Toronto Real Estate Market Update – January 2016

The new year started strong, producing 4,672 residential resales, an increase of more than 8 percent compared to the 4,318 sales the market produced during January 2015. The big story early in the year is not sales, but the lack of inventory.

In January only 8,957 new properties became available for sale in the greater Toronto area. This compares poorly against the 9,547 new listings in January 2015, a decline of over 6 percent. The number of new listings combined with the properties that sold in January means that at the beginning of February there were only 9,966 properties available for buyers to purchase. This is a decline of almost 15 percent compared to the 11,600 properties available last year and an even bigger decline than 11,903 properties available for sale in February 2014.

ROSEDALE: 337 Wellesley St, Toronto | $1,499,000

These numbers are exceptionally low. They translate into only 1.8 months of inventory in the greater Toronto area and 2.1 months in the city of Toronto.The difference is due to the larger supply of condominium apartments available for sale in the city, predominately in the central core. In early 2015 there was 2.2 months of inventory in the greater Toronto area and 2.4 months in the city of Toronto. These numbers favor sellers but create a troublesome imbalance in the market place. In same trading areas the lack of inventory has reached serious levels of concern. For example in the trading area that encompasses the Riverdale and Leslieville neighbourhoods, there are only 1.1 months of inventory, a record low.

The problem with these low inventory levels, aside from the fact that they leave buyers frustrated and prevent first time buyers from becoming homeowners, they are placing incredible upward pressure on sale prices.

In January the average sale price for the Toronto area came in at $ 631,092, more than 14 percent higher compared to January 2015’s average sale price of only $ 552,929. In the city of Toronto the number is even higher, and the average sale price in the central core, including all condominium apartment sales which took place in January, is now $ 731,243. If inventory levels stay low the continued pressure on prices will put sustainability in question.

HOGGS HOLLOW: 3 Campbell Cres, Toronto | $4,498,000

Activity was not restricted to the lower priced properties in January. For example, 88 properties having a sale price in excess of $2 million sold in January. This compares with only 44 such sales during the same period last year, an increase of 100 percent. The tight market conditions have driven the average sale price for a detached home in Toronto to $1,061,789 and a semi-detached home to $ 713,972. The problem with semi-detached homes is that there are hardly any available to buyers. There were 10 trading districts in Toronto that had no semi- detached properties listed for sale in January.

LEASIDE: 25 Malcolm Rd, 506, Toronto | $434,000

In the city of Toronto the only abundant source of available inventory is condominium apartments. In January there were 3,231 active condominium apartments listings. This supply represents almost 70 percent of the total available inventory of residential properties listed for sale in Toronto. It is not surprising that buyers are turning to condominium apartments as their only housing choice. In January condominium apartment sales were up by 11.6 per cent compared to last year. Prices jumped by 8.6 percent. In January the average sale price for a condominium apartment was $416,104. In Toronto’s central core the average sale price was $469,723.

It will be interesting to see what happens in February. It is unlikely that tight inventory levels will improve, which means the pressure on prices will continue.  The turmoil in equity markets may have an impact on sales, particularly the upper end, where choice rather than necessity plays a role in buying and selling decisions. Lastly on February 15^th the new lending rules come into effect. After that date high ratio buyers will have to come up with 10 percent downpayments on loans that exceed $500,000. They can still make 5 percent downpayments on the first $ 500,000 of the loan amount. It is not anticipated that this change will have a negative impact on the greater Toronto resale market place.

Report written by LLB, Chestnut Park Real Estate President and CEO, Broker of Record Chris Kapches

Collingwood Market Update – January 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®.

