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May 12

2018

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Toronto Real Estate Market Update – April 2018

The Toronto and area residential resale market continued its recovery in April. For the fourth consecutive month, the market has shown improvement in both the growth of average sale prices and the number of properties reported sold. In April 7,792 residential properties were reported sold, and the average sale price for all properties reported sold in the Greater Toronto Area came in at $804,584. In January, the average sale price had slumped to $735,754. In four months, Toronto’s average sale price has increased by almost 10 percent.

The market has not recovered to where it was in April 2017, but it is showing signs that it might, particularly in the City of Toronto (416 region). The reason for this recovery is obvious. The fundamentals that drove the frenzied early 2017 resale market are unchanged: strong employment numbers, a growing economy, migration to the greater Toronto area, and insufficient inventory to meet buyer demand. With more than 100,000 people migrating to the Toronto area annually, the supply-demand scenario is no longer in balance. It’s a testament to the strength of the Toronto resale market that it has continued to recover notwithstanding three mortgage interest rate hikes and new more rigid stress testing for mortgage qualification.
In the City of Toronto, the average sale price came in at $865,817 for all types of properties sold, including condominium apartments. The cost of a detached property rose to $1,354,719, while semi-detached homes came in at $1,021,986. These numbers are starting to approach the numbers that the market was producing last year. Year-over-year sale volumes are down by 34 and 16 percent respectively, but in the case of semi-detached properties, this is a product of supply and not demand. In some of Toronto’s trading area, there were no reported sales of semi-detached properties. That’s because there were no listed properties for buyers to buy.
The strength of the market is profoundly demonstrated by the short time periods that detached and semi-detached properties remained on the market. All detached properties sold in only 17 days and for an amazing 101 percent of their asking price. All semi-detached properties sold in an eye-popping 13 days and for a startling 106 percent of their asking price. These numbers are only slightly short of what was happening last year.
Condominium apartment prices have risen consistently, even through the downturn in the market following the announcement of the Ontario Fair Housing Plan in April of last year. In April, and for the first time, the average sale price for all condominium apartments sold exceeded $600,000 coming in at $601,211. In Toronto’s central core, where more than 67 percent of all sales take place, the average sale price reached $667,345. Toronto’s most affordable housing form is rapidly becoming less affordable. Not only did condominium apartments sell with growing average sale prices, but they all sold in only 16 days and at 101 percent of their asking price. In the central core, they also sold at 101 percent of their asking price and in only 15 days.
Condominium Apartment sale prices are, like other housing forms, being driven by a severe lack of supply. At the end of April, there were only 2,130 apartments available to buyers, a little more than one month’s supply. Last year at the height of Toronto’s frenzied market there were 2509 condominium apartments on the market, a year-over-year decline of available inventory of more than 15 percent.
The high-end market has been the only laggard in Toronto’s resale market. Year-to-date only 600 properties having a sale price of $2 Million or more have been reported sold. Last year 2221 had been reported sold, a decline of more than 73 percent. This market sector is, however, also improving. In April the negative variance, as compared to last April, was only 48 percent.
The Toronto and area marketplace is beginning to send out two powerful messages. Firstly, the foreign buyer’s tax that was part of the Ontario Fair Housing Plan was directed towards a non-existent enemy. There were no hordes of foreign buyers buying Toronto real estate. There were no barbarians at the gate. That has been subsequently verified by not only the provincial government but by other sources, namely the Toronto Real Estate Board and CMHC. Secondly, the Toronto resale market is being driven by local, domestic forces. That being the case, governments should abandon any attempt to engineer the marketplace and focus on measures that will help the increase of supply.

Apr 08

2018

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Toronto Real Estate Market Update – March 2018

In March the Toronto residential real estate market clearly demonstrated its resilience. Notwithstanding the provincial government’s attempt to engineer the market, it continues to respond to forces that have nothing to do with the Ontario Fair Housing Plan. That’s due primarily to the fact that the underlying basis for the province’s measures, namely foreign buyer speculation, were unfounded. Since the implementation of the Fair Housing Plan it has been demonstrated that less than 5 percent of all purchases of residential properties in the greater Toronto area involved foreign buyers.

The real and fundamental factors driving the Toronto and area marketplace have remained unchanged: low unemployment, rising wages, a growing (albeit modestly) economy, and most importantly, the combination of low supply and continuous immigration into the greater Toronto area. Ultimately what will control the Toronto residential marketplace is the market itself, specifically the cost of housing. The Fair Housing Plan, to its credit, did act as a wake up call to buyers, but ultimately it will be the cost of mortgage money, qualifying for mortgage financing, rising average sale prices (due primarily to a lack of supply) that will control and moderate the residential resale market.

