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Oct 16

2017

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Prince Edward County Real Estate Market Update – September 2017

Despite the fact that property sales continue to lag behind last year’s numbers, ongoing strong demand combined with limited inventory contribute to persistently tight market conditions for Prince Edward County (“the County”) moving into the fall and the final quarter of the year. After the market adjustment in the Greater Toronto Area over the summer months following the imposition of the foreign speculators’ tax as well as other initiatives to cool the overheated market, some of the urgency in the County market began to dissipate, but desirable properties continued to find buyers. And, unlike the Golden Horseshoe, the County did not experience a flood of listings with sellers trying to take advantage of what they perceived to be the top of the market. Rather, the pent-up demand for County real estate continues, and limited supply is doing little to alleviate this problem with other market indicators providing evidence and confirmation of ongoing strength and stability to the market. As both prices and demand appear to be stabilizing elsewhere in southern Ontario, the County may face an even greater inventory problem as buyers return to the market with greater confidence and conviction, unless more sellers decide to ease the supply bottleneck and list their properties for sale.

 

 

The Enhanced Statistics Statistical Query Report released by the Quinte & District Association of REALTORS® (“the Quinte Board”) for September confirms that at month’s end only 74 new listings came onto the market which is 20% fewer than last year when 92 were listed. And that is a significant negative differential from a season where properties were already in short supply. Year to date, the number of new listings is down by 5% (1002 compared to 1050 last year at this time). Available inventory, however, is for all intents and purposes on par with last year’s tight market conditions with 371 active listings being reported at the end of the month compared to 359 last year, constituting a negligible 3% differential, likely attributable to a combination of scarcity of supply and decline in sales.
As indicated, sales are down with 51 being report in September 2017 compared to 72 in the same month in 2016, a decrease of 29%. Year to date, because of the particularly strong sales recorded earlier in the first half of the year, 2017 and 2016 numbers are virtually a wash at this point (down only 1%) with 524 sales thus far compared to 531 at this time in 2016. But a review of other statistics produced by the Quinte Board tracking market performance in the County reinforces the comments made in last month’s report that lower sales are due to a variety of factors, some of which are set out above, and do not in and of themselves a single picture paint. Rather, for a more complete and informed assessment of the market other indicators must be consulted for a balanced perspective. For instance, the average days on market for properties sold in the month continued to go down year over, selling on average in only 65 days compared to 84 days in September the year previous, that is 23% faster. In addition, strong demand and limited supply continued to push prices up. According to the Enhanced Statistics Statistical Query Report the average sale price of properties sold in September 2017 was $366,196 which is 18% higher than that recorded by the Quinte Board in September 2016 when it came in at $309,960. Neither of these figures are indicative of a market in distress, but rather suggest that market fundamentals in the County remain healthy and strong.
In the latest news feeds, commentators have noted that buyers appear to be returning from the sidelines in urban markets with an uptick in prices and reports of stronger sales benchmarks being established, particularly in the more affordable central condominium and town house markets, giving confidence to market participants that despite two recent interest rate hikes by the Bank of Canada, the impact of recent uncertainty and instability has largely been absorbed and processed. This will inevitably translate to more positive market performance in the County moving forward. One potential unknown and potential dampening influence on buyers entering the market is the proposal by the Office of the Superintendent for Financial Institutions to extend existing stress tests beyond high ratio mortgages to conventional ones, requiring all borrowers to qualify at the higher posted rather than the discounted lending rates, regardless of the amount of their down payments. Given the recent reports regarding the rebound and stabilization in the real estate market, the likelihood of these proposals being implemented is increased. As is always the case, time will tell.

Sep 13

2017

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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.

Sep 13

2017

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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.

Sep 13

2017

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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.

Aug 16

2017

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Toronto Real Estate Market Update – July 2017

It is safe to say that the lull in the Toronto and area residential resale market is not due exclusively to the summer doldrums, although the seasonal slowdown that happens every year in July and August is no doubt adding to the slow market.

