Archives

Tagged ‘house‘

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.

Toronto Real Estate Market Update – March 2017

March residential resale numbers were staggering, in every category. More than 12,077 homes changed hands in March, up almost 18 percent compared to the 10,260 that were reported sold last year. In comparing 2017 against 2016 it must be remembered that 2016 smashed all records for residential resales.
The most daunting statistic emerging for March’s data is the average sale price for all properties sold. The cost of the average home in Toronto in March came in at $916,567, an eye-popping 33.2 percent higher than what the same home would have cost a buyer in March 2016. In absolute numbers a buyer looking to buy the same home he considered buying last year would now have to pay an almost impossible $228,000 more for the same property. Not only would that fictitious buyer have to pay substantially more, he would have to act quickly because all of the 12,077 properties that were reported sold in March were on the market for only 10 days (on average). Staggering is the only word for these year-over-year numbers.
Prices were even higher for detached and semi-detached properties. A detached home in the City of Toronto will now cost a buyer $1,561,780. A semi-detached home is not far behind, coming in at $1,089,605. In Toronto’s central districts the numbers are substantially higher. The average sale price for a detached property was $2,450,955, while a semi-detached property in Toronto’s central districts came in at $1,410,702. The 105 properties that sold in this category of homes in March sold in only 7 unbelievable days. Even condominium apartments in the central core of Toronto are beginning to reach lofty heights. The average sale price for condominium apartment sales in March was $615,880. Only a year ago their average sale price was only $484,000. And like their free-hold counterparts condominium apartments in March sold in only 11 days and at 108 percent of their asking price.
The greater Toronto area’s definition of what constitutes a luxury property may, at this pace, have to be augmented. In March, 632 properties were reported sold having a sale price of $2 Million or more. Once again the comparison to 2016 of properties sold in this category is staggering. Last year there were only 228 properties in this category, and in 2015 a mere 132.
The debate that is now consuming politicians, economists and real estate experts is all about the causes of this supercharged Toronto housing market. The real estate industry is strongly of the view that the problem can be distilled to one word – supply! March’s inventory numbers support this position. At the end of March there were 7,865 properties available to consumers to buy. That’s more than 35 percent fewer properties than were available to buyers in 2016. Although 17,051 new listings came to market in March, an increase of 15 percent compared to last year, the greater Toronto’s inventory levels remain perilously low.
Economists see Toronto’s real estate problems as being created and driven by demand. The frenzied demand, as it has been characterized, is being driven by, and in no particular order, foreign investors, primarily Asian, speculators, and local demand by those buyers who believe that if they don’t get into the market today they may never be able to do so. One shouldn’t forget mortgage interest rates. At only 2.65 percent (or lower) for a five year term, rates are at all time historical lows.
It is becoming clear that there will be political intervention, and it will be soon. At the time of preparation of this Report Ontario Premier Kathleen Wynne announced that the province intends to introduce a package of measures to address home affordability in Toronto. The following legislative tools are within the Province’s arsenal. It can impose a speculation tax on buyers who buy and flip properties within short periods of time, perhaps 2 to 4 years. This tax could apply to all properties or just non-principal residences. A tax on foreign buyers similar to that introduced in British Columbia in 2016, and/or develop a progressive property tax for foreign buyers requiring owners who own homes in Ontario but do not live or work in Canada to pay annual property tax surcharges. The Province could also prohibit non-residents of Canada from buying resale homes.
It is a certainty that the provincial government will expand rental controls. Currently rental properties built after 1991 are exempt from the rent controls embodied in the Residential Tenancies Act. But will provincial (or federal or municipal) intervention cool the Toronto housing market? Any regulatory intervention will, in the short term, cause the market to slow. Any legislation related to foreign buyers will deter some foreign buyers, perhaps deflecting them to other Canadian jurisdictions. Domestic buyers may also take a “wait and see” approach to the market. Ultimately, any measures taken by the provincial government will be temporary in nature and there is little likelihood that prices for homes in Toronto will decline.
The Toronto market place is being shaped by global factors as much as local factors such as supply and low mortgage interest rates. The world as we know it is shifting from being predominately rural to urban. Cities will continue to grow, and some more than others. The world is riddled with corruption and instability and uncertainty is at its highest level since 2007. In this environment of global uncertainty investors are less likely to invest speculatively. They will look to jurisdictions and locations where their investments will be safe and certain, even if their returns are minimal or even flat. Cross border capital is flowing into established, certain, and safe economies. The greater Toronto area satisfies all of the above-noted investor requirements. Combined with annual immigration of 100,000 people, Toronto and the politicians, economists and realtors who are constantly attempting to understand the current market, should anticipate that the residential resale market will continue to be driven by these geopolitical factors, notwithstanding government intervention.
The market continues to be plagued by unprecedented low inventory levels. These levels have driven average sale prices to record highs. The record level of price increases are likely to generate government intervention, similar to what occurred in British Columbia in 2016.