In March the lack of supply was clearly demonstrated by the rising average sale price. March saw an average sale price for all properties in the greater Toronto area of $784,558, an increase of 2.2 percent compared to January, and almost 7 percent higher than February’s average sale price. Demand was demonstrated by how quickly all listed properties sold in March. The average days on market was only 20. That is a pace consistent with the most aggressive seller’s market. In some areas of the market, particularly in the 416 region, the days on market was even lower.
All detached properties in the 416 region (City of Toronto) sold in only 17 days. All semi-detached properties sold in a shocking 13 days, and in only 11 days in Toronto’s eastern regions. All condominium apartments in the City of Toronto sold in only 17 days. As hard as this is to believe, this is a pace not that different from the delirious pace of the first four months of 2017.

When the market moves at the above-noted pace, it is not surprising to see average sale prices rising. In the City of Toronto all properties, including condominium apartments, sold for 101 percent of their asking prices, coming in at $817,642. All detached properties sold for 100 percent of their asking prices, coming in at almost $1,300,000. Unbelievably semi-detached properties sold for 107 percent of their asking prices, the average sale price exceeding $1,000,000. Even condominium apartments sold for 101 percent of their asking prices
March 2018

with an average sale price of $590,000. In Toronto’s central core, the average sale price for condominium apartments was $656,836, not that much less than average sale price for all property sales in the greater Toronto area. Condominium apartment sales are now taking place at approximately $1,000 a square foot.

The ultimate reason for these incredible numbers is the lack of supply. Notwithstanding that the number of active listings in March (15,971) was 103 percent higher than the 7,865 properties available last year, the bulk of the available listings are located in the 905 region. Of the 15,971 available properties for sale, 75 percent are located in the 905 region. In the case of detached properties, 83 percent of all detached properties are located in the 905 region. The situation involving condominium apartments is reaching crisis proportions. In March 1,573 condominium apartments were reported sold. At the end of March there were only 1,854 condominium apartments available for sale, most of them in Toronto’s central core. If this rate of absorption continues, there will be almost no product for buyers. This is particularly troubling because condominium apartments have been the only affordable housing type available to buyers.

Detached properties were the only housing type that continues to lag behind the rest of the Toronto market. Sales were off, year-over-year, by more than 40 percent, and average sale prices were off by almost 18 percent. The explanation is self evident. During last year’s delirious market, mortgage money was historically cheap, and relatively accessible. Since then not only has mortgage money become more expensive – three bank rate hikes in the last year – but new mortgage stress testing for conventional mortgages makes qualifying substantially more difficult. It should also be noted that during the January through April real estate madness of last year’s average prices reached astronomical levels, levels that simply could not be sustained.

Going forward we are not likely to see much change in Toronto’s residential resale market. The key to change is more supply. There is no indication either at the provincial or municipal level that measures will be taken that would have a positive impact in this area. For political reasons governments may attempt further engineering, but any such actions will have a limited impact on the market, but are likely to have broader, negative economic impact. Without dramatic change to Toronto’s available supply, Toronto will become one of many other cities in the world that because of their political and financial stability where real estate ownership will not be available to everyone. That begs another question: what about the rental supply?

Mar 14

2018

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Toronto Real Estate Market Update – February 2018

There were no surprises in February’s residential resale data.

 

Last year in February the market was verging on delirium. With record low mortgage interest rates, a severe supply problem, and a collective psychological belief that if you didn’t buy immediately you would be shut out of the market permanently. Under these conditions it was not surprising that prices were increasing by more than 30 percent on a year-over-year basis.

 

 

 

Its also not surprising that this year we are witnessing negative variances as compared to last year. Since the early months of last year, we have seen government intervention in the form of three mortgage rate hikes, a 15 percent foreign buyers tax, and a rigid new form of stress testing borrowers seeking conventional mortgage loans. Conventional loans are mortgages that do not exceed 20 percent of the value of the property. Yet despite all of this the Toronto and area residential resale market has held up fairly well.

 

There were 5,175 reported sales in February, a 34 percent decline compared to the 7,955 sales reported last year. But comparing this year’s sales against last February is like comparing the Toronto market against a fictional metropolitan area that no longer exists. Last year’s results were extraordinarily driven by a never before seen market delirium, a delirium that crashed with the announcement of the provincial government’s Fair Housing Plan and the implementation of the foreign buyers tax.

 

Yet despite all these market shocks, all properties still sold in only 25 days and the average sale price in the greater Toronto area came in at $767,818, a 12 percent decline compared to last February. That decline, however, requires some clarification. The decline in average sale price was primarily driven by the decline in sales and prices in the 905 region and the decline in sales of higher priced properties ($2 Million or higher).  The average sale price in the City of Toronto (416 region) came in at $806,494 and that despite the fact that the bulk of all condominium apartment sales——- the least expensive housing type———are located in the city of Toronto. Prices in the 905 region declined to $767,816, a substantial decline from last year when they came In at $876,000.