 

In July, 5,921 residential properties were reported sold for the greater Toronto area. That is a far cry from the 9,929 properties reported sold for the same period in 2016, a decline of more than 40 percent. July was the second month in a row when year-over-year sales declined by more than 35 percent.
Average sale prices continue to be higher than the same period last year, but not by the staggering increases that we experienced earlier in the year. In July, the average sale price came in at $746,218, 5 percent higher than the average sale price of $710,471 achieved last year. The average sale price for the greater Toronto area is down dramatically from prices achieved at the beginning of this year. For example, the average sale price for all properties sold in April was $919,449. Since then the average sale price has decreased by almost $175,000 or more than 18 percent.
This unprecedented rapid decline in average sale prices has put tremendous pressure on lenders trying to determine current fair market value. As a result, buyers who purchased closer to April with closing dates in late June and July are having trouble funding their purchases as lenders reduce the amount they are prepared to loan based on the declining value of properties. Although this is a temporary and transitional period it is an unpleasant place to be if you are a seller who has bought and is having difficulty selling in the face of rapid declining average prices or a buyer whose financial institution is reassessing the amount of financing it is prepared to advance.
Buyers, who have hit the pause button, waiting to see how far prices will drop before they re-engage have more choice than they have enjoyed for a number of years. In July, 14,171 new listings came to market, 5.1 percent more than the 13,482 new properties that came to market last July. Added to the increase in inventory in May and June, at the end of July there were 18,751 properties available to buyers in the greater Toronto area, more than 65 percent than the paltry 11,346 properties available in July last year. Although the difference in the number of available properties this year compared to last is stunning, on a 12-month moving average at the end of July those 18,751 active listings still represented only 1.3 months of inventory. A balanced market is represented by 3 to 4 months of inventory. If the market picks up in the fall, as is expected, supply could once again become a problem.
Buyers are taking longer to make decisions about buying properties. In July, all properties sold (on average) in 21 days. Last year it only took 16 days for all properties to sell. Detached properties appear to be taking longer to sell than semi-detached and condominium apartments. In July, it took 22 days for detached homes to sell. Semi-detached properties sold in only 19 days and condominium apartments sold in 20 days and only 19 days in Toronto’s central districts were most of the condominium apartment supply is located. The only explanation for this difference is price-point. Less expensive properties continue to sell quickly.
This is clearly the case with condominium apartments, where a supply problem is developing. In July, there were 2,710 condominium apartments for sale in the City of Toronto. Last year there were 3,307 apartments. We enter August with 29 percent fewer available condominium apartments for buyers to buy. There will be tremendous pressure on condominium apartment prices, as more buyers begin competing for an ever-shrinking inventory in the fall. It’s not surprising therefore that in Toronto all condominium apartments sold for 100 percent (on average) of their asking price in July.
The change in the residential resale market, and the speed with which it has changed, is very confusing. There has been no change in the economic fundamentals between mid-April and the end of July, yet the market is substantially down in average price and in volume. The provincial foreign buyer tax in itself cannot be responsible for this tectonic shift. By the government’s own admission, foreign buyers represented only about 5 percent of all sales. This is a classic example of the market changing because of psychology. But at the end of the day, the demand that was in the market in April is still there today, and at some point in time, perhaps when buyers perceive that the botton has been reached, those buyers will be back in the market, perhaps not as exuberantly as before, but they will be there.
We enter August in an uneven market. Condominium apartments continue to sell briskly with supply declining. Detached and semi-detached properties are slower to sell as average prices declines.