Toronto Real Estate Market Update – February 2017

The question that economists, journalist, politicians and realtors are all asking is: What’s happening to the Toronto real estate market? What they are discovering is that there are no easy answers to this question. What’s prompting the question is the most recent residential resale data for the month of February.

In February, there were 8,014 reported property sales, a 5.7 percent increase compared to the 7,583 sales that took place last February. The positive variance is not large, but considering that 2016 was a record breaking year, substantially so, a positive variance speaks to the strength of the market in 2017.
Sales in and of themselves are not one of the major concerns related to the market. It’s the available inventory that’s the problem. At the beginning of March there were only 5,400 active listings. This compares very unfavourably to the 10,902 properties available for sale last year at this time.
Even at 10,902 that was an insufficient number of properties for sale in the robust market of early 2016. The decline in inventory year-over-year is more than 50 percent. And it is not going to get better. In February, only 9,834 new properties came to market, a decline of 12.5 percent compared to the 11,234 properties that became available for sale during February of last year.
What these numbers mean is that for the greater Toronto area there is only 1 month of inventory, and for the City of Toronto, 1.2 months of inventory. These are unprecedented low inventory levels. By comparison only a year ago, there were 1.7 and 2.1 months of inventory, respectively available to buyers. To put these numbers into perspective, a balanced market is one in which there are between 3 to 4 months of inventory.
It comes as no surprise therefore that all listed properties are selling at the speed of light and for prices never seen before in the greater Toronto area and the City of Toronto. All properties listed for sale in February (on average) sold in just 13 days. Last year, which I repeat was a record breaking year, it took 21 days for all properties in the greater Toronto area to sell, more than 38 percent faster than last year.
But what has captured everyone’s attention is the sale prices that are being obtained in the greater Toronto area and the City of Toronto. Overall, for the entire region, including the 416 and 905 geographical areas, the average sale price for all properties sold in February was $875,983. That number represents a stunning increase of almost 28 percent in only one year. Last February the average sale price was only $685,735. If you were a buyer who decided to postpone purchasing a house in 2016 and now are in the market, the house you could have bought last year will now cost you $190,000 more.
Prices are substantially higher in the City of Toronto. A detached property now costs $1,573,622, a 30 percent increase compared to last year. A typical semi-detached property for the rst time now costs more than $1 Million ($1,085,484). In Toronto’s central districts the average sale price for a detached property is now an eye-popping $2,503,188. Unbelievably, last February the average sale price for detached properties in the central districts was only $1,869,749, an increase of $634,000 or 34 percent. In February there were 389 properties that were reported sold with a sale price of $2 Million or more. Last year there were only 187 sales in this price category and a mere 103 in 2015.
The one plentiful source of housing, namely condominium apartments, has all but disappeared. At the end of February there were only 1,301 active listings in the City of Toronto. In February 1,632 condominium apartment were reported sold. That’s 25 percent more sales than available listings. At that pace, you don’t have to be a mathematician to see the market wall that we are heading towards. By comparison only a year ago, there were 3,432 active condominium listings, a year-over-year decline of an incredible 62 percent.
So what is happening to the Toronto residential resale market? There is no easy answer to this question. It is a combination of factors that have come together to create the perfect real estate storm – imperfect if you are a buyer.
In no particular order, the following factors have come together to create the market place we are experiencing. Interest rates remain historically low, as they have for many years. Currently a buyer can secure a five-year fixed mortgage with an interest rate of only 2.69 percent. The long period of low interest rates has generated an insatiable appetite for debt. At the current low rates, and they have been lower, if you are a buyer why not take on all the debt you can. It’s cheap money, particularly when inflation is running at about 2 percent.
Because of Toronto’s strong economic environment, to a large extent driven by the real estate industry, particularly new construction, approximately 100,000 immigrants have been making their way to the greater Toronto area annually. That means 30,000 new households, perhaps more, require new shelter annually. That number begins to compound over time.
Historically low interest rates and an increasing population have driven demand to unprecedented levels. This level of frenzied demand has in turn and over time diminished the available inventory. As indicated above, at the beginning of March there were only 5,400 active listings available to buyers in the entire greater Toronto area, which is very large geographical swath. By way of random comparison, in March 2002 when Toronto’s population was substantially less than it is today, there were 15,524 active listings. That was fifteen years ago. Ten years ago, there were even more available listings as a result for the economic upheavals the banking industry was experiencing.
Foreign buyers have also entered greater Toronto’s market place, although their impact is less a factor than some journalists and economists believe it is. A recent study by the Toronto Real Estate Board indicates the foreign buyers are involved in less than 6 percent of all resale transactions. Moreover, and unlike Vancouver, foreign buyers in the greater Toronto area are not simply parking their money in Toronto real estate, leaving properties empty for extended periods of time. In one form or another foreign buyers tend to be end-users.
There is no easy solution to the problem plaguing the Toronto market place. Greater supply would help, but the lead time to delivering new properties to the market is at least 2 to 3 years. In order to facilitate this solution governments at the municipal and provincial level will have to deregulate the existing legislation, and free up land for development. What we don’t need is government intervention in the form of higher taxes or taxes targeted at specific buyers. That might slow the market, but it won’t bring prices down and the broader impact on the economy would be disastrous.