 

The biggest drag on average sale prices was the decline in higher priced property sales. This is not surprising and expected. In last year’s frenzied market, 389 properties sold having a sale price of $2 Million or more, most of them being detached properties. This February only 126 properties in this price point were reported sold, a 67 percent decline. A decline of this magnitude, representing more than 5 percent of the entire market, will have a powerful, negative impact on the market’s average sale price.

 

Again it is not surprising that this decline has occurred. Detached property values had reached stratospheric, unsustainable levels. Last year the average sale price for a detached property was approaching  $1,600,000 for the greater Toronto area and more than $2,500,000 in Toronto’s central districts. This year average sale prices have been reduced to $1,282,240 and $2,027,761 respectively. These are prices that are beyond the reach of most buyers, particularly with the increase in mortgage interest rates and the new stress testing. Given the impact of these factors we can anticipate further softening of prices for sales of this property type, or at the very least a plateauing.

 

Semi-detached sales are also in decline compared to last year but to a lesser degree and for different reasons. Across the city of the Toronto the average sale price for semi-detached properties still came in at $985,902, and at more than $1,235,000 in Toronto’s central districts.  Sales of all semidetached properties took place in only 19 days and at 103 percent of their asking price. These are not statistics emerging from a market that is in trouble but rather the opposite. In Toronto’s eastern districts, particularly those closest to central Toronto, all sales took place in only 13 days and for sale prices approaching an astounding 110 percent of the asking price. These numbers point to strong demand and a very limited inventory.

 

The supply of resale condominium apartments is approaching crisis levels. In February 1,687 new condominium apartment listings came to market, a 10 percent decline in the number of listings that came to market last year. The Toronto condominium market effectively finds itself in exactly the same position as last year at this time, except that prices are almost 11 percent higher. The condominium apartment that one could buy last year for $515,000 will now cost buyers $570,000. In the central districts where most buyers would prefer to locate, the average sale price is now an amazing $645,000.  Last year the average sale price was $ 577,000. All condominium apartments sold on only 22 days and for 100 percent of their asking prices. Ironically in Toronto’s central districts, where prices are highest, all condominiums apartments sold in only 21 days and for 101 percent of their asking prices.

 

The Toronto and area marketplace is where it would have been without the provincial government’s intervention, constrained by the weight of, what is now clear, unsustainable prices. Going forward sales will pick up as sellers come to the realization that except for the most desirable properties in the most desirable areas, sale prices achieved last year are no longer realistic, particularly with higher mortgage interest costs.  Basic economic factors——employment, strong economy, increasing wages——are very positive and therefore demand will remain powerful. When prices align with buyers’ financial capabilities the market will once again begin to grow, but prices will remain in check, especially if we see further increases in mortgage interest rates, as anticipated.

Jan 12

2018

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Toronto Real Estate Market Update – December 2017

 

We move into 2018 saddled by a number of market factors that make predictions more difficult than they already are for any year in real estate. 2017 was, without doubt, one of the most remarkable years in the history of the Toronto residential real estate market. The year began in the most frenzied fashion possible. During the months of January, February, March and April, sale prices were increasing in an unsustainable fashion, topping out at 33 percent on a year over year basis in March. By April the average sale price for all properties sold in the greater Toronto area had reached an alarming $920,000. That number included all condominium apartment sales, the least expensive housing form available to buyers.

 

 

