Toronto Real Estate Market Update – December 2014

The Toronto residential resale market ended 2014 in strong fashion, recording 4,448 sales, an increase of 9.6 percent compared to the 4,058 sales recorded in December of last year. December’s sales bring the year-end total for residential resales to 92,867 properties sold, the second best year ever recorded for the greater Toronto area, and only 326 sales short of the 2007 record of 93,193. If there had been more inventory in December and throughout the year, the record would easily have been shattered. Demand remained strong, even in December, but the properties available for buyers to purchase were insufficient to satisfy it, particularly at price points below $ 1 Million. For example, in December only 128 semi-detached properties were reported sold in the City of Toronto. 12 of Toronto’s 36 trading districts recorded no sales, because there simply were no semi-detached properties on the market available to buy.
The demand-inventory problem is highlighted by growing average sale prices in December, and again throughout 2014. In December the average sale price for all properties sold came in at $556,602, 7 percent higher than the average sale price of $520,189 achieved last year. On a year-to-date basis the average sale price for 2014 came in at $566,726, an all-time high, 8.4 percent higher than last year’s average sale price of $522,958. These numbers are even more dramatic when it is remembered that more than 30 percent of the sales that contributed to these prices were condominium apartment sales that averaged only $362,785 in December.
Looking back over the last decade the average sale price in the greater Toronto area has increased by an eye-popping 80 percent. In 2004 a buyer in Toronto could purchase a home for a mere $315,231. That same house today will cost $566,726. What has enabled buyers to continue to purchase properties that have increased so rapidly in price over this period of time has been mortgage interest rates. In 2004 five year rates were 4.25 percent. They rose to a high mark of almost 6 percent in late 2007, and since then have trended downward and remained stable since 2012 at under 3 percent. Since wage increases have only averaged 2 to 3 percent annually since 2004, this analysis of mortgage interest rates over time vividly illustrate how important low interest rates have been to the Toronto residential resale market over the last few years.
High end property sales were strong for December. Usually that end of the market goes quiet in December. This December 332 properties having a sale price of $ 1 Million or more were reported sold. Last year only 216 properties in this price point were reported sold, an increase of almost 54 percent. As has been the case all year, the most expensive Toronto properties are located in the City’s central core. In Toronto’s central districts the average sale price for a detached property came in at $1,558,134. Semidetached properties sold for $800,968.
The pace of sales in December slowed. For the first time in many months the average days on the market for properties sold exceed 30 days. In December (on average) all listed properties sold in 32 days, one day less than the 33 days it took in December 2013. However, depending on property type and location, some properties sold much more rapidly. For example, detached homes in Toronto’s eastern districts sold in only 19 days. Semi-detached properties, if they were available for sale, on average sold in only 21 days throughout the greater Toronto area, and a breathtaking 14 days in Toronto’s eastern districts.
In 2014 the spread in average sale prices between Toronto’s eastern and western trading districts narrowed once again. The average sale price in Toronto’s western districts came in at $527,627, only $23,000 higher than the average sale price of $504,525 achieved in the eastern trading districts. Toronto’s central districts remain the most expensive, with an average sale price of $722,489, with almost 50 percent of all sales being the lower priced condominium apartments.
Inventory levels were a concern throughout 2014, and will continue to be in the early part of 2015. In December 4,448 new listings came to market, although that is more than the 4,062 that became available in 2013, at the beginning of 2015 there were only 10,230 properties for sale, 10.4 percent less than were available at the beginning of 2014. With sales taking place at their current pace, it would take an avalanche of new listings to alter the current inventory-demand balance. At year end there were only 2.4 months of available inventory in the City of Toronto, and only 2.2 months of inventory in the greater Toronto area.
The big story for 2014 was condominium apartment sales. In 2014 the myth that developers had overbuilt condominium apartments was finally put to rest. Condominium apartments are not only an acceptable way of life in Toronto, but now represent the largest housing sector by type. For example, in December condominium apartment sales accounted for 30 percent of all reported sales in the greater Toronto area, and 52 percent of all sales in the City of Toronto. Sales of condominium apartments in the City of Toronto increased by 16.1 percent, with a corresponding increase in average sale prices of 5.4 percent. Clearly condominium apartments are not only Toronto’s most affordable housing type, but buyers are not only choosing condominium apartments because of affordability, but also because of life style.

Toronto Real Estate Market Update – November 2014

In November the Toronto residential resale market appeared to pause from the torrid pace that it has been on for the bulk of 2014. Although the market’s performance was not an abrupt change from its 2014 pattern, it did not produce the outstanding numbers that we have become used to this year. For example in October 8,552 properties were reported sold, 8 percent higher than the 8,051 sales reported in October 2013. In November there were 6,519 sales, only 2.6 percent higher than the 6,354 sales reported in November 2013.