Toronto Real Estate Market Update – January 2017

The Toronto and area residential resale market picked up where 2016 ended. In fact it accelerated the pace of sales we witnessed in December. This is unusual behavior for the market in January, usually a slow month, as buyers and sellers kick out the holiday season cobwebs. But these are unusual times, very unusual times.

 

The shortage of available supply is causing buyers to hunt for properties for sale, even at the very beginning of the year. In January there were 5,188 reported sales, almost 12 percent higher than the 4,640 reported sales in January of 2016. January’s sales figures would have been higher if there were more active listings available to buyers. This is clearly demonstrated by the fact that in the City of Toronto there was a decline in the number of detached and semi-detached properties sold, while at the same time average sale prices increased by almost 27 percent for detached properties and more than 26 percent for semi-detached properties.
The other interesting piece of data that emerges from January’s results is the speed at which properties were listing for sale and then reported sold. In January all properties listed for sale (on average) sold in just 19 days. The number, when compared to January 2016, is startling. Last year it took 29 days for all properties to be reported sold, a speed-up in sales of almost 35 percent. It must not be forgotten that 2016 was a record breaking year in all categories, including days on market.
It is no surprise that with a listing shortage, fast sales, and a certain buying fervor that the average sale price for all homes sold in the greater Toronto area increased sharply in January. The average price for a home in the greater Toronto area was $770,745. That is not a record, but it was close. The record is $777,031 achieved in November of last year. Last January the average sale price was only $630,193, a dramatic increase of more than 22 percent. That increase included condominium apartment sales. Excluding condominium apartments the average price of a detached home is $1,336,640, and $902,688 for a semi-detached property, eye-popping increases of 26.8 and 26.4 percent from last year.
In Toronto’s central core the numbers are even higher. A detached house in the central core will now cost a buyer $2,324,593, with semi-detached properties now trading for $1,169,123, if you can find one. Only 33 semi-detached properties sold, again speaking to the shortage of supply, and they sold in only 13 days. Other trading areas in Toronto produced similar or even more shocking results. For example, all detached properties in Toronto’s Beach neighbourhood (there were only 6 of them) were placed on the market and reported sold in only 2 days! And at 114 percent of their asking price. These are unprecedented market performances.
The decline in the number of available condominium apartments for sale is also becoming troubling, especially since the bulk of all reported sales in Toronto in January were condominium apartments. In January the combined total of detached and semi-detached properties sold was a mere 584. By contrast there were 1,125 condominium apartment sales, an increase of almost 27 percent compared to last year. At the end of January there were only 1,387 active condominium apartment listings. Last year there were 3,231 condominium apartment listings, a shocking decline of 57 percent. We have reached the stage where there is just over one month of inventory of condominium apartments, and we are only in February. It appears that the last source of abundant housing, like detached and semi-detached properties, has dried up. It is not surprising that the average sale price of a condominium apartment jumped by more than 13 percent in January.
Inventory levels will dictate how the market unfolds for the remainder of 2017. At the beginning of February there were only 1.1 months of inventory in the greater Toronto area, and 1.3 months of inventory in the City of Toronto. The 1.3 months of inventory translates to only 2,230 properties available for sale. The market is far removed from a balanced market. We would need three times the current number of listings on the market to begin approaching a balanced market.
The market is clearly heading towards a state of paralysis. Sellers are holding o putting their properties on the market unless forced to, because there are few alternatives for them in the market place. The supply shortage continues to drive up prices – the average sale price in January was $770,000 – eventually taking them to unsustainable levels. Unless there is a change in the supply side, we could see the 2016 Vancouver pattern develop in the greater Toronto area.
Even without government intervention prices reached such exhibitant levels in Vancouver that by the middle of the 2016 sales began to decline. The decline was accelerated, of course, by the 15 percent foreign investor tax that was implemented in the fall. By year-end the average sale price of houses sold in the greater Vancouver area dropped by 6.6 percent compared to a year ago and sales tumbled by almost 40 percent. The average price for detached properties sold in the region tumbled to $1.5 Million last month, a 17.8 percent decline from the record high of $1.83 Million in January of 2016. The average price for a detached house in Toronto in January was $1,336,640, and $1,068,670 in the greater Toronto area.