Aug 16

2017

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Prince Edward County Real Estate Market Update – July 2017

Shifting market conditions continue to be the order of the day, however, Prince Edward County (“the County”) has not recorded the same surge in property listings that urban markets have experienced with sellers rushing to take advantage of what they perceive to be the top of the market. Rather, in the County, market conditions remain tight, with limited choice and inventory of desirable properties to show prospective buyers. While the pace of activity has definitely slowed, new listings continue to be relatively scarce, accordingly there has yet to be any discernible trend of price softening or broader long term malaise in the market. Indeed, overall economic conditions appear to be strong with positive indicators being reported in job creation and general economic output and comparative performance. Many commentators and market observers continue to express the view that the recent calming in the market, particularly in overheated urban centres which has now spilled over into neighbouring recreational and rural markets, is both healthy and necessary for the ongoing sustainability of the market and to address what many perceived to be a genuine affordability crisis.

 

 

According to the Quinte and District Association of REALTORS® (“the Quinte Board”)’s Enhanced Statistics Statistical Query Report for July in the County, sales did in fact fall year over year for the second consecutive month with 53 properties reported sold compared to 75 in July 2016. That decline marks a 30% drop in sales. Adding July’s numbers to sales year to date brings the total number for 2017 thus far to 414 compared to 408 properties sold by this time last year. This still constitutes a 1% gain over last year’s figures, highlighting the very robust market experienced earlier in the year.
As indicated, however, new listings too are down coming in 4% behind last year’s pace for July with 118 properties being brought onto the market compared to 123 one year ago. Year to date figures further illustrate this trend showing a 7% deficit in listings thus far compared to last year with a total of 833 properties listed compared to 874 by this point in 2016. With the monthly decline in the pace of sales however, active listings have actually gone up slightly year over year with 447 properties showing as available at month’s end compared to 434 the year previous, a 3% increase. Despite that, and likely due to the chronic lack of inventory experienced for most of this year, those properties that are available tend not to linger on the market for long. In fact, the Quinte Board’s Enhanced Statistics Statistical Query Report indicate that the average days on market fell a remarkable 53% with properties in the County selling on average in only 32 days compared to 75 days last July.
Finally, and while subject to the vagaries of the particular cross section of properties that did sell in the County, the increase in average sale price in July is further evidence of the ongoing strength of the real estate market in the County, as well as the continuing desirability of and demand for properties in this trading area. Specifically, the average sale price of properties sold in the County in the month of July came in at $373,442, 20% higher than July 2016 when it was recorded as $312,391.
While still probably too early to tell, many indicators point to this summer’s moderation or calming in the real estate market as being a temporary pause and necessary recalibration. This appears to be prompted by an extended and unsustainable surge in both sales and property prices which contributed to increasingly strident concerns related to what was perceived to be a frothy and overheated market, bringing with it the very real risk of an abrupt and violent correction. This paired with the fact that debt and affordability issues, particularly in urban centres, were pushing an ever increasing segment of society out of the market, provides further support for the perspective that the market is simply experiencing a healthy and well needed soft landing that will simply contribute to its long term sustainability and viability moving forward

Jul 12

2017

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Toronto Real Estate Market Update – June 2017

June’s residential resale market data is as bewildering as the data was in May. The attention getting news is that sales were lower by 37.3 percent compared to sales achieved in June 2016. Last year 12,725 properties were reported sold. This June only 7,974.

 

 