The drop in the number of sales from October to November is not a matter for concern. The pattern of residential resales in Toronto is such the there is a drop in sales from October through to December and January as buyers and sellers focus on seasonal matters other than house purchases. However, the fact that this November saw an increase of only 2.6 percent compared to last year is an interesting change. On further examination the underlying reason appears to be lack of inventory as opposed to the waning of buyer demand.

If demand was waning it would be reflected in declining average sale prices. That did not happen in November. The average sale price came in at $577,936, a 7.4 percent increase compared to the average sale price of $538,347 for November 2013.The average sale price for the City of Toronto (416 region) was higher at $616,130. It was $633,078 in October. This number is somewhat deceptive in that it includes condominium apartment sales which on average sell for less than $ 400,000.

A further indication that the relative decline in the market in November was driven by a lack of inventory as opposed to demand is evidenced in the volume of sales and average sale prices for detached and semi-detached properties. In November the number of reported sales for detached homes in the City of Toronto actually declined by 0.3 percent to 904 properties, yet the average sale price increased by 9.4 percent to $935,122. The same was true for semi-detached homes. Sales declined by 2.2 percent to 261 properties, yet the average sale price increased to $667,178, an increase of 4.2 percent. Declining demand is associated with declining average sale prices, not increasing prices. The constantly increasing average sale prices throughout 2014 have vaulted Toronto into the category of having very expensive real estate even on an international level.

It is not as easy to conclude that the decline in the average sale price for Toronto’s most expensive real estate, detached homes in the central districts, is not due to some market shift. In November the average sale price for this property type declined to $1,462,895. This was the third monthly decline in a row. In September the average sale price for detached homes was $1,505,877, dropping to $ 1,498,788 last month. In November the number of properties having a sale price of $1 Million or more also declined. In November 589 properties in this price category were reported sold. A dramatic decline from the 803 properties reported sold in October. Another factor worth noting is that the number of days on market for expensive central district homes also increased in November to 24 from 18 the month before.

As discussed, inventories remain a concern, now extending even to condominium apartments. During the month of November only 8,789 properties became available for sale in the greater Toronto Area. This compares with 9,281 last year, a decline of 5.3 percent. Consequently heading into December there were only 14,717 properties available for buyers to purchase, a decline of 8.5 percent compared to the 16,092 that were available at the beginning of December 2013.

What we are also seeing is a dwindling of condominium apartment supply. In the City of Toronto, where most condominium apartments are located, 2013, new condominium apartments were placed on the market for sale in November. In October 2,740 condominium apartments came to market, a decline of 25.8 percent. As a result the total number of active listings at the beginning of December was 3996, down 8.6 percent from the 4373 condominium apartments available in October.

Condominium apartment sales, no doubt due to their much lower price point, paced the market in November. Compared to a year ago, condominium apartment sales were up by 11.2 percent in the City of Toronto to 1,199 units. Average sale prices however were not as brisk. The average price for a condominium apartment in Toronto increased by only 2 percent as compared to last November. The average sale price for a condominium apartment in Toronto is now $394,225, almost 50 percent less than semi-detached homes which came in at $667,178 in November.

As 2014 comes to an end all eyes have been focused on year-to date sales. The record for total number of residential sales occurred in 2007. In that year 93,193 properties were reported sold. As at the end of November the Greater Toronto market had delivered 88,462 residential property sales. Last December 4058 properties were reported sold. Realtors in the greater Toronto area would have to produce 4,732 sales to set a new residential resale sales record. That means 673 more properties would have to be sold in December this year compared to 2013, or 16.5 percent. Based on recent positive monthly sales variances, that kind of performance would exceed historical averages by 100 percent. It is safe to say that the 2007 record will survive 2014.

Toronto Real Estate Market Update – September 2014

After a light breather in August, the Toronto residential resale market bounced back with some vigour in September. It would appear that August was Toronto’s vacation month with buyers and sellers focusing on seasonal matters rather than real estate sales. That was not the case in September. There were 8,051 reported sales in September, up almost 11 percent compared to the 7,257 sales last September. This double digit positive variance was consistent with the positive variances experienced by the market prior to August.

It is not surprising to note that the resurgence in sales also resulted in a spike in the average sale price. In September the average sale price for all properties sold in the greater Toronto area was $573,676, almost 8 percent higher than the September 2013 average sale price of $532,455. The average sale price for property sales in the City of Toronto (416 area) was $624,851, or 9 percent greater than the average sale price for the broader market. The highest monthly average sale price to date has been $584,925. That high was achieved in May of this year.

The central districts in Toronto continue to be the Greater Toronto’s most expensive real estate. The average price for all sales in the central districts was $739,657. This number would be substantially higher if condominium apartment sales were extracted. Most of Toronto’s condominium apartment sales are located in the central districts. The average sale price for detached properties in the central districts was $1,498,788 (a slight declined from August, which came in at $1,505,877.) Semi-detached property sales came in at $874,719. Detached homes in the central districts sold for 99 percent of their asking price. Semi-detached homes sold for an eye-popping 106 percent of their asking price, and they did so in a breathtaking 12 days.