Toronto Real Estate Market Update – December 2016

Another record-breaking year for the Toronto and area residential resale market. In 2016 113,133 properties were reported sold. This number shattered the previous record of 101,213 properties sold in 2015. That makes two consecutive years in which Toronto and area sales have exceeded 100,000. Prior to 2015 reported sales had not even come close to that number. The previous record was 93,193 properties sold. That was in 2007.

 

Although the most recent sales results seem remarkable, given Toronto’s population growth throughout the early years of this millennium, they should have been anticipated. The Toronto and area population has been growing by about 100,000 new immigrants annually. Households have been increasing by approximately 30,000 annually. Since 2007, when the then record of 93,193 sales was achieved, at least 300,000 new households have been created in the greater Toronto area. These households need shelter, a place to live, either as homeowners or as tenants. The supply of new housing in the greater Toronto area has not come close to meeting household needs. Consequently, almost everything that has become available for sale has sold, and as the supply dwindles, for higher and higher prices.
Even in December, which until the last few years has historically been a slow sales month, the resale data related to the market is startling. For example: in December, 526 detached properties were reported sold in Toronto, a decline of 7.6 percent compared to December 2015. The decline in semi-detached property sales is even more shocking. A decline of 11.5 percent, with only 138 properties reported sold. However where the surprise and related concern arise, is in the inventory levels available to buyers in these two categories of housing types moving to January 2017. In the case of detached properties only 488 active listings are available to buyers. In the case of semi-detached properties only 77. In both instances the number of properties available to buyers is less than the number of sales that occurred in December. Translated into months of inventory that would equate to 0.9 and 0.6 of inventory respectively.
The only housing type that showed a positive variance at year end was condominium apartments. Condominium apartment sales were up by 19.5 percent in December on a year-over-year basis. But even in this category, there are troubling signs of inventory shortages ahead. In December, in Toronto, 1,238 condominium apartments were reported sold. However, moving into January there are only 1,277 active listings for condominium apartments, or roughly one month of inventory.
Under these circumstances it is not surprising that average sale prices sky-rocketed in 2016. December’s average sale price came in at $730,472 or 20 percent higher than the year-over-year average sale price of 608,714. Can you imagine the shock that one would experience if they had lived abroad since 2014 and had returned to Toronto and were looking for a house or condominium apartment to buy. That same fictitious house they could have bought in 2014 for $566,000 now costs $730,000, an increase of 29 percent, and these numbers include condominium apartments.
In December the average price of a detached house was$1,286,605. The average price for a semi-detached house, if a buyer could find one for sale, was $808,920. In Toronto’s central districts the numbers are even more dramatic. The average price for a detached house came in at $2,058,876, while the average price for a semi-detached house broke the $1 million mark at $1,058,544, and this was in December.
Overall 5,338 properties were reported sold in December. This number would have been much higher had inventory levels been higher, a 8.6 percent increase compared to the 4,917 properties sold in December 2015. Across the greater Toronto area there are only 1.1 months of inventory, and in some of Toronto’s trading districts there are less than 1 month of inventory. For example two of Toronto’s eastern districts comprising Riverdale, Leslieville and the Beaches have only 0.7 months of inventory heading in 2017. Overall, across the greater Toronto area, we enter 2017 with 48.1 percent fewer active listings than we had last year. The actual numbers are eye- popping. We enter 2017 with a paltry 4,746 active listings of all property types. To put this number in context it must be remembered that there were 5,338 sales in December, 12 percent more sales than the total available inventory.
Based on the resale data available at the end of 2016, the beginning, and perhaps all of 2017, might be a different market than we witnessed in 2015 and 2016. We may witness negative variance sales numbers as compared to past years. This would be the first time this has occurred since 2008, when the equity markets imploded. The reason for this negative variance can be summed up in one word: supply.
With the supply side of housing being so low, it is inconceivable that sales can outpace 2016, notwithstanding the demand. Unless a plethora of new listings come to market in the early part of this year, and there is no current reason to believe that this will happen, year-over-year sales will decline, even though prices will continue to increase. This may result, in time, in the market stabilizing to some extent. Prices may reach levels that make affordability a problem which in turn may cause properties to remain on the market longer, thereby increasing the supply. Over the longer term that might result in price stabilization.
But where are those 100,000 new immigrants locating to the greater Toronto area annually going to live?