On April 20th, everything changed. On that day the provincial government announced the Ontario Fair Housing Plan. Amongst other measures, it imposed a 15 percent tax on residential real estate purchases by foreign buyers. Technically this measure should have had an insignificant effect on the market – after all only 4 percent of all homes were purchased by foreigners, as defined by the legislation. But the implementation of the tax acted as a psychological wake up call, causing buyers to stop, look at the astronomical amounts they were paying for properties, and wait to see what the impact of the tax would be on sales and sale prices.
By May sales of residential properties had declined by more than 20 percent (with more to come in the ensuing months) and average sale prices began a steady decline. By June the average sale price for all properties sold had declined from $920,000 in March to $794,000.
During the first four months of 2017 Canadians had become the most indebted households in the world, carrying 170 percent debt compared to household income.
In the months that followed, and on the strength of the Canadian economy, the Bank of Canada increased rates twice by a quarter point on each occasion. Suddenly buying a residential property in the greater Toronto area became more expensive to service the associated debt. But government intervention was not yet at an end. The Office of the Superintendent of Financial Institutions announced that effective January 1st, 2018 new stress tests would be applied to buyers borrowing from federally regulated lenders. These stress tests would also be applied to conventional borrowers, that is, borrowers with a down payment of 20 percent or more (high ration borrows have always been stress tested). Effective 2018, conventional borrowers will be qualified using the Bank of Canada’s 5-year benchmark rate (which is approximately 5 percent) or at the current contracted rate plus 2 percent if that rate exceeds the benchmark rate. A buyer currently approved at 3.5 percent will now have to qualify at 5.5 percent.
This brings us to December. Notwithstanding the market upheavals of 2017, December closed the year in a very positive fashion. There were a respectable 4,930 reported sales, only 7 percent less than the 5,305 sales reported in December 2016. The average sale price came in at $735,000, almost 1 percent higher than the average sale price during the same month last year.
A deeper analysis of the resale market indicates that the 416 region has fared much better than the 905 region. The average sale price in the city of Toronto remains strong, with detached properties selling for $1,250,000, semi-detached for $903,000 and condominium apartments for $532,000. By comparison detached properties in the 905 region sold for $910,000, semi-detached for $636,000 and condominium apartments for $430,000.
The most dramatic change between December this year and 2016 was the change in the number of active properties available for sale. Last year there were only 4,930 available properties. This December that number has increased to 12,926, a startling increase of 172 percent. Once again, a deeper analysis indicates that the bulk of the properties available for sale are located in the 905 region, where sales have been slower and prices have declined. Last December there were 2,736 properties available for sale in the 905 region. This year that number has swollen to 9,190 an eye-popping increase of 235 percent. By comparison last year in the 416 region there were 2012 properties available for sale, this year that number rose to 3,736, or 85 percent, considerably lower than the increase of inventory in the 905 region.
Considering everything that occurred in 2017, we should take comfort in December’s numbers. Going forward buyers will have more choice, and given the new stress tests, they will need that choice to find the property that best suits their now more restricted debt servicing budget. Sellers can take heart in that value, for properties reported sold, particularly in the 416 region, have remained strong, with only a slight, and sustainable increase, compared to 2016. All this points to a balanced, sustainable, yet strong residential resale market for 2018. Desirable properties in desirable neighbourhoods will continue to attract buyer attention, generating multiple offers, and over-asking sale prices. What we don’t need is any more government intervention. The market will do nicely without it in 2018.

Dec 13

2017

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Toronto Real Estate Market Update – November 2017

November finished strong but in a fractured fashion. To use a cliché, not all markets were equal in November.

The City of Toronto (area code 416) continues to strengthen, following the market declines after the province’s announcement of the Ontario Fair Market Plan and in particular a 15 percent tax imposed on foreign buyers in late April. In the City of Toronto, where generally there was much less foreign buyer activity than in the 905 region, the shock of the foreign buyers tax has been absorbed. The impact of the tax in the 905 region continues to negatively impact that residential resale market.
The only drag on the City of Toronto’s residential resale market is the sale of detached properties.
November Real Estate Market Report Toronto
Detached property sales in the City of Toronto were off by 19 percent compared to November 2016. Sale prices faired more favorably. Compared to the same period last year they declined by only 5 percent, a clear indication that the market is further stabilizing.
Semi-detached and condominium apartments in the City of Toronto produced very strong results. Semi-detached property sales were only off by 4 percent compared to last year, and impressively prices were flat compared to November 2016. Condominium apartments provided even more remarkable results. Sales were up by almost 18 percent compared to last year, and sale prices declined by only 6 percent. This data makes it clear that the residential resale market has almost returned to where it was a year ago, which was the beginning of the irrational market runup that began in January of this year and was crushed by the provincial Fair Market Plan.
Although the market will continue to recover into 2018, it is not anticipated that it will parallel the Vancouver phenomenon after the British Colombia government promulgated a foreign buyers tax in that province in 2016. Since then we have seen two quarter point interest rate hikes by the Bank of Canada and the announcement by the Office of the Superintendent of Financial Institutions that commencing in January 2018, uninsured borrowers (borrowers who put down more than 20 percent of the purchase price of a property) will have to demonstrate that they can afford their mortgage payments at either the five-year average rate noted by the Bank of Canada or two percentage points higher than whatever rate they were able to negotiate with their bank. Simply stated, borrowers will have to show more income to qualify for a mortgage than they did in 2017.
Overall sales of residential resale properties have shown an impressive improvement compared to the months following the Fair Housing Plan announcement. There were 7,374 properties reported sold in the Greater Toronto area. This compares to 8,503 properties reported sold in November last year, a decline of only 13 percent. Notwithstanding this negative variance, it compares very favorably to the massive negative variances in June, July, August and September. Another positive sign of market recovery. Although sales were not occurring as quickly as they were last year at this time, at only 24 days on market, sales were brisk by historical standards.
The large negative variances in sales in the months mentioned above, (June, July, August and September) and an increased number of properties coming to market have increased the supply of properties available to buyers, with the exception of condominium apartments. Due to their price point, condominium apartment demand has remained strong, resulting in tight inventory. At the end of November, there were 18,197 properties of all types available to buyers in the Greater Toronto Area. This compares with only 8,639 last year, an increase of 110 percent. It should be remembered that the 8,639 properties available last year was a critically and dangerously low supply. That was made evident by the explosion of the irrational resale market that we experienced between January and April 20th of this year. In November, 14,349 new listings came to market, a 37 percent increase compared to the 10,456 new listings that came to market in 2016. There is no question that buyers have considerable choice compared to last year. This is another factor that mitigates against a repetition of what occurred in Vancouver, here in Toronto.
For the first time in years on a month-over-month, year-over-year comparison, the average sale price declined. Last year the average sale price came in at $777,091. This November it came in at $761,091, a decline of 2 percent. The decline was primarily due to the decline in the average sale price of detached properties in the 905 region. There were 2,319 detached properties sold in the 905 region in November. Their average sale price came in at only $898,605. By comparison, the average sale price of detached properties in Toronto (416 region) was a staggering $1,276,184. Unfortunately, there were only 812 properties in this category, not enough to have a significant impact on the overall average sale price.
Going forward, what we do not need is any further government intervention in the market place, unless it is designed to stimulate the supply of housing, particularly purpose built rental units. The provincial government’s politically motivated decision to move to universal rent controls in Ontario may win the liberals the next election, but it will have a devastating impact on the rental housing market and will only hurt those it was “designed” to help – tenants. The market has moved into balance, with more choice for buyers, and price increases now consistent with inflation and wage growth. A balance that will be further stabilized by the new mortgage stress testing. Government should let market forces control the residential resale market, just help with supply.