It appears that the New Year has begun in the same way that 2015 ended, summed up by the comment “where has all the property gone”? As indicated in reports throughout last year, 2015 was marked by a robust market with a healthy sales pace outstripping that of the year previous throughout the entire year, month to month and year over year. Supply, however, was simply unable to keep up, and while sales surged, new listings lagged in every month but one, leading to the inevitable – a remarkably tight market with more buyers chasing fewer properties. As indicated, that general trend appears to have carried over into 2016 with an ongoing shortage of listings. In January 2016, only 249 new listings came onto the market compared to 299 one year earlier, marking a drop of 17%. Even more noteworthy is the fact that the foregoing decline is from a month which itself had registered a significant reduction of listings from the year previous. In other words, January 2015 had more than 31% fewer new listings recorded than January 2014 when 435 properties where logged as coming onto the market. Not surprisingly the total number of active MLS® listings at the end of January 2016 reflects this same trend and reinforces the tight market conditions with a 26% decrease in active listings, specifically 987 compared to 1333 for January 2015.

152 JOZO WEIDER BLVD, THE BLUE MOUNTAINS

Sales, however kept pace and actually slightly surpassed the numbers from last year with 106 sales reported in January, up 3% from the 103 sales reported last year at this time. While this increase in sales is modest compared to most of those recorded throughout last year on a year over year basis, it can probably be explained, at least in part by the fact that there does not appear to be much available to buy. The figures may in fact have been quite different had there been more inventory. Total dollar volume sales were up marginally by 1% year over year.

7326 15/16 NOTTAWASAGA SIDE RD, CLEARVIEW

Generally speaking, sales occurred across a range of price points with the greatest pockets of activity being focused in the $250,000-499,999 range where a total of 52 properties were recorded as changing hands compared to 39 last January, an increase of 33.6%, and again in the $700,000-899,999 range where 5 properties changed hands compared to 1 at the same time last year. The higher end is somewhat split with no activity at all in the $900,000-1,499,999 range compared to 3 last year, but 2 sales above $1,500,000 (both being custom built homes located in the town of The Blue Mountains), matching last year’s unit sales performance in this price category.

111 CLEAR WATER CRT, THE BLUE MOUNTAINS

According to the Canadian Real Estate Association’s report at the end of December 2015, interest rates are not expected to begin rising any time soon, and later than previously expected. In fact the forecast is that they will remain on hold until late in 2016 or beyond. Consequently, historically low interest rates should continue to support sales and prices throughout the rest of the year. Despite ongoing volatility in the equity and commodity markets (particularly in relation to oil prices), economic forces point to a countervailing strengthening in the central region economies of Canada fuelled by the improving recovery and job picture south of the border, though this would appear to be far from hiccup free.

All in all, and for all the reasons stated, this is an excellent time to sell if you are considering a larger home, downsizing or a lifestyle change. Moreover, as it is becoming increasingly expensive for many Buyers to purchase in urban markets, many families and empty nesters are moving to the Southern Georgian Bay area where they are able to purchase more affordable homes in all price categories without sacrificing quality of life.

Prince Edward County Market Update – January 2016

While the winter so far has been relatively mild and snow free, it remains a quieter time in Prince Edward County (“the County”). After a remarkably busy and robust real estate market across the County in 2015 in which Chestnut Park Real Estate Limited (“Chestnut Park”) established itself as the #1 real estate brokerage in total dollar volume of real estate sold in 2015*, January proved to be a time of pause in the property market across the County. This is traditionally the case, but may in fact have been compounded by the economic uncertainty playing out both globally and closer to home due to the upheaval caused by falling oil prices, and volatility in the equity and currency markets (including the Canadian dollar).

Many potential buyers may be trying to assess how current market conditions may play out and the impact they may have upon their investment choices and whether to proceed with property purchases, particularly in the discretionary or vacation property markets. All of this may be having a bit of a dampening effect upon real estate activity in the County straight out of the gate in 2016, however initial volatility appears to have calmed somewhat, and the nearby Toronto and area real estate market actually improved upon the sales performance for the same period one year ago.