Toronto Real Estate Market Update – November 2016

The year is coming to an end, but there is no slowing down the Toronto resale market. The record for most sales in the greater Toronto area in any year has already been shattered, and there is still the month of December. The 8,547 sales reported in November took the total year-to-date sales to 107,840, breaking the previous annual record of 101,212 achieved only last year. In all likelihood there should be about 5000 (or slightly more) sales in December. That will bring the year-end total to approximately 113,000 reported residential resales, a truly remarkable feat. Ten years ago, there were only 83,084 reported sales in the greater Toronto area.

 

This record speaks to the two prominent characteristics of the greater Toronto area market. Firstly, the deep seated desire for home ownership, and secondly, the rapidly growing population of the area. With approximately 100,000 people immigrating to the Toronto area annually it is very unlikely that much will change in 2017, subject of course to any dramatic increase in mortgage interest rates.
Total annual sales was not the only new record set in November. The average sale price for all sales in the greater Toronto area came in at $776,684. The previous monthly record was set in October at $762,525. It should be noted that monthly average sale price records being set so late in the year is an anomaly. Historically the market reaches its monthly peak in May or June, and thereafter average monthly sale prices begin to decline. For example in May of last year the average sale price came in at $649,648. That was a record. No month following last May came close to eclipsing that record. A new record wasn’t set until February of this year with an average sale price of $685,738. February’s record has been shattered six times since then, the most recent record being achieved in November. Early data indicates that the Toronto and area marketplace might even establish a new record in December, until recently an unthinkable occurrence.
A third record establish in November was the average days on market that it took properties to sell in the greater Toronto area. It took only 17 days for all properties (on average) to sell. By comparison it took 26 days last year, an accelerated pace of almost 35 percent. In the City of Toronto it took only 15 days for detached homes to sell, and only 11 days for semi-detached properties to be snapped up by buyers.
The average sale price for detached properties in the City of Toronto is now $1,345,962, and for a semi-detached house you must be prepared to pay $906,353. It must be unthinkable to be a buyer who for whatever reason was going to buy a year ago and then did not proceed. That mythical buyer could have bought that same detached house for just over $1,000,000, and that same semi-detached house for approximately $840,000 last year. The percentage change year-over-year is 32 and 20 percent respectively.
As has been set out in previous market reports, the only affordable housing options for buyers are condominium apartments, but even this housing form is becoming pricey. In November the average sale price for condominium apartments in the central core of the city, where most condominiums are located, came at $526,116. This represents a 13 per cent increase compared to the average price last year. The volume of condominium apartment sales has also increased dramatically. Sales were up by almost 28 percent compared to last year. What is becoming worrisome is the rapidly declining volume of available listings of condominiums apartments. At month end in the City of Toronto there were only 2,002 condominium apartments for sale. When one considers that there were 1,718 condominium apartment sales in the same month, you don’t need to know any form of high mathematics to concluded that we will be out of stock of condominium apartments for sale if this pace of sales continues and it no doubt will, considering that condominium apartments are still (comparatively) affordable. It should be noted that at the other end of the condominium apartment spectrum, 14 condominium apartments sold in November having a sale price that exceeded $2 Million.
The supply shortage is not restricted to condominium apartments, but is impacting the overall marketplace. In November the total number of active listings available to buyers was almost 36 percent less than last year at this time. In actual numbers this amounts to only 8,639 properties, or only 1.2 months of inventory. This will be a hot point affecting the residential resale market in the early months of 2017.

Toronto Real Estate Market Update – March 2016

We are running out of superlatives in describing the Toronto and area residential resale market place. Literally it is going to places where no market has gone before. Average sale prices, days on market, inventory and demand have reached levels that are unique and perhaps a little unnerving.

Screen Shot 2016-04-12 at 12.34.54 PM

 

In March the average sale price for all properties sold in the greater Toronto area came in at $688,181, marching ahead of the previous monthly record of $685,809, achieved only in February. Last March the average sale price was $613,815. This means that year over year house prices in Toronto have increased by more than 12 percent.