On the whole the market was rapid, with all sales taking place within 25 days after properties were listed for sale (on average). Last year it took 27 days for all properties to sell. This is not record speed. There have been months when all properties sold in 21 days, but September’s was still a very rapid pace, making it extremely difficult for buyers to react.

The city’s eastern districts, no doubt because of their lower price points, continue to be in most demand. Sales of all detached homes took place in only 17 days, at 102 percent of the list price. Sales of semi-detached homes took place in a shocking 13 days at a startling 106 percent of their original asking price. Buyers hoping to purchase a house in Riverdale, Leslieville, North Danforth and the Beach essentially have to be prepared to pounce as soon as a listing hits the market.

Condominium apartment sales are becoming a considerable force in the Toronto market place, again no doubt because of their accessible price point. Although sales are not taking place as quickly as Toronto’s detached and semi-detached properties, the pace of sales is relatively brisk. In September it took 33 days for condominium apartments in the City of Toronto to sell. There were 82 percent more condominium apartments for sale in Toronto than the combined number of detached and semi-detached properties (4,579 condominium apartments as compared to 2,510 detached and semi-detached properties). As a result buyers have the benefit of both time and selection. Notwithstanding, condominium apartment sales surged by almost 16 percent compared to sales in September 2013, and average sale prices rose by 9.2 percent to $395,505. In Toronto’s central districts (where 66 percent of all of Toronto’s condominium apartments are located) the average sale price came in at $453,922 in September.

Inventory levels continue to be a concern. Although the number of new listings is increasing every month, these new listings are being quickly absorbed. In September 15,692 new listings came to market, 5.8 percent more than the 14,828 new listings that came to market last year. As a result, beginning in October there were 19,165 properties available for buyers to purchase in the Greater Toronto Area, 5.1 percent fewer than the 20,194 properties available in 2013. These listings represent only 2.2 months of inventory, far less than what would be required for a balanced market. We would need closer to 4 months of inventory to achieve a balanced market.

It is not surprising that with average sale prices rising as quickly as they have that sales of properties having a value exceeding $1 Million have grown dramatically. In September 669 properties with a sale price in excess of $1 Million were reported sold. There were 120 properties with a sale price in excess of $2 Million that sold, 7 of which were condominium apartments.

Expect more of the same in October. As indicated in the August report, there have been no economic changes that would have a negative impact on the resale market. Mortgage interest rates are historically low (2.75 percent is currently available), buyer demand remains strong, and inventory levels remain low. The perfect storm, with sellers safely on shore, and buyers in leaky boats on the turbulent sea. The only dark cloud on the horizon is the equity markets.

Toronto Real Estate Market Update – August 2014

Metaphorically speaking the Toronto residential resale market took a bit of breather in August. The numbers weren’t bad, but they were not as robust on a year-over-year comparison. Throughout 2014 the monthly positive variances compared to the same month last year have been strong, often approaching or exceeding double digits. This August the variance compared to August 2013 was only 2.8 percent, the lowest positive variance we have seen this year. In absolute numbers, August saw 7,600 residential resales. That compares to 7,391 a year ago.

It is impossible to draw market conclusions based on only one month’s data. It could be that August represented the last vacation month of this year, and both buyers and sellers took a holiday from the frenetic market that has been the norm in 2014. We await September’s results eagerly to determine if there has been any kind of shfit in the Toronto area market place. It must not be forgotten that the tight availability of inventory, other than condominium apartments, has also played a major role in shaping Toronto’s resale market.

Notwithstanding a slowdown in sales, comparatively speaking, average prices remained strong. August’s average sale price came in at $546,303, 8.9 percent higher than the $501,677 achieved in 2013. On a year-to-date basis Toronto’s average sale price is now $562,504. In 2013 the average sale price for the year came in at $522,983. In basic terms, the average house in the Greater Toronto Area is about $40,000 more expensive this year than last.

As has been reported throughout this year the most expensive trading area remains Toronto’s central core. In August the average sale price for a detached house in central Toronto was $1,505,877. These properties also sold very quickly, averaging only 28 days on the market. On average they sold for 98 percent of their asking price.

On the whole the market was still very rapid. For the entire Greater Toronto Area all properties, regardless of type, sold in only 27 days. Last year it took 29 days. It must be remembered that by historical standards these statistics indicate that sales are taking place at the speed of light.

The most in-demand neighbourhoods continue to be found in Toronto’s eastern districts. Detached home sales in the eastern districts all took place in just 17 days, with sales in the popular Riverdale and Leslieville areas taking place in a remarkable 11 days. Semi-detached home sales were even faster. All sales of semi-detached homes occurred in an eye-popping 12 days, and for a sale price that was 103 percent of the list price.