A total of 19 properties were sold in the County in January, 28% fewer than the 24 properties sold last year at this time. Listings are down even more however, with 32% fewer new properties coming onto the market than last year, with 104 properties listed compared to 152 in January 2015. The market remains tight and that is reflected in the fact that active listings at the end of January were down 28% with only 326 properties on the market compared to 451 last year. With inventory down, fewer properties are available for buyers, which should have the effect of pushing prices higher. This proved to be the case for most of last year which consistently experienced a shortage of real estate product. In fact however, prices for January actually fell somewhat compared to the beginning of last year with the Quinte & District Association of REALTORS® (“the Quinte Board”) recording the average sale price as $237,942, down 11% from a year earlier when it came in at $267,835.

As indicated in earlier reports, the smaller statistical survey available in the County due to the smaller number of properties bought and sold as compared to larger and more populous trading areas inevitably results in greater statistical swings depending upon the constitution of the particular cross-section of properties that changed hands at any particular time. In January therefore, the fewer properties that did sell were apparently more heavily weighted at the lower price range and therefore dragged the average sale price down from a year earlier. The properties that did sell however, sold in less time than those which sold in January 2015, taking an average of 71 days, 17% faster than the 86 days recorded a year earlier.

Activity across the broader Quinte Board which includes Belleville, Trenton, etc. was actually relatively on par with last year’s performance with only 1 more sale recorded then a year earlier (160 vs. 159), but the market was much tighter with 23% fewer new listings coming onto the market, reflective of the shortage of inventory being experienced across many of the areas served by Chestnut Park, meaning that purchasers have to hunt longer, and compete for those properties that reflect value.
With that in mind, and given the comparative affordability and competitive price edge of the County compared to other comparable vacation property regions, the outlook is favourable for those thinking of putting their properties on the market for sale. Financing conditions remain attractive to buyers with interest rates hovering at historically low levels for the remainder of the year, and forecasts calling for increased economic strength and recovery in the central regions. The main qualifier remains ongoing volatility in the equity markets and uncertainty as to the reach of the negative effects of the collapse in oil prices, and any consequent impact for the future.

* according to the the Quinte Board – Sales Report by Agency – Sale Date Jan1/15 to Dec 31/15

Toronto Real Estate Market Update – December 2015

It’s almost anticlimactic to write about the Toronto residential resale market for December and year end 2015. The anticipation of a record breaking year had evaporated by September. Barring some economic catastrophe, by the early fall it was becoming apparent that the long standing record of 93,193 sales achieved in 2007 was going to fall this year and it did, dramatically.

By year-end 101,299 properties were sold by Toronto and area realtors, and that does not include the thousands of new construction properties that were sold over the same period. The sales achieved in 2015 exceeded the 2007 record by almost 10 percent.

That was not the only new record that was established in 2015. The average sale price for 2015 came in at $622,217, the highest annual sale price in history. It shattered the previous high of $566,624 achieved in 2014. This also represents an increase of almost 10 percent.

The rising average sale price for properties now means that it costs more than $1 Million to buy a detached house in Toronto. In December that number came in at $1,039,638. It also means that a large segment of Toronto’s resale market is now composed of properties with sale prices that exceed $1 Million. In 2015 10,867 properties were reported sold in this category, almost 11 percent of the entire market. In 2014 only 7,364 properties above this price point sold. Similarly $ 2 Million plus sales also increased dramatically in 2015. There were 1668 properties sold in this price point, a 43 percent increase over the 1,168 sold in 2014.

A concern throughout 2015, and one that will impact the Toronto and area resale market at least in early 2016, is the supply of inventory. At year-end there were only 1.8 months of inventory in the greater Toronto area. In 2014 there were 2.2 months, also low.

In the City of Toronto there were 2.2 months of inventory at year end. This compares with 2.4 months of inventory at the end of 2014. The larger supply in the City of Toronto is due to the high number of condominium apartments available for sale.

