month in the previous year. On a year-to-date basis, 50,778 sales have been reported. This pace, if it continues, will exceed the record year of 2007 when Toronto area Realtors sold 93,193 residential properties.

A trend reported in the last monthly report continued into June. Sales growth continues in the 905 region, while sales are beginning to decline in the 416 marketplace. In June sales of detached houses were down 9 percent in the 416 area, yet up 2 percent in 905. Similarly semi-detached home sales were down 15 percent in the 416 region, while the corresponding housing type in the 905 region was up 7 percent. It is only in the case of condominium apartment sales that the 905 and 416 markets are in lock step. Condominium apartment sales were down 18 percent in the 416 region and 20 percent in the 905 area, the largest drag on the over market.

New listings continued to increase as compared to June of last year. 16,679 new listings came to market, 13 percent more than the 14,755 that came to market last June, but substantially fewer than the 19,177 that came to market in May. Since April 52,292 new listings have come to market. During this same period 30,400 sales have been reported, resulting in an increasing active listing base. At the beginning of July there were 20,583 active listings, 13.7 percent more than the 18,102 properties available for sale in July of 2011. As I have indicated in previous reports, the increasing inventory, if it continues, will shift the balance in the market, resulting in more buyer choice and ultimately moderating price increases.

Not withstanding the increasing inventory levels of residential properties in the Toronto area properties continue to sell at a very brisk pace. In June it took only 22 days for all properties (on average) coming to market to sell. Last year it took 24 days. Although the pace in June was blistering, it was one day less than the 21 days it took all properties to sell in May. Like the months of inventory, the days on market statistics must be keenly observed to see if any moderating patterns are developing.

June’s average sale price declined as compared to Mays. In May the average sale price was $516,350, slightly less than the all time record average sale price of $516,608 established in April of this year. Junes average sale price came in at $508,622, 7.3 percent higher that the $474,223 achieved in June 2011. Junes decline, as compared to April And May, is consistent with cyclical seasonal declines, and does not, therefore indicate that average sale prices are declining. Historically prices begin to decline in June, and continued to decline in July and August.

Central Toronto remains the most expensive place to purchase detached and semi-detached houses. On average a buyer can expect to pay $1,306,000 for a detached house, and $ 700,000 for a semi-detached house. Properties in these categories sold in 19 and 14 days, respectively, notwithstanding their expensive selling prices. The least expensive detached and semi-detached homes can be found in Toronto’s eastern trading districts. On average homes sold for $ 506,370. Buyer’s had to be ready to act quickly. Properties in these categories were often spending less than 10 days on the market before being reported sold.

July will be an interesting month to monitor. If at the end of the months sales for July of this year are less than sales for July 2011, it will be two consecutive months of negative sales variances. Still too early to pronounce that the market has shifted to a balanced market. But clear signs that change is underway If this does not occur, then one can anticipate a brisk market for the remainder of 2012, though less frothy than the first six months of this year. Early indications are that July 2012 will compare well to the performance achieved in July 2011.

Prepared by: Chris Kapches, Senior Vice-President
Chestnut Park Real Estate Ltd., Brokerage

Toronto Real Estate Market Update – May 2012

The Toronto Real Estate Board reported very strong numbers for the month of May. The only change to the market place in May was the number of listings that came to market and the longer term impact that more supply will have on market conditions. Until very recently demand outdistanced supply. We are beginning to see the very first signs of supply catching up to demand.

In May 10,850 residential properties were reported sold. This number represents the most sales reported in any month in 2012. Sales in May of this year exceeded sales as compared to May of last year by 11 percent. There were 9,766 sales reported in 2011. Year-to-date 41,651 residential resale properties have been reported sold. If the current pace of sales continues, sales for 2012 might top the 93,193 sales reported in 2007, the best year in the history of the Toronto and area marketplace.

What is emerging is that sales growth is the strongest in the 905 regions. Sales of detached and semi-detached homes in the City of Toronto are up by 6 percent over last year. In the 905 region sales of similar types of properties are up by 13 and 12 percent respectively. Surprisingly the same is true for condominium apartments. In the City of Toronto sales were up by 5 percent, and 12 percent in the 905 region. In absolute numbers, however, many more condominium apartment sales take place in the City of Toronto (1,632) than in the 905 region (704). There are a number of factors responsible for these variances. Generally property values are less in the 905 region than in the City. There is more supply. There is no additional land transfer tax. In the City of Toronto the municipal land transfer tax adds approximately $6,000 to the averaged priced property.

May saw one of the largest influx of new listings in many months. 19,177 new listings came to market, 20.2 percent more product than the 15,949 new listings in May 2011. Coupled with the 16,436 new listings in April, 35,613 new listings came to market in the last two months. During this same period 20,978 residential properties were reported sold. Approximately 15,000 properties remain unabsorbed heading into June. These 15,000 unabsorbed listings are reflected in the 20,462 active listings at the beginning of June. This is a 10 percent increase compared to the total number of available listings at the beginning of June of last year. If new listings continue to increase at May’s pace, price growth will moderate, as all but the most exceptional properties will take longer to sell. The months of supply data will be the statistic to watch over the coming months.

Given the foregoing it is not surprising that days on market data provided by the Toronto Real Estate Board is at record levels. In May all residential properties that came to market sold in 21 days. Last May it took (on average) 23 days for all properties coming to market to sell. In Toronto’s hot, and less expensive, eastern districts, sales took place in less than 17 days on average, even as low as 9 days in some of the eastern sub markets.

The average sale price in May came off the record average sale price of $517,556 achieved last month. May marked the end of a string of record breaking months. May average sale prices subsided slightly to $516,787, yet still almost 6.5 percent higher than the $485,362 average sale price reported in May of last year. Sales of properties having a sale price of $1 Million or more did establish a new record. In this category of homes, 668 properties were reported sold, eclipsing the record established just last month. In April 643 properties in this category sold. It should be noted that 100 properties had sale prices exceeding $2 Million, also a record.

Central Toronto remains the most expensive location to buy a home in the greater Toronto area. The average price of homes in Toronto at $568,768 is 12 percent more expensive than the averaged price property of $516,787 for the entire greater Toronto area. In central Toronto average prices rose to $681,261, 32 percent more than greater Toronto prices. And this includes condominium apartments. A detached home in central Toronto now costs $1,249,967 (almost identical to April’s price), and a semi-detached home will cost a buyer $766,440. As has been the case throughout 2012 the most accessible properties for buyers are available in Toronto’s eastern districts. The average sale price for all eastern districts in May came in at $439,376, well below the average Toronto resale price of $568,768.

Going forward the key to the way in which the market will evolve is supply. As this report has indicated, May saw one of the largest supply of new listings in years. A continuation of a large number of new listings over the remaining months of 2012 will cause the market to moderate. Prices will level off as buyers have more choice.

Prepared by: Chris Kapches, Senior Vice-President at Chestnut Park Real Estate Ltd., Brokerage