Normally when sales are off by almost 40 percent other key market factors are also trending into negative territory. For example, the average days that properties are staying on the market, and the sale price to list price ratios. Ironically these aspects of the market are showing resilience. In June (on average) all properties reported sold spent only 15 days on the market. During June 2016, all properties were reported sold in only 15 days as well. It must be remembered that last year was a record breaking year for residential property sales in Toronto.
Not only did most properties sell quickly, but they sold on average for their asking price or more. Detached houses in the City of Toronto all sold for 100 percent of their asking price. In the eastern trading areas, they sold for 101 percent. Semi-detached property sales for the most part were even stronger coming in at 103 percent of their asking prices. Even condominium apartments sold for 101 percent of their asking price.
These two aspects of the market indicate that buyers are prepared to move quickly for the properties they want, and sellers are getting their asking prices or higher, and as indicated above, these sales are taking place at the same pace as they did during last year’s record breaking market. As a footnote, it should be noted that with so many properties having been listed more than once in the lst two months, it is hard to determine if days on market and sales to list ratios are reflecting accurately.
One other aspect of the market should be highlighted. That is the months of inventory. Over the past two months inventory levels in Toronto have increased dramatically. In May inventory levels were up almost 50 percent compared to the same period last year. During the month of June, 19,614 new properties came to market, almost 16 percent more than the 16,918 properties that came to market in 2016. However, notwithstanding these massive increases in inventory, at the end of June active listings only totaled 19,680. At 19,680 available properties for sale the months of inventory was still only 1.2 months based on a 12 month moving average.
Although the market stalled in May and in June, there is still insufficient inventory to meet demand, even with many buyers on the sidelines waiting to see how Toronto’s residential resale market will unfold.
Average sale prices continue to be higher than prices compared to last year. Detached houses in the City of Toronto sold for $1,386,524 a 10.1 percent increase. Semi-detached houses at $987,404 were similarly up by 8.1 percent. The most dramatic increase occurred in the resale price of condominium apartments. The average price in the City of Toronto came in at $552,619, a 23.2 percent higher than last year at this time.
In the central core of the city the average sale price for condominium apartments came in at $619,428, with all sales taking place in just 15 days and at 101 percent of the asking price.
Although prices are considerably higher than they were a year ago, they  have come down dramatically from the highs of April. At the mid point of the month the average sale price for homes in the greater Toronto area was $949,470. That price has steadily drifted down since then. Over the past few weeks it appears have stabilized around $775,000, which is still higher than the average sale price of $747,018 in June of 2016.
It is becoming increasingly clear that there are two types of buyers. Those that either of necessity or opportunity are taking advantage of the historically low mortgage interest rates and buying the properties they like, and those buyers that have hit the pause button on the assumption that prices might yet fall to lower levels. As indicated, it appears that price declines have stopped, but we will not be certain until we have at least 6 to 8 weeks more of average sale price information.
The pattern that is developing is similar to how the market unfolded after the B.C government implemented a foreign buyer tax. The market went into pause mode, with sales declining rapidly. A year later the Vancouver market is reporting record level sales and prices, with the government once again contemplating further measures it might implement to curb the market.
Conclusion for Infographic,
The implementation of the foreign buyers speculation tax has caused the market to stall with sales off by almost 40 percent. Buyers have hit the pause button anticipating lower prices.

Jun 27

2017

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Toronto Real Estate Market Update – May 2017

There have been a number of changes in the Toronto and area residential resale market in the last two months, and yet in many ways it continues to resemble the market that had politicians and economists expressing sustainability concerns in February and in March.

 

 

 