Dec 12

2017

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Prince Edward County Real Estate Market Update – November 2017

According to the statistics published by the Quinte & District Association of REALTORS® (“the Quinte Board”), the fall performance of the real estate market in Prince Edward County (“the County”) continues its moderating and balancing trend, following several paces behind the experience of its neighbouring urban markets. In other words, and in general terms, inventory is going up and sales are declining, but in the face of all that, and unlike the Greater Toronto Area, properties continue to sell at a swifter pace than a year previous, and average sale prices continue to exceed those recorded last year, though at a somewhat smaller percentage. As indicated in earlier reports, properties in the County continue to be in demand, but with the increase in the number of available listings, and slowing pace in neighbouring markets, the sense of urgency has left buyers who apparently feel that they have more choice, can take more time to consider their options, and wait for the right property to come along instead of pouncing on the first property that crosses their path.

 

Prince edward county market report november 2017
According to the Enhanced Statistics Statistical Query Report published by the Quinte Board for the wards that make up the County, 41 properties sold in November, three fewer than in October consistent with seasonal trends, and 18 fewer than the year previous, marking almost a 31% decline. Year to date sales are down only 6% given the very active market experienced earlier in the year, with 609 sales being recorded thus far compared to 651 at this time last year.
There was only one more new listing in November 2017 than one year ago when 66 properties came onto the market. Year to date, the County still trails last year’s numbers marginally with 1158 new listings compared to 1186 by this time in 2016. Where the difference is felt, however is in active listings. At month’s end, the Quinte Board reported 300 listings as being available for sale which is 24% more than last year when only 242 were available.
Despite that however, those properties that come onto the market for sale continue to be bought up at a faster pace than last year, continuing a trend that has been established over the last several months in the County. Specifically, properties recorded as sold were only on the market 74 days on average, 4% less time than last year when the average days on market was listed as being 77.
In addition, and as stated, prices just keep going up in the County. The average sale price of properties sold in the month of November came in at $317,461, 7% higher than the same month last year when the average sale price was calculated to be $297,735, a clear indication that demand for property in the County remains strong and that the area continues to benefit from its accessible price point, consistent with the stronger performance of more affordable properties across markets generally, most particularly condominium apartments, in urban centres.
Indeed, as we approach the end of the year and look forward to 2018, affordability will likely be an increasingly influential factor in the performance of the real estate market, particularly as the average Canadian household debt to income ratio sets new records, and is potentially exacerbated by the threat of higher interest rates and ever tightening lending rules imposed by both the government and financial institutions. Rising rates, however, are due in large to the recent strong performance of many of the Canadian economic indicators including job growth and a positive trajectory for the GDP generally, all of which also contribute to inflationary pressures. While instability and uncertainty in the political and economic climate south of the border as well as globally continue to be complicating factors for real estate market forecasting, the economic fundamentals are generally strong and in place for ongoing stability and sustainability in the County real estate market for the end of the year and looking forward to the next.

Dec 11

2017

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Collingwood Real Estate Market Update – November 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.