 

In the city of Toronto (416 districts) prices of detached and semi-detached properties have risen even more dramatically. The average price for a detached home in Toronto now sits at $1,174,358. In central Toronto the average sale price for a detached home came in at an eye-popping $1,863,704. What is even more startling is that all sales of detached homes in central Toronto took place in only 14 days (on average) and at 104 percent of their asking price. The numbers were lower in Toronto’s west ($938,678) and east ($808,988) trading areas, but these properties also sold at lighting speed, and for substantially more than their asking price.

 

C3462060_1

7 Salisbury Ave, Toronto | $1,100,000

 

The story was the same for semi-detached homes. The average price for a semi-detached home in Toronto is now $817,611. In Toronto’s central districts for the first time you now have to pay over $1 Million for a semi-detached house – if you can find one to buy. All semi-detached properties in Toronto’s central district sold in an unbelievable 11 days and at 107 percent of their asking price. Some trading areas in Toronto’s central market reported no sales in March. The reason was simply no semi-detached properties were available for sale at the end of March. A stunningly low level of inventory. It is not surprising therefore that the Toronto and area high end market has also reached astronomical levels. In March 228 properties were reported sold having a sale price of $2 Million or more. This compares to only 132 properties sold in the same category last year, an increase of more than 72 percent. The 228 sales in this category were primarily detached homes, with 3 condominium apartments also sold in this price point.

 

1Exterior

124 Park Rd, Toronto | $17,700,000

 

Overall the market produced 10,326 sales, an increase of 16.2 percent compared to the 8,887 sales achieved in March 2015. Clearly sales were not a problem. What was, and is a problem, is the small number of listed properties available for buyers to purchase.

 

In March only 14,864 new properties came to market. This was almost 4 percent less than the 15,435 that came to market in 2015. By the end of March the level of available inventory was woefully low. In the entire greater Toronto area there were only 12,132 properties available for sale, more than 20 percent less than last year at this time. This represents only 1.7 months of inventory. In various trading areas and depending on housing type, inventory levels are even lower. For example, inventory levels for the combined eastern trading districts are only 1.3 months, with one district having less than 1 month of inventory, also a market first. With these historically low inventory levels it is not surprising that properties are “flying off the shelves”. In March the average days on market for all properties sold was only 16 days. In 2015, which was a record year for the Toronto market place for volume of properties sold, days on market was 20 days.
The only area of the market operating differently is the condominium apartment sector, but even activity in this market sector has also sharply increased. The average price for condominium apartments came in at $416,251. In Toronto’s central districts, which have the highest concentration of condominium apartments, the price came in at $484,000. In March the average price for condominium apartments rose by 4.3 percent. Volume, on the other hand, rose by more than 20 percent. Average days on market dropped to 25, well below where it was only a few months ago, however average sale prices rarely exceed the asking price, but like detached and semi-detached sales we are beginning to see it happen.

 

C3431430_1

170 Avenue Rd, 703, Toronto | $418,800

 

One wonders if this market can continue at this pace. The same concern was expressed about the Vancouver resale market, but it has surpassed the wildest expectations of real estate pundits. These same pundits are now clamouring for constraint, even suggesting legislatives intervention to slow that market. In Toronto we have not reached those levels, but what was only recently thought to be implausible is happening. Stay tuned for April’s market report.

Toronto Real Estate Market Update – February 2016

January’s exceptional start paled in comparison to February’s results. February set a new high water mark for sale prices in Toronto. This speaks to the power of the Toronto resale market. In the past when records for average sale prices have been set its usually in the months of April and May, the months that are most active. This year it occurred in February.

Screen Shot 2016-03-14 at 2.29.11 PM
In February the Toronto and area resale market reported an average sale price of $685,278, the highest ever recorded. The previous record was achieved in May of last year, with an average sale price of $649,648. The average sale price in the City of Toronto (the 416 districts) came in at $719,843. This average sale price is particularly startling in that it includes condominium apartment sales, which form the bulk of the sales in the City of Toronto. The average sale price achieved in February exceeded last February’s average sale price of $596,320 by almost 15 percent.

It is not surprising that the number of sales achieved in February was also a record. There were 7,621 sales reported, the highest number of sales ever produced by Toronto area realtors in any February. Last year there were only 6,294, an increase of more than 21 percent. This is an unprecedented increase for the month of February. The increase in sales was across all housing types.

In the City of Toronto detached property sales increased by almost 12 percent. Semi-detached property sales increased by almost 22 percent. But the biggest increase in sales was in condominium apartments. In February condominium apartment sales increased by more than 25 percent compared to February 2015. Given the steep increase in prices in Toronto, condominium apartments are the last resort for many buyers, especially first time buyers.