How is the market different?
It can be summed up in one word: supply. The number of properties in the market is substantially higher than it was just two months ago and as compared to the same time last year. At the end of May, there were 18,477 listings available to buyers. This compares with only 12,931 listings available in May 2016, a stunning 42.9 percent increase.
The available inventory spiked as a result of all the new listings that came to market. In May 25, 837 new listings came to market. In May 2016 only 17,356 new properties became available for sale, an eye-popping increase of almost 49 percent. In considering the number of new listings that came to market, one must exercise caution. Properties that did not sell during the month were often “listed” on multiple occasions in an effort to find a list price that would attract buyers, especially those properties that were expecting multiple offers and failed to receive them. So how real the new listings number is that has been reported is questionable.
It should also be noted that the bulk of the new inventory coming to market in May was in the 905 region of the greater Toronto area. For example: whereas the increase in inventory was up by 48.9 percent in the greater Toronto area, it was only 24.7 percent in the City of Toronto. More surprisingly, whereas active listings increased by 42.9 percent in the greater Toronto area, the increase in active listings in the City of Toronto was an insignificant 1.8 percent.
This disparity is probably due to the Province’s announcement that it will implement a foreign buyer’s tax of 15 percent of the purchase price of properties. There has been a high concentration of foreign buyers in the 905 region, particularly in Richmond Hill, Markham, and Vaughan. The threat of this tax may have caused sellers waiting for prices to continue rising to put their properties on the market in anticipation of the new foreign buyer’s tax.
How is the market still the same? Firstly, and notwithstanding the plethora of new listing that came to market, the months of inventory available to buyers was only 1.1 months. By any measure this is an inadequate supply, still favouring a seller’s market. By contrast, at the end of May 2016, which was a record breaking year, there were 1.6 months of inventory in the greater Toronto area and 1.9 months in the City of Toronto.
Secondly, properties continued to sell quickly. In fact, on average all properties sold in 11 days throughout the greater Toronto area, as compared to 15 days last year, a decline of almost 27 percent. In Toronto’s eastern trading areas the average days on market was only 10 days and even lower in the trading areas that encompass popular neighbourhoods such as Riverdale, Leslieville, and the Beaches.
Thirdly, properties not only sold quickly, but they continued to sell substantially above the list price. On average all properties in the greater Toronto area sold for 104 percent of their asking price. In the City of Toronto the sales- to-list ratio was even higher, with all sales coming in at 106 percent of their asking price. In May 2016 all properties in the City of Toronto sold at 105 percent of the asking price. Not one trading district in the entire City of Toronto saw sales on average less than 105 percent of the list price, with some districts reporting sales-to-list ratios of more than 110 percent.
Fourthly, average sale prices continue to rise. In May the average sale price came in at $863,910, an increase of almost 15 percent compared to May, 2016. In the City of Toronto detached property sales came in at $1,503,868 a 6.6 percent increase compared to last year. Similarly semi-detached properties increased by 27 percent to $1,062,318 and condominium apartments continued their increase in value to $564,808, an increase of almost 28 percent compared to a year ago.
A notable change was the pace of sales. Last May there were 12,790 reported sales for the greater Toronto area, an all-time record month for sales. This year reported sales of properties came in at 10,196, a decline of 20 percent. May marks the second consecutive month in which sales have decreased on a year-over-year basis.
The consensus is that the change in the market place will persist for a few months, perhaps into the fall or later, as buyer and seller expectations adjust. But as the Vancouver market demonstrated in May, governmental measures to cool that market and to bring a measure of affordability have failed. The Vancouver market cooled dramatically after the B.C. government announced legislation to curtail it, namely a foreign buyer tax, like the one announced for Toronto and Southern Ontario. But in May the Vancouver market was once again breaking records with an average sale price of $1,830,956 for detached properties, up 5 percent from the same month last year and just surpassing the previous high of $1,826,541 achieved in January 2016.
Expect the same scenario to play out in the Toronto residential resale market over the remainder of 2017 and into 2018.

Jun 16

2017

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Muskoka Real Estate Market Update – May 2017

The best way to sum up the Muskoka and area recreational marketplace at the end of May is as follows: the number of sales is increasing, while the volume of available inventory is decreasing. This is clearly not an ideal market scenario, particularly for hopeful buyers.

The story on the inventory side unfolds as follows. Generally, both for recreational and residential properties, the numbers are down. The Muskoka – Haliburton Association of Realtors reports that year to date it has processed 3,964 listings in Muskoka, Haliburton and Orillia. That compares to 4,365 during the same period last year, a decline of 10 percent. The decline in available recreational properties is even more severe.

At the end of May there were only 726 properties available for sale across the entire region. Last year there were 1,123, a staggering decline of 35 percent. At the end of May 2015 there were 1,348 recreational properties available for sale. The same is happening in the three major regions in which Chestnut Park is active.

In the Haliburton Highlands there were only 154 properties available for sale, a decline of 39 percent compared to the 253 that were listed for sale in 2016. In 2015 there were 337 recreational properties available for potential buyers to purchase. Supply in the Haliburton Highlands has dwindled by about 55 percent in two years.

Lake of Bays is following the pattern of the Haliburton Highlands. At the end of May listings of recreational properties were down to a mere 75, a sharp 30 percent decline compared to the 105 available last year. In 2015 there were 132 available properties.