As mentioned earlier, inventory has shaped Toronto’s recent resale market. Lack of product, particularly in sought-after neighbourhoods, has been the primary reason that prices have increased so dramatically. New inventory in August will not change that problem. In August 11,733 new properties were listed for sale in the greater Toronto area. This compares with 12,103 last year, a 3.1 percent decline. The result is that beginning in September there will be 17,882 properties available for buyers to purchase, almost 5 percent less than last year at this time. Currently the greater Toronto area has only 2.3 months of inventory. The City of Toronto has 2.4 months. A market place requires almost 4 months of inventory to be regarded as balanced.

Condominium apartment sales continue to account for most of the reported sales in the City of Toronto. There were 2,760 sales reported for the City of Toronto in August. Of those 2,760 sales, 1,344 were condominium apartments. There is little doubt that Toronto is becoming a City of impressive intensification, with more apartments on the way. During one week in August alone Toronto City Council approved the construction of 7,000 units. It is estimated that over the next few years there will be a further 70,000 condominium apartments in the City of Toronto. The majority of them have already been sold. Although not at the same pace as freehold, condominium apartment average sale prices continue to rise. In August the average sale price rose to $370,899, 4.1 percent higher than for the same period last year.

High end property sales continue to remain strong. In August 518 properties having a sale price in excess of $ 1 Million were reported sold, and 77 with a sale price that exceeded $ 2 Million. Interestingly 5 of those $ 2 Million plus sales were condominium apartments.

Going forward September should return to the robust pace of sales that we witnessed earlier in the year. Nothing has changed that would influence the market otherwise. Mortgage interest rates continue to remain historically low, inventory levels are also historically low, and aside from August’s breather, which may be overstating it, demand hasn’t appeared to abate. It will be interesting to see if inventory levels pick up in September and the following fall months. Higher inventory levels will moderate price increases while giving buyers some choice and time to decide – perhaps even more than 30 days.

Toronto Real Estate Market Update – July 2014

July’s resale market performance was one of the strongest on record for the greater Toronto area, even though it was the third monthly drop in reported sales. In May 11,034 sales were reported, 10,158 in June and July 9,198. The monthly decline is consistent with seasonal patterns. The strongest month is usually May, with sales dropping during the summer months as both buyers and sellers focus on vacations and enjoying our limited, but warmer weather. A further drop in sales in August is also a part of the typical selling pattern.
Having said that the 9,198 residential resales achieved in July now has the greater Toronto market on track to post the strongest year in the history of statics keeping by the Toronto Real Estate Board. In 2007, the year before the recession which started in the fall of 2008, 93,193 properties were reported sold. On no occasion have sales ever topped 90,000 except for 2007. The second best year on record is 2011 with 89,096 residential properties reported sold. To date 57,910 properties have been reported sold in 2014. At this pace the year should achieve 94,000 to 94,500 sales making 2014 the best year on record.
Strong prices invariably follow strong sales markets. In July the average sale price came in at $550,700, 7.5 percent higher than the $512,286 recorded in 2013. The highest monthly sale price on record was achieved in May of this year. It came in at $585,037. It is not uncommon for the average sale price to decline in June and July. Expect the average sale price to come in at approximately $550,000 in August, before jumping to $ 575,000 or more in September. It is unlikely that the record average sale price of $585,037 will be exceeded during the remainder of this year.
In July all properties sold (on average) in 24 days. Although slower than June’s  pace at 21 days, 24 days is exceptionally fast for July. For example last July it took 28 days for all properties to sell. In some trading areas days on the market were even faster. The east end neighborhoods close to the central core of the city remain frenzied. In neighborhoods like Riverdale, Leslieville, and the Beach the pace of sales taking place was on average a little over 13 days. As has been reported before, condominium apartment sales are not as quick as sales of detached and semi-detached properties.
Oakville continues to be the most expensive area to live in the greater Toronto area. The average sale price for all properties sold in Oakville in July was $771,535. In the City of Toronto central properties (excluding condominium apartments) were the most expensive for buyers to purchase. Detached homes sold, on average for $ 1,360,816. Semi-detached homes sold for $751,287. Not only did they sell for these strong prices, but sold quickly, in only 21 and 14 days respectively. All semi-detached homes in the central districts sold for 103 percent of the initial asking price.
Condominium apartment sales in the City of Toronto are continuing to accelerate. In July condominium apartment sales were up 13.4 percent compared to the same month last year. In June sales were up 21.4 percent compared to June 2013. The 13.4 percent increase in July was the largest of any housing type. Second were townhouse sales which increased by 8.3 percent.
With average sale prices continuing to rise, condominium apartments may be the last refuge for some buyers, especially first time buyers. The average sale price for condominium apartments in July was $ 379,002, up 4.7 percent over July 2013. Compared to the average sale price for all other properties ($550,700), condominium apartment prices are approximately 45 percent less expensive. If interest rates were to rise, condominium apartments will become even more attractive.
Low inventory levels continue to be responsible, at least in part, for the strong sales achieved this year. In July 15,187 new properties came to market. Although this number was 8.2 percent greater than new listing that were placed on the market in July 2013, at the beginning of August there were still fewer available properties for buyers to purchase than last year. Last year there were 20,514 properties available for sale. This year there are only 19,549, 4.7 percent fewer. Until the number of new listings coming to market outpaces sales over a period of months, sales will continue at their  brisk pace and average sale prices will continue to rise by about 6 to 8 percent higher than the same month last year. Fortunately historically low interest rates are continuing to keep home ownership within the grasp of most buyers. A  family with gross family income of just over $ 80,000 and a modest down payment still qualifies to purchase an average priced condominium apartment in the City of Toronto.
Of the 9,198 reported sales for July only 3,315 were in the City of Toronto. The other 5,883 sales representing 64 percent of all property sales were in the 905 region. It may be time and descriptively more accurate for the Toronto Real Estate Board to change its name to the Greater Toronto Real Estate Board.