Prices for detached and semi-detached properties have increased dramatically in the last few months, once again breaking records in February. The price of the average detached house in Toronto is now $1,211,459. The price for semi-detached properties is not far behind at $848,835. Condominium apartments look very attractive at only $435,579. In Toronto’s central districts, where many of the city’s condominium apartments are located, the average sale price is $488,518.

In February all sales took place in only 21 days (on average), and much faster in some of Toronto’s trading districts and for detached and semi-detached properties. If you were fast enough to find one and offer on it, in most cases buyers found themselves in competition. Last year, which was a record breaking year for sales, it took 23 days for all properties to be marketed and sold.

Of special note are Toronto’s luxury sales. These are properties that had a sale price of $2 Million or more. In February 187 properties in this category were reported sold. This represents an incredible 82 percent increase compared to the 103 $2 Million plus properties sold in February 2015. Most of these sales were detached properties, however there were 5 condominium apartments that were sold in this category.

The focus as we head into March is Toronto’s inventory of properties available for sale. At the beginning of March there were only 10,902 active listings in the entire greater Toronto area. This compares with 12,793 in 2015, a decline of almost 15 percent. In the City of Toronto there were only 5,070 available properties, including 3,432 condominium apartments. In the greater Toronto area there are only 1.7 months of inventory. In January there were 1.8 months of inventory.

February’s inventory levels are the lowest that have been seen since the Toronto Real Estate Board began providing months of inventory data. We are a long way from a balanced market. That would require 3 to 4 months of inventory.

Looking forward we should expect more of what we experienced in February. It is unlikely that inventory levels will improve. Coupled with today’s historically low mortgage interest rates, there will be a mad scramble for properties becoming available for sale, which in turn will cause Toronto’s already high average sale prices to break new records.

Collingwood Real Estate Market Update – February 2016

This report summarizes the monthly statistics for the Western Region of the Southern Georgian Bay Association of REALTORS® (SGBAR). While 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 Real Estate Board in 2014, this report is restricted to the Western Region, formerly known as the Georgian Triangle Association of REALTORS®.

 

Screen Shot 2016-03-08 at 9.45.07 AM

 

This report summarizes the monthly statistics for the Western Region of the Southern Georgian Bay Association of REALTORS® (SGBAR). While 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 Real Estate Board in 2014, this report is restricted to the Western Region, formerly known as the Georgian Triangle Association of REALTORS®.

 

As reported in previous months, listing inventory continues to decline. Examining listings for the month of February 2016, there were 275 new listings vs 317 in February 2015, which represents a decline of 13%. Year to date comparisons show February 2016 with 523 listings vs 616 listings for February 2015, marking a decrease of 15%. February 2014 had 377 listings come on the market with 812 listings YTD.

 

1604067_3

469501 31 GREY RD, GREY HIGHLANDS | $899,000

 

 

This trend has created a very strong seller’s market in certain neighborhoods such as downtown Collingwood and family neighborhoods in the Collingwood area resulting in multiple offers in certain price categories and in specific locations. Buyers must be ready to jump on properties as they hit the market. Having pre-approved financing and a good understanding of property values will be beneficial in successfully purchasing a property in current market conditions.

 

182 sales were reported in February 2016 which is a remarkable 44% increase over the 126 sales reported in February 2015. Even with the continued shortage of listings, sales are up for the third consecutive February, with February 2014 recording 113 sales. The YTD sales follow the same trend showing an increase of sales over the past three years. There has been a 26% increase in the sales YTD with 229 sales in 2015 vs 288 sales reported in February 2016.

 

1400587_1

152 JOZO WEIDER BLVD, THE BLUE MOUNTAINS | $380,000

 

 

When comparing February 2016 to February 2015, there is an increase in the number of sales in all price ranges between $150,000 and $700,000. Sales in the $300,000 to $349,999 price category have shown the most activity with a dramatic jump from 11 sales in February 2015 to 34 sales in February 2015.

 

There have been 4 sales in the $900,000 to 999,999 price range vs 1 sale in February 2015. Sales in the $1,000,000 to $1,499,999 have increased from 3 in February 2015 to 6 in February 2016. The spike in sales from $900,000 to $999,999 may be in part due to the new Canada Mortgage and Housing Corporation (CMHC) rules for high ratio mortgages which changed February 15, 2016, even though most analysts believe the measure will have a minimal impact on house sales and prices.