Although there are more properties available on Muskoka’s big lakes, Lake Rosseau, Lake Joseph and Lake Muskoka, on a percentage basis the decline in available inventory is the same as that in Lake of Bays. At the end of May there were 273 properties listed for sale, a 30 percent decline compared to the 337 available last year. In 2015 there were 382 available recreational properties.

Notwithstanding these declines in available inventory, sales of recreational properties are on the rise in all regions. Over all the Association reports that 400 properties have been reported sold year-to-date. That represents an increase of almost 12 percent compared to the 359 properties sold in 2016. In 2015 only 278 recreational properties were reported sold at this time of year.

The region showing the greatest increase in sales year-over-year is Lake of Bays. Last year at this time a paltry 27 recreational properties had been reported sold. This year that number has jumped to 45, an increase of 66 percent.

Sales on Muskoka’s big lakes are also up. Last year 91 properties were reported sold. At the end of May 2017, that number has climbed to 108, an increase of almost 19 percent.

The only region showing a decline in sales is the Haliburton Highlands. I suspect that that decline is due to a supply shortage rather than a lack of buyer demand. It must be remembered that inventory decline in the Haliburton Highlands was greater than any other region. Last year 111 recreational properties were reported sold, this year only 101, a decline of approximately 10 percent.

A decline in supply in conjunction with rising sales usually means rising average sale prices. A look at sales and average sale prices for all reported sales on Muskoka’s big indicates that year-over-year prices are rising. In fact prices have been rising since 2010, with, of course, fluctuations on the various lakes depending on the volume of very high priced properties that have been reported sold.

In May the average sale price for all properties reported sold on Lake Rosseau, Lake Joseph, and Lake Muskoka was $2,139,214. Last year the average sale price for all recreational properties reported sold on the big lakes was $1,962,797. This represents a year-over-year increase of 9 percent. Compared to the average list price for all properties sold on the big lakes the sale-to-list ratio is approximately 95 percent, only slightly better than the 94 percent achieved in 2016.
Chestnut Park’s number year-to-date have been very strong, notwithstanding the dramatic decline in inventory. Chestnut Park continues to be the dominant brokerage in the Port Carling area, outdistancing the next nearest competitor office by more than 33 percent in dollar volume of reported sales. Chestnut Park’s sales representatives were responsible for approximately 27 percent of the dollar volume of all reported sales. Chestnut Park’s sales have totaled more than $98 Million to the end of May.

At this stage it is difficult to forecast how the latter half of 2017 will unfold. The Provincial Government announced measures to cool the red hot Toronto and area residential resale market on April 20, 2017. For the most part those measures do not apply to the Muskoka and area market, yet the psychological affect of those measures may in infiltrate the Muskoka market and cause and cause buyers to be more deliberate and patient. Most of the measures announced in April should have had no impact on the Toronto market – only 4 to 5 percent of all buyers were foreign buyers – yet the market in the greater Toronto area is o by approximately 20 percent year over year.

May 14

2017

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Toronto Real Estate Market Update – April 2017

The Toronto and area marketplace behaved uncharacteristically in April. For the first time in many years the number of sales this month was fewer than the number of sales reported in the corresponding month the year before. In April there were 11,630 sales of residential properties in the greater Toronto area, a 3.2 percent decline compared to the 12,016 sales that were reported last year. The immediate question is – has the Toronto resale market changed?