Toronto Real Estate Market Update – June 2014

June’s market performance was not as strong as May’s (11,049), but with 10,180 residential properties reports sold it was much stronger than June 2013. Last year only 8,821 properties were reported sold. This June the 10,180 properties sold by Toronto and surrounding area REALTORS® exceeded last year’s performance by 15.4 percent. June’s results represent the second strongest month this year to date.

With strong numbers in reported sales, the average sale price for properties sold in the greater Toronto area continued to be well above last year’s average sale price, although not as strong as the record setting $585,454 monthly average sale price for May. Generally, monthly average sale price declines in June, July, and August. This year was no exception. The average sale price came in at $568,953, lower than May’s by almost $20,000, but almost 7 percent higher than the $529,614 average sale price achieved in June of 2013.

The pace of sales remained strong in June. All properties, on average sold in 21 days, only one day slower than results in May, and 2 days, or 8.3 percent, faster than sales in June 2013. As was the case in May, all reported properties sold (on average) sold for at least their asking price. In the City of Toronto all properties sold (on average) for 101 percent of their asking price. This number was substantially higher in the case of detached and semi-detached properties: Condominium apartment sales were neither as fast, nor at a number approaching their asking price, yet frothy nonetheless.

It was not surprising that the number of high-end properties reported sold declined dramatically from May (properties having a sale price of $ 1 Million or more). In May 946 properties were reported sold in this category. This was an all-time high. In June sales in this category slipped to 775, a decline of 18 percent. As the summer months arrive it is common to see sales at this price point decline as buyers and sellers focus on holidays, the end of school terms, and recreational properties.

The most expensive area to live in the greater Toronto area was Oakville. The average sale price of all properties sold there was $ 808,944. The average price in Toronto’s central districts came in at $ 726,072, but included 1,011 condominium apartment sales which dramatically reduced the average sale price. Detached homes in the central districts averaged $1,448,267. The average price of a detached home in Oakville in June was only $940,847.

The average price of semi-detached homes in Toronto ranged from a high of $839,786 in the central districts to a low of $559,905 in Toronto’s western trading areas. A buyer had to move quickly to find and buy a semi-detached house in Toronto. On average all semi-detached houses sold in an eye-popping 11 days, and even faster in Toronto’s popular eastern districts, particularly neighbourhoods like Riverdale, Leslieville, and the Beach.

As has been discussed in previous reports, condominium apartment sales, though strong, are not as frothy as detached and semi-detached sales. In the City of Toronto 1,578 condominium apartment sales were recorded in June. This represents a 21.4 percent increase compared to sales for the same period last year. Average sale prices also increased as compared to last year. The average sale price for a Toronto condominium apartment came in at $390,569, an increase of 6.3 percent compared to last year’s average sale price. Sales of Condominium apartments were slower than freehold sales (averaging 30 days with sale prices only 98 percent of asking price).

To date 48,758 properties have been reported sold in the greater Toronto area. At this pace sales for 2014 could come in as high as 95,000 residential properties. This would break the record of 93,193 properties reported sold in 2007. With no indication of a mortgage interest rate hike during the remainder of 2014, a new record for residential sales in the greater Toronto area has a strong possibility of being achieved.

Toronto Real Estate Market Update – May 2014

The pace of Toronto’s residential resales accelerated in May. More sales were reported in May than in any month this year and last year. The highest number of sales reported in 2013 was 9,946 in May of that year. This May 11,079 properties were reported sold. This represents an 11.4 percent increase compared to the 9,946 properties that were reported sold in May 2013. The 11,079 sales was a record, the highest number of sales ever reported for the month of May for the greater Toronto area.

It is not surprising given the market’s performance in May, that in addition to record sales volumes, the monthly average sale price also hit a new record. The average sale price for all properties sold in the greater Toronto area came in at $583,204, the highest average monthly sale price on record, surpassing the previous high of $578,118 achieved only last month. May’s average sale price was 8.3 percent higher than the $540,544 average sale price the greater Toronto resale market delivered last May.