 

Collingwood real estate market report novebmer 2017

The scarcity of new listings has certainly been the trend throughout most of 2017 and November was no exception. 191 new listings were reported in November 2017 versus 210 in November 2016 showing a 9% decline year over year. Year to Date (“YTD”) new listings were down 11% year over year with 3385 new listings reported by the end of November 2017 compared with 3802 that same time last year.
With a number of forces at play including lack of inventory and rising prices, the total number of sales for the month of November were down 23% from last November with 144 sales reported in November 2017 compared to 186 sales reported in November 2016. YTD sales were down 13% with 2279 sales reported by the end of November 2017 compared to 2623 in November 2016.
And despite fewer sales reported year over year, the average price of a single family residential home in the Western Region showed an increase of 7.8% from $500,091 in November 2016 to $539,505 in November 2017 likely due in part to increased or equal activity in sales of properties between $600,000 and $999,999. The Total Sales Dollar Volume for November 2017 was down 15% from November 2016. However, given the strong market performance throughout the year, the Total Sales Dollar Volume YTD was up 6% year over year.
Consistent with November statistics contained in this report, it’s not surprising to note that the average price of a residential single-family home in all municipalities across the Western Region was up year over year and the number of sales were down in all municipalities. The YTD average sale price in Collingwood in November 2017 was up 17.0%, $513,845 vs $439,052 in November 2016. The number of sales in Collingwood YTD was down 16.7% year over year. The Blue Mountains saw a 23.8% increase in average sale price YTD, $819,872 vs $662,292 year over year, making it the highest average sale price in the Western Region for the month of November. The Blue Mountains showed a slight 0.5% decrease in the number of homes sold in November 2017 vs November 2016. YTD, prices were up 24.4% in The Municipality of Meaford with November 2017 reporting an average sale price of $432,104 vs $347,289 in November 2016. The number of sales decreased 26.8% year over year. Grey Highlands reported a whopping 32.5% jump year over year, with the November 2017 price coming in at $631,374 vs $476,551 in November 2016. Sales were down 7.2%. Clearview saw a 13% increase in the average price, $558,899 over $494,741 year over year with a 28.9% decrease in the number of homes sold 2017 vs 2016. YTD, Wasaga Beach was up 22.4%, with the average sales price reported at $428,527 over $350,227 for November 2016. Sales were down 22.7% year over year.
The Sales-To-Listings Ratio is an important measure of the overall health of the real estate market and the balance between housing supply and demand. In November 2017, the ratio between the number of sales and new listings coming onto the market was 75.39, indicating that the SGBAR Western Region remained a tight Seller’s market. Notwithstanding that, this figure still marks a drop from the 88.57 sales to new listings ratio recorded in November 2016, a testament to the hectic market of one year ago and confirming that conditions have cooled from last November.
The pace of the November market was as moderate as the November temperatures were in the Western Region of Southern Georgian Bay. Inventory remained at record lows and a strong Sellers market prevailed. Overall most Buyers were more reserved than they were earlier in the year. However, with new lending guidelines effective January 1st, 2018 that will require borrowers who do not require mortgage insurance to qualify at a higher interest rate, Buyers may be motivated to act before the New Year.

Nov 10

2017

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Toronto Real Estate Market Update – October 2017

The Toronto residential resale market returned to form in October. It returned to where it should have been before the frenzy set in at the beginning of this year and buyers began competing for properties indiscriminately and paying unreasonable prices. Price increases of 30 percent on a year-over-year basis are simply unsustainable. Even without the implementation of the 15 percent foreign buyers tax introduced in April the market would have returned to reality. Reality was accelerated by the tax.

Comparing the resale market today with what was happening in the first four months of 2017 is pointless, although that appears to be a favourite pastime of journalists. Rather, if we compare the market to last year, and assess what has happened since the end of May, we get a picture of a strong, stable market, that surprisingly has yet to move to a balanced market. Having said that, we also see a fractured picture in which some trading districts in the greater Toronto area are much stronger than others.

 

 