A lot happened in April. The most important development was the provincial government’s announcement that it would be promulgating legislation to help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market. The most specific of these measures was the implementation of a 15 percent non-resident speculation tax on the price of homes in the Greater Golden Horseshoe area purchased by individuals who are not citizens or permanent residents of Canada or by foreign corporations, and the expansion of rent control to all private rental units in Ontario. Prior to the provincial announcement rental units in buildings built after 1991 were exempt. These two measures will take effect on April 21st and April 20th, respectively.
In April we also witnessed a dramatic increase in resale inventory. It was only a few months ago when inventory levels were 50 percent lower than they were a year ago. In just one month the negative variance was reversed. During the month, 21,630 new listings came to market, an increase of more than 33 percent compared to the 16,190 new properties that came to market in April 2016. At the end of the month there were 12,926 properties available to potential buyers, 3 percent more than the 12,554 available last year. It should be noted that even with the substantial number of new listings that came to market in April, supply levels are still historically low.
Notwithstanding the proposed affordable housing measures and the plethora of new listings that came to market, prices continued to rise, and sales continued to take place at lightning speed. In April, the average sale price for all property types in the greater Toronto area came in at $920,791, the highest average sale price on record, and almost 25 percent higher than the average sale price reported last year. In April 2016, the average sale price was only $739,762, interestingly, an all-time high record at that time.
The sales that took place did so at a record, blistering pace. All sales in the greater Toronto area took place in an unbelievable 9 days. Last year it took 15 days for all sales to take place which was a record for the month. Detached and semi-detached houses in the city of Toronto sold even faster. All detached properties sold in just 8 days. All semi-detached homes sold in 7 days. Even condominium apartments, historically selling slower than freehold properties, flew off the shelf in only 10 days.
Not only did all these property types, detached, semi-detached, and condominium apartments, sell at rapid speeds, but in every category, and at every price point, including the most expensive properties in Toronto’s central core, they sold for substantially more than their asking prices. There was not one housing type or trading area where the sale price was at or lower than the asking price. In many cases the average sales price exceeded the asking price by more than 120 percent.
Even though sales were slightly down (3.2 percent) year-over-year, the average sale price for every housing type was substantially higher. Detached properties in the city of Toronto came in at $1,578,542, up 25.2 percent. Semi-detached properties came in at $1,104,047, up by 22.4 percent, and condominium apartments came in at $578,280, up by almost 33 percent. In Toronto’s central core detached properties sold on average for $2,200,000 and semi-detached properties were not far off at $1,389,400.
So what does all this data, some of it conflicting, say about Toronto’s residential resale market? Clearly demand remains strong, and even though more properties came to market, inventory levels are still insufficient. If homeowners continue to bring properties to market at the pace and level that they did in April, supply levels might, for the first time in years, move towards a more balanced market. If that happens it will only be temporary. There simply isn’t enough supply to meet the growing demand in the greater Toronto area. With more than 100,000 net migration to the greater Toronto area annually, demand will remain high. Government legislation that was designed to curb urban sprawl has resulted in a sever shortage of low rise housing, forcing buyers into high rise condominiums at a pace that exceeds builders’ ability to deliver apartments to meet our housing needs.
The Ontario Fair Housing Plan measures, even if successful, are many years away from increasing the housing supply. The only economic change that will reduce demand is a substantial increase in mortgage interest rates. With the Canadian economy still struggling, that will not happen soon. And if it did, the newly expanded rent controls combined with the ongoing need for rental accommodation will be responsible for a rental housing crisis.
Consequently with perhaps a wait-and-see lull that the new measures announced by the provincial government will create, we should anticipate that the Toronto and area market will remain robust, with average sale prices rising until they reach a point that simply renders them unsustainable. Until then, it is an arrogant and politically motivated government position, that it can deliver or control affordable housing. Toronto is not the only city in the world that no longer meets the long cherished, yet unrealistically arbitrary figure of 3 times gross household incomes as a reasonable benchmark for affordable housing prices.
A review of housing prices in other parts of the world makes it clear that there is no particular reason why housing must be affordable for the average person. Residential real estate in many cities is even more expensive than Toronto. Simply stated, Toronto has moved into the category of one of the best cities in the world in which to live.
Infographic conclusion: The proposed provincial legislation and the large number of new listings that came to market in April will cause a temporary lull in the market. Sellers will have to modify their expectations. Sales will continue but more moderately, both in time and price.