Not only did both sale prices and volumes produce records in May but these records were achieved in record time. The average days on market was only 21 days. Last year it was 23. In many trading areas the pace of sales was even faster. For example in Toronto’s eastern districts, all reported sales took place in only 15 days, a remarkable pace. Not only did all properties sell at a record pace, but all reported sales achieved sale prices that equaled or were greater than the list price. In the City of Toronto all properties sold for 101 percent of their asking price. In the eastern trading areas they sold for 103 percent of their asking price.

The market was also strong at the higher end, properties having an average sale price of $ 1 Million or more. In that category 946 properties were reported sold in May. This represented a 34 percent increase compared to the 702 sales that occurred in this category in May last year. It is interesting to note that 171 properties were reported sold having an average sale price exceeding $ 2 Million or more, a 43 percent increase compared to the 120 that sold last year. A cynical analysis would hold that with average sale prices increasing at the pace they have, what was an “average” house only a few years ago is now classified as a high end sale.

The most expensive place to live is in Toronto’s central districts. The cost of a detached home in central Toronto is now $1,441,785. A semi-detached home is selling for $ 901,659. Prices are no where near as high in the 905 region. The average price of a detached home in the 905 region is only $648,439, less than half of what it would cost to be in a “similar” home in Toronto’s central districts. A semi-detached home can be purchased in the 905 region for $443,644… $458,000 less than buying a semi-detached home in Toronto’s central districts.

Not all of the City of Toronto is as pricey as the central districts. The average price of a detached home in Toronto’s western districts came at $762,528, and a similar property can be found in the eastern districts for $631,594. Semi-detached properties, as expected, sold for less on average. In the western districts the average sale price in May was $553,912 and $ 637,347 in the eastern districts. Interestingly and no doubt due to short supply and the variety of housing quality, there is almost no difference in the average sale price between detached and semi-detached properties in Toronto’s eastern districts.

Toronto’s overall average sale price would have been higher if not for condominium apartment sales. This sector of the market, though robust, is simply not selling at the same pace as detached and semi-detached sales in the City of Toronto. In May 1,565 condominium apartments were reported sold in the City of Toronto. Including the 905 region there were 2,234 sales in total, or just over 20 percent of the entire market place. The average sale price for condominium apartment sales in May was $401,809 (also a record). Unlike other housing forms it took 29 days for all sales to take place and for average sale prices that were only 98 percent of the asking price. The difference between condominium apartment sales and freehold in the City of Toronto is inventory. In May there were 5,133 active condominium apartments available for sale. The total number of properties available for sale, including condominium apartments, was only 8,310. In other words condominium apartments available for sale represented more than 60 percent of all available properties for the entire City of Toronto.

Generally inventory levels remain low. At the end of May there were only 18,931 properties available in the entire greater Toronto area. This is 1 percent less than the 19,080 properties available for sale at this time last year.

Going forward we should anticipate more months like May. The market is strong for a variety of reasons, but predominately because of low mortgage interest rates. As this report was being prepared most lending institutions were offering 5 year fixed rates less than 3 percent. There is no likelihood that rates will be increasing in 2014. As a result, the market is on pace to deliver more than 90,000 property sales in 2014. This would make 2014 the second best year on record for property sales, surpassed only by the 93,193 reported sales achieved in 2007.

Muskoka Real Estate Market Update – Spring 2014

For the second year in a row the recreational market has been negatively impacted by weather conditions. Winter has been long and hard, not only making access to cottage properties almost impossible, but creating an atmosphere not condusive to buying a recreational property. Cottages are associated with warm, sunny days, welcoming lakes, and motor and sail boats on the horizon. With snow drifts often taller than cottages, and frigid temperatures, those summer visions evaporated. There may not have been the high water issues that we experienced last year, but conditions were sufficiently challenging to keep sellers from considering listing their properties for sale.

The decline in inventory in the first four months of 2014 is quite striking, a pattern that might be a reflection of broader market trends. During the first third of the year the Muskoka Haliburton Association of Realtors reported processing 3,097 properties for sale. This compared to 3,235 properties for sale during the same period in 2013 and 3,664 in 2012, declines of 4.3 and 15 percent respectively. This pattern repeated for recreational properties.

In the Haliburton region inventory of recreational properties has declined from 295 available properties in 2012, to 236 in 2013 and down to only 173 this year. These declines amount to 26 percent since 2013 and 41 percent since 2012. The declines on Lake of Bays are similar but not as dramatic. There were 109 recreational properties available for sale in 2012, 100 in 2013, and 92 this year, declines of 8.2 percent and 15.6 percent. The situation on the Muskoka Lakes, Lake Rosseau, Lake Joseph, and Lake Muskoka is not dissimilar. There were 243 active available listing of recreational properties in 2012, 232 last year and only 200 this year, declines of 4.5 and 17.7 percent. The Association reported only 760 recreational properties for all Association trading districts combined, down from 1,025 in 2012 and 867 last year. The decline from 2012 is more than 25 percent.