In October, there were 7,118 reported sales, a substantial improvement compared to the 6,379 in September. Last October there were 9,830 reported sales in the greater Toronto area. Although the year-over-year variance was 26 percent, that variance was a dramatic improvement compared to the monthly variances between May and this month.
Except for the condominium apartment sector, what has changed is the supply of properties on the market. In October supply was up by almost 70 percent compared to last year. At the end of October there were approximately 18,850 properties available for buyers to purchase. That compares to only 10,563 last October. It was last year’s lack of supply, coupled with historically low mortgage interest rates, that drove the market into the frenzy that we experienced during the months from January to April.
Buyers are still alive. They are now more deliberate. However when attractive homes in desirable neighbourhoods become available buyers respond quickly, often still finding themselves in competition. This is clearly demonstrated by the fact that all sales in the greater Toronto area took place in only 26 days. By any assessment this is a scorching pace.
Twenty-six days represents the overall days on market. Depending on housing type and location the market is even faster. For example, and notwithstanding that the average sale price for detached properties came in at $1,287,765 in the City of Toronto ($1,008,207 in the 905 region), all detached properties sold in only 19 days. Semi-detached properties, with an average sale price of $948,309, sold in an astounding 17 days. Historically strong neighbourhoods like Riverdale, Leslieville and the Beaches are seeing sales take place in only 10 to 12 days, and for average sale prices substantially higher than asking prices. The market place in these neighbourhoods appears to be shockingly unchanged when compared to the pre-April market.
The average sale price for all properties sold also strengthened in October. It came in at $780,104, up 2.3 percent compared to October 2016. In September, the average sale price was $775,564. A year-over-year increase of approximately 3 percent is ideal. It is consistent with inflation and more importantly wage increases. During the later part of last year and into this year, price increases were many fold times higher than increases in wages. That is an unsustainable situation. Since April we have also seen the Bank of Canada increase the bank rate by 50 basis points, causing mortgage interest rates to rise, although at 3.5 percent (five-year fixed term) they continue to be historically low. Looming ahead is the stress testing that will take place in January. Even though borrowers will be paying the lenders reduced mortgage rates, they will be qualified on a rate 2 percent higher than what they will be paying. The new stress testing will act as a further control on exuberant increases in home prices.
Although prices generally have come under control and are in the sustainable range, condominium apartments continue to sell for approximately 21 percent more than a year ago. There are two reasons for this unique activity. Even though condominium apartments are becoming pricier, they are still the most affordable housing type available to buyers. Secondly there is little supply. Whereas the overall supply of housing year-over-year has increased by almost 80 percent. There have been no appreciable increases in the supply of condominium apartments.
Under these circumstances it is not surprising that condominium apartment prices are rising. In October, the average sale price for condominium apartments came in at $555,004. In Toronto’s central core where most condominium apartments are located and where most sales take place, the average sale price was an eye-popping $620,000.
In October, we also witnessed an improvement in the numbers of high-end sales, properties having a sale price of $2,000,000 or more. In September, there were 188 sales in that category. In October that number jumped to 208, an increase of more than 10 percent.
As the resale market moves towards the end of the year and a form of balance that we have not experienced in some time, both buyers and sellers should be thrilled with the markets transformation since April. We have an increase in supply for buyers, and steady but sustainable price increases for sellers. The area of major concern, which is beyond the scope of this residential resale market report, is the rental market and its critically low vacancy rate.

Real Estate Market Report October 2017

Nov 10

2017

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Prince Edward County Real Estate Market Update – October 2017

With the cooling weather and shorter days of autumn, the pace of the real estate market in Prince Edward County appears to be following suit, and reflecting the moderating trends the Greater Toronto Area (“the GTA”) faced over the summer. While choice and desirable waterfront, character and acreage properties continue to find buyers, the numbers produced by the Quinte & District Association of REALTORS® (“the Quinte Board”) in its Enhanced Statistics Statistical Query Report confirm that while both new listings and inventory are increasing, the urgency of buyers has dissipated, with many holding out until the perfect opportunity comes along. Markets appear to be rebounding in the GTA with both sales and price recovering from the post peak doldrums, just as they have in the Greater Vancouver trading area following the imposition of measures (including the foreign speculators’ tax) intended to reign in the overheated real estate market, but as is often the case, there appears to be a lag of a couple of months in surrounding satellite markets to what is happening in the urban core.

 

toronto real estate market report October 2017

In October, 44 properties changed hands in the County which is both 7 fewer than the month previous, and 17, or 29% fewer than the 61 which were reported sold the same month in 2016. Overall, notwithstanding the robust pace of sales experienced in the first half of the year, sales year to date now trail last year’s numbers by 4% with a total of 568 sales being reported by months end in October compared with 592 at this time last year.
In addition, the number of new properties coming onto the market in the County increased in October, both as compared with September as well as the year previous. A total of 89 properties were reported as new listings which is 27% more than the 70 that came out in October 2016, and brings the number of new listings year to date to 1091 which, based on the earlier shortage of properties is still 3% behind last year’s figures at this time when 1120 new listings were reported. That, combined with the decline of sales inevitably has an impact on inventory. Not surprisingly active listings were also up 19% with 345 active listings being reported as available at month’s end compared to 290 last year at the same time.
Despite that, and perhaps due to the prolonged shortage of desirable properties available to buy in the County for so long, the average days on market continues to be lower than last year with the average property selling in 70 days compared to 74 one year ago.
Consistent with the comments at the outset of this report that desirable properties continue to find buyers, and confirmation that there is still strong demand for the right property (even if buyers are being pickier), the average sale price continues to go up, and not insignificantly. In fact, those properties that did sell, did so for 24% more than they did last year with the average sale price coming in at a very respectable $365,619 compared to $294,402 in October 2016. Any suggestion therefore that properties in the County have in any way lost their luster, or that there is a broader slackening of demand is misplaced. Rather, under the circumstances, and given what has happened in nearby urban markets, a sense of measure and sanity appears to have returned to the market, where qualified and interested buyers are simply less inclined to pay whatever it takes to get a foothold in the market and are instead, and as indicated, prepared to wait for the right property to come along and act decisively at that point.
Reports confirm that urban markets, both locally as well as across Canada are returning to a more bullish track, with Toronto in particular, being in the early stages of same as its suburban market continues to lag. But it is still too early to tell what the impact of further tightening in lending criteria with the imposition of broader stress tests to conventional mortgages will be. Some speculate that it could prompt a brief surge in activity as buyers try to lock in prior to the imposition of the more stringent financial qualification requirements. Generally speaking, however, the broader economic outlook appears positive with indicators generally strong despite the ongoing threat of potentially destabilizing caveats on the international stage with respect to trade and protectionism, amongst other influences.