 

_1

504615 GREY ROAD 1 , GEORGIAN BLUFFS | $599,000

 

 

The new rule now requires a 10 per cent down payment on the portion of any mortgage it insures over $500,000. Prior to February 15th, 2016 homebuyers were required to put down a minimum of five per cent to qualify for insurance, protection that lenders insist on when providing a mortgage worth more than 80 per cent of the home’s value. The five per cent rule remains the same for the portion up to $500,000. Homes priced at more than $1 Million require a minimum down payment of 20 per cent, and therefore the CMHC guarantee doesn’t apply.

 

Southern Georgian Bay has experienced a vibrant winter in spite of unseasonably warm weather conditions. Thornbury’s growth is noticeable with a new Foodland, LCBO and lively downtown core. The Blue Mountain Village is bustling with skiers, visitors and local residents all enjoying winter activities and terrific ski conditions. The surrounding communities are all thriving. All in all, the Southern Georgian Bay real estate market continues to perform well.

Prince Edward County Real Estate Market Update – February 2016

Property, property, everywhere property, wherever you look in Prince Edward County (“the County”), but hardly a listing for sale! Well perhaps a slight exaggeration, but the scarcity of property for potential buyers has definitely been a consistent story these many months in the County. The County is not unique in this regard, but rather this appears to be a recurring refrain across southern Ontario in many of the markets served by this brokerage. With low interest rates continuing to support healthy demand, inventory has not been able to keep up. February is no exception and this appears to be the determinative force in the market outlook moving into the spring months when the real estate market in the County traditionally picks up and comes alive.

 

Screen Shot 2016-03-07 at 4.35.08 PM

 

According to the latest numbers released in its Enhanced Statistics Statistical Query Report, The Quinte and District Association of REALTORS® (“the Quinte Board”) disclosed that only 85 new properties came onto the market in the County in the month of February, a 14% drop from last year when 98 were reported as being listed. This number is also down significantly even from January when 104 properties were listed (which itself was a 32% decline from the numbers reported for the same month the year previous). These numbers combined to bring year to date figures to 189 which marks more than a 24% decline from last year at this time when a total of 250 new listings had been logged by the Quinte Board. The net effect of all of this is that there is simply less to buy with inventory being calculated at only 368 active listings across the County which is 26% less than was available last year at this time when 496 active listings were recorded when the Enhanced Statistics Statistical Query Report was issued.

 

_1-1

818 COUNTY ROAD 5 RD, PRINCE EDWARD COUNTY, HALLOWELL WARD | $1,249,000

 

Not surprisingly, sales have not kept up with last year either, though the numbers do not trail the decline in inventory to the same degree. Rather the number of properties sold in the County was only two fewer than last year, 22 as compared to 24, an 8% drop. Year to date then, 41 properties have been recorded as sold in the County in 2016 compared to 48 last year at this time, which makes for a 14.5% drop. All in all therefore, sales have not fallen as quickly or at the same rate as inventory. The numbers actually suggest that there is steady demand, but you simply can’t sell what isn’t for sale. With buyers chasing after fewer properties, the market remains tight and the average sale price for properties sold reflects this. The Quinte Board reports that the average sale price for February 2016 came in at $287,488, 22% higher than one year ago when it was calculated to $234,354.

 

_2

NEXT TO 12696 LOYALIST PARKWAY (HIGHWAY 33) , HALLOWELL WARD | $289,000

 

Finally, according to the numbers released by the Quinte Board, it actually took longer to sell the particular sample of properties that did sell in February compared to those that sold in the same month last year, specifically on average 114 days compared to 72 days in February 2015. While this number is not definitive in what it indicates, it could be interpreted as indicating that with as little on the market as there is, even the harder to sell properties that had been languishing on the shelf were selling as there is limited new product to choose from.

 

_1

65 & 71 & 77 BRIDGE ST, PICTON WARD | $2,999,000

 

Generally speaking, the state of the County real estate market remains on strong footings moving into the rest of the year. As indicated, the cost of financing remains affordable as is the price point for the area compared to comparable markets served by this brokerage. After considerable economic volatility, particularly in the equity markets, precipitated in large part by the collateral negative impacts from falling oil prices as well as an ongoing sputtering recovery in other economic sectors and a lackluster domestic job market, conditions appear to have stabilized somewhat with the American economy continuing to gain traction and some of the positive spin offs from a lower Canadian dollar starting to take root. One clear message stands out and that is, taking all of the foregoing into account, property owners contemplating putting their property on the market should not hesitate to do so as demand is strong and property is scarce, and it is reasonable to expect a positive uptake and reception for any property that reflects good value.