Anecdotally these declines can be explained by the severe weather conditions experienced in 2013 and this year. But this explanation sheds no light on why inventory levels have decreased so dramatically from last year, when weather conditions were equally as inhospitable as they were during the first four months of this year. It may be too early to tell, but demographics may be playing a role in these statistics. As the population ages and becomes more settled there may be fewer potential sellers. It will be interesting to see how this data unfolds during the remainder of the year.

Sold recreational properties have also declined since 2012. Weather conditions have clearly had an impact on the number of properties sold. In the Haliburton area sales have declined from 35 to 28 in 2012 and 2013 to 25 in the first four months of this year. On Lake of Bays from 20 to 15 to 10. The only recreational trading district to reverse this trend is the Muskoka Lakes. In 2012 there were 25 reported sales. Last year reported sales dropped to 18, but this year, notwithstanding the weather conditions, sales have increased to 23, an increase of 27 percent. It is not surprising that with fewer properties available for sale, and inhospitable weather conditions, that sales have declined.

Because of the divergent nature of cottage properties, prices are affected by such features as location (a particular lake), exposure, elevation, water depths and boat traffic. As a result determining average sale price trends becomes more challenging than in an urban environment where numerous sales of comparable properties allow for a fairly accurate reflection of current market values. Moreover sales take place at a much more rapid pace. For example in the Toronto housing market, in April average days on a market for all properties sold were only 20 days. A review of sales that took place in March as reported by the Association indicated that median prices have declined by approximately 8 percent compared to March 2013. As I have indicated in previous reports, a market analysis of the first four months of recreation property sales is not productive since the market is normally dormant during this period. However what this early data indicates is that caution should be exercised in pricing. Sellers must be mindful that the recreational market is not the robust Toronto resale market, where multiple bids on properties are common. Recreational properties will sell, and they will do so quickly, if priced realistically.

Toronto Real Estate Market Update – April 2014

The Toronto residential resale market continued a string of strong monthly performances in April, a trend that defines the spring market: low inventories, strong sales and rising average sale prices. Mortgage interest rates remain king. Historically low with no likelihood of an increase for the remainder of this year. As this market update was being prepared Laurentian Bank was offering a three year rate of just under 2 per cent, the lowest mortgage rate ever offered in Canadian history.

In April 9,706 residential resale properties were purchased, many by buyers eager to take advantage of the exceptional low rates. This compares with 9,535 sold last year, an increase of 1.8 per cent. The number of properties sold would have been much higher had there been more properties available for buyers to purchase. Most of the sales were in Toronto’s 905 region. In fact 60 per cent of all sales were in the 905 region, with only 3,544 in the actual City of Toronto. There are two obvious reasons for this trend. Property values are less in the 905 region, and buyers only pay one land transfer tax. With the average sale price steadily rising, the additional land transfer tax charged by the City of Toronto adds many thousands of dollars to the purchase of a home. A misguided tax that should be reconsidered.

In April the average sale price for all residential properties sold in the greater Toronto area came in at $577,898, the highest average monthly sale price ever recorded. In the City of Toronto the average sale price was more than 10 per cent higher at $641,666.00. Average sale prices for detached and semi-detached properties in Toronto also reached record levels. The average sale price for detached homes increased by 13.2 percent in April (as compared to last year) and the average price of semi-detached homes sky rocketed by 18 percent. Detached homes in Toronto now sell for $965,670 and semi-detached homes sell for $702,332. The most expensive neighborhoods for buying a home are in Toronto’s central district. The average price of a detached home in Toronto’s central districts comes in at an eye-popping $1,506,782. Semi-detached properties were not far behind at $942,267.

April’s average sale prices not only produced record numbers but they did so in record breaking speed. All properties in Toronto and the 905 region sold in only 20 days on average. Last year it took 23 days for all properties to sell. Within various neighborhoods the speed of sales was even faster. For example, in Toronto’s eastern region all detached homes sold in a remarkable 10 days. Not only were sales fast, but all on average sold for 104 per cent of their asking price. Although not as quickly, but still remarkable, all detached homes in the central district sold in 17 days, and for 100 per cent of their list price. It must be reiterated that the average sale price of these homes was $1,506,782.

Condominium apartments remain the most accessible housing type for Toronto buyers. In the City of Toronto alone 1,505 condominium apartments were sold in April, 3.2 percent more than last April. Prices, however, did not reflect what is occurring with detached and semi-detached housing sales. The average price of condominium apartments rose moderately by 1.8 percent to $384,758, still an affordable housing alternative, and probably the only choice available to first time buyers. More than 63 percent of all condominium apartment sales took place in Toronto’s central neighborhoods, predominately downtown.

April saw a considerable spike in high end property sales, properties having a sale price in excess of $1 Million. These amounted to more than 8 percent of the total sales for the month of April. 828 sales were reported in this category. Last year there were only 606, a 36 percent increase. More surprisingly were the number of properties sold achieving a sale price of more than $2 Million. 135 of these properties traded hands in April. Last April only 98 properties in this price range found new buyers, a year-over-year increase of almost 38 percent.