Oct 16

2017

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Toronto Real Estate Market Update – September 2017

September marked a change in the Toronto residential market place. For the first time since April, the average sale price for all properties sold in the greater Toronto area actually rose.

The monthly average sale price had been on a downward spiral ever since the provincial government announced the introduction of a 15 percent foreign buyers tax on April 20th.
In September the average sale price came in at $775,546. September’s average sale price was 6 percent higher than August’s average sale price, and almost 3 percent higher than the average sale price achieved in September, 2016. This is a welcome change, and the first step to the resale market’s return to normalcy. Not the frenzied market that we experienced from January through April, but the 2016 market, that saw property values rise in a moderate, sustainable way.
Although the market did recover in September, the recovery remains fractured, with some sub-markets out performing others. On the broadest level, the 416 area code, as a trading district, is outperforming the 905. Sales volumes for the greater Toronto area were down 35 percent compared to last year. This September 6,379 properties were reported sold, last year there were 9,830. Comparing the 416 and 905 trading areas, a different picture emerges.
Whereas the overall market was o by more than 35 percent compared to last year, the 416 trading area had only declined by 29 percent. The 905 trading area did not fair as well, with sales o by almost 40 percent. The same is true for average sale prices.
As indicated above, the monthly average sale price for the greater Toronto area was $775,546, up 2.6 percent compared to last year. On an unweighted basis, the average sale price for all properties sold in the 416 region increased by almost 10 percent compared to last year. In the 905 the increase was slightly less than 6 percent. So clearly the numbers emerging from the 905 region are acting as a downward drag on the results of the overall resale market place.
But even within the 416 trading districts there are regional differences. Sales of detached properties were down by 41 percent in September. The volume of semi-detached properties sales was down by only 15 percent, and 23 percent for condominium apartments. Average sale prices for detached and semi-detached properties rose by 4 and 5 percent respectively compared to September 2016, whereas condominium apartment average sale price rose by 24 percent compared to last year.
Notwithstanding the negative press concerning the Toronto resale market place and its “collapse”, house prices in Toronto continue to be very expensive, but given prevailing interest rates, still sustainable. In September the average price for a detached home in Toronto’s 416 region was $1,355,234. The cost of a semi-detached home was not far behind at $935,467. Even condominium apartments are becoming pricy. In September, the average price for a condominium apartment was $554,069. In Toronto’s central districts, where most of Toronto’s condominium apartment towers are located, the average price for a condominium apartment was $615,654. There were 917 sales in this category, almost 1/6 of the total inventory of properties sold in September. Notwithstanding these elevated prices, all the condominium apartments sold for 100 percent (on average) of their asking price.
On the freehold side, the region just to the east of the central core, comprising the neighhourhoods known as Riverdale, Leslieville, and the Beaches, continues to trade as if the downturn experienced everywhere else in the greater Toronto area miraculously missed it. In September all detached properties in these areas sold for almost 104 percent of their asking price and in a mere 14 days. Semi-detached properties moved even faster. Semi-detached properties in these neighbourhoods sold in just over 8 days and for sale prices that exceeded the asking price by more than 105 percent. The average sale price of detached and semi-detached properties reported sold in these neighbourhoods was $1,286,000 and $928,000 respectively.
Over the last 5 months the market has moved from an insane seller’s market to a more nuanced, balanced market (except of course in Riverdale, Leslieville, and the Beaches). In September, 16,469 new properties came to market, an increase of more than 9 percent compared to the 15,050 that came to market last year. At the end of September there were 19,021 properties available to buyers, a stunning increase compared to the paltry 11,255 available last year. In percentage terms, availability has increased by 69 percent, year-over-year.
Needless to say, with an increase in supply, both average days on the market and months of inventory have increased dramatically. Year-over-year days on market have increased from 16 to 24 days. Months of inventory, calculated on a 12 month moving average is now 1.5 months for the greater Toronto area. Months of inventory, using September data, is more like 3 months, a much more accurate reflection of the market than the 12 month moving average.
The market is normalizing. It will continue to improve moderately, as year-end approaches. Sellers hoping for the heady days of January through April will be disappointed. In addition to assimilating the impact of the foreign buyers tax, the Toronto market has had to contend with two quarter-point mortgage interest rate hikes, and potentially more to come. There is also the looming threat of additional stress testing which the Office of the Superintendent of Financial Institutions has proposed. All of these factors will have a moderating effect on the residential resale market going forward.