One of the factors driving this robust market is inventory levels. The greater Toronto area reported only 2.5 months of inventory. Some trading areas were in even greater need of new listings. Toronto’s eastern, and still less expensive districts, reported only 1.7 months of inventory. The number of new listings coming to market is not encouraging.

In April 17,351 new properties came to market, 4.5 percent less than in April 2013 (18,160). As we enter May, there are only 19,118 properties available for buyers to consider as compared to 20,866 last year at this time, 8.4 percent less choice. This is a difficult market for buyers. Limited choice, and competition for what is available. There is nothing that points to a change to this environment anytime soon.

Toronto Real Estate Market Update – March 2014

There were few surprises in the residential resale data that emerged for March sales in the greater Toronto area. The trend continues. Low inventories of available property’s are driving sales and average sale prices, fueled by historically low mortgage interest rates. Rates might even get lower before they start to rise. At the end of March the Bank of Montreal made available a five year mortgage with an interest rate of only at 2.99 percent. Since mortgage interest returns are the banks’ primary source of revenue, increasing competition amongst banks, and no doubt lower rates over the short term, can be anticipated. This is no doubt good news for Sellers who find themselves with multiple bidders for their properties, all hoping to purchase a property before mortgage interest rates begin to rise.

In March 8,081 residential properties traded hands, an increase of more than 7 percent compared to 7,537 sales reported in March 2013. The bulk of these sales took place in the 905 region. Of the 8,081 reported sales, 5,103 took place in Halton, Peel, York, Durham, Dufferin and Simcoe County, This is not surprising considering that consumers have more choice in the 905 region, and prices remain lower than comparable properties, if you can find them, in the City of Toronto. Although the gap is declining, the average price for a detached house is $254,000 less in the 905 region –and the buyer pays only one land transfer tax- than in the city of Toronto. Semi-detached homes are $222,000 less expensive.

As has been reiterated in many of the last Market Reports, inventories remain a problem. At the end of March there were only 16,543 available properties in the greater Toronto area for buyers to choose, 10 percent fewer than the 18,384 available at the end of March 2013. A positive turn in March was the number of new listings that came to market. This March 14, 829 new properties were listed by realtors in the greater Toronto area. Although only 1.4 percent higher than the 14,618 that came to market in 2013, it represents the first year over year increase that the market has witnessed in a number of months. One month does not create a trend, but it may be that sellers sitting on the metaphorical real estate fence are coming to market in order to capitalize on the surging average resale prices.

In March the average resale price came in at $557,684, a record for Toronto, surpassing the previous record for a single month achieved only last month. February’s average sale price came in at $552,885. March’s average sale price was almost 8 percent higher than the average sale price achieved in March 2013. Increases were consistent across all housing types. Detached homes in Toronto increased by 6.8 percent, semi- detached by 8.7 percent, townhouses by 7.7 percent , and condominium apartments by 5.1 percent.

Central Toronto remains the most expensive place to live in the greater Toronto area. The average price of a detached home in March exceeded $1,400,000. Semi –detached homes are equally expensive, averaging more than $800,000 for a typical semi. The least expensive area to live in Toronto is now the west end. The average price of properties came in at $587,980, $21,000 less than east end properties. East end properties however remain the hottest real estate commodity in Toronto. All east end properties sold in only 10 days, with most of these sales taking place in Riverdale, Leslieville, and the Beaches. Not only did these properties sell quickly, but on average they sold for 109 percent of their asking price. This is an unprecedented pace for sales. The overall market, including the 905 region saw all properties sold in a startling 21 days, 3 days faster than sales took place in 2013.

Condominium apartment sales continue to lag as compared to free-hold sales, although the pace of sales in that market sector is also accelerating. In February condominium apartment sales took 34 days to sell. This pace was consistent with the pace of sales over the last year. In March all condominium apartment sales were achieved in a mere 29 days, the first time that the 30 day barrier has been broken. Given the fact that inventories in this sector are not increasing dramatically, it can be anticipated that over the short term condominiums apartment sales will continue to accelerate. In March 2,941 new condominium apartment listings came to market. Last March 2,850 new listing became available. Heading into April 4325 listings will be available for sale, only 5 more than in April 2013. It is interesting to note that condominium apartment sales now represents 45 percent of all sales that take place in the city of Toronto.

Looking forward April should, subject to available inventories, total close to 10,000 property sales. Last April the Toronto Real Estate Bard reported 9,535 sales. There are many buyers attempting to take advantage of five year interest rates that are less than 3 percent, and lenders are eagerly attempting to loan them money. However, with average sales prices beginning to move towards $600,000, an increase in mortgage interest rates maybe the trigger that will slow sales. Since there is no indication of a rate increase, there is no apparent end to the Seller’s market place we have been experiencing since the spring of 2013.