Condominium apartment sales were also a bright spot in 2015. In December 30 percent of all properties reported sold in the greater Toronto area were condominium apartments, almost 15 percent more sales than for the same period in 2014. On average that ratio of sales, between condominium apartments and freehold properties, was achieved every month during 2015. That means that more than 30,000 of the 101,299 reported sales for 2015 were condominium apartments, the bulk of these sales, approximately 60 percent, taking place in the City of Toronto. In the City of Toronto the average sale price for condominium apartments came in at just over $400,000, a long way from the cost of detached and semi-detached homes. Condominium apartments have become the entryway for first time buyers into Toronto’s record breaking market.

Although 2015 ended on a market high, a number of negative economic changes began in December and cloud the horizon as we attempt to peer into 2016. In December the Toronto stock market dropped precipitously, a drop that has continued into the first week of January. The Bank of Canada has reduced its 2016 forecast to less than 2 percent growth, probably closer to 1.5 percent. The west continues to suffer as a result of declining oil prices. As of the preparation of this report oil prices were hovering at $30 a barrel, the lowest they have been in more than 10 years. On the international scene China continues to struggle, with no sign of a change in it stagnating economy. When the Chinese economy slows, commodity oriented countries such as Canada are immediately impacted.

The falling Canadian dollar is both a positive and negative factor in the economy. It clearly makes Canada’s exports more attractive, but conversely it makes buying imported goods more expensive, making life more expensive for Canadians. It does mean that we will not see an increase in the bank rate anytime soon, which in turn means a continuation of historically low mortgage rates. It may be that these low rates, combined with Toronto’s attraction for new immigrants and those migrating from less prosperous areas of Canada, or what has been called the “Switzerland appeal,” may once again power the Toronto residential resale market to another record year .Given the number of properties that sold in 2015, a more prudent analysis would suggest that the Toronto and area market will come off the highs of 2015 and produce sales of closer to 95,000 properties in 2016, which would still make 2016 the second best year on record.

Muskoka Real Estate Market Summary – 2015

2015 was a banner year for the Muskoka and area recreational market.  Chestnut Park and its sales representatives were responsible for the highest volume of sales in the firm’s history, surpassing even the exceptional results achieved in 2014.

All of the markets encompassed by the Muskoka and area Realtor’s Association produced positive numbers in 2015.  The Association reported 1160 recreational properties sold, 23 percent higher than the 890 properties reported sold in 2014.  Lake of Bays reported 112 properties sold as compared to only 84 in 2014, an increase of 33 percent.  The Haliburton Highlands also reported strong numbers.  There were 320 recreational property sales in 2015, a 30 percent increase compared to the 246 properties sold in 2014.

Muskoka’s big lakes, Lake Joe, Lake Rousseau, and Lake Muskoka, have produced increased sales for three consecutive years.  In 2013 there were 223 reported sales on the big lakes.  That number increased to 266 in 2014 and then further increased to 292 in 2015.  Compared to 2013 and 2014, the results achieved are 19 and 31 percent respectively.

The bulk of the activity on the big lakes was in the $2.5 Million price range.  An analysis of sales having a sale price in excess of $1 Million indicates that in 2015 there were 100 properties sold in this price category.  This is an increase of 15 percent compared to the 87 recreational properties that sold in 2014.  The average sale price for all recreational properties sold with a sale price greater than $1 Million was $2,560,740.  In 2014 the average sale price was $2,693,322.  This difference in average sale price indicates that there were more lower priced properties sold in 2015 (i.e. closer in value to $1 Million) than in 2014.  For example if we review sales having a sale price in excess of $1.5 Million, the average sale price for these properties sold in 2014 was $3,002,028, but up substantially to $3,245,708 in 2015, an increase of more than 8 percent.

Further indication of the strengthening of the big lakes market in 2015 is the time it took for cottage properties to sell and the sale to list price ratio of these properties.  In 2014 it took 80 days (on average) for all properties with a sale price of $1 Million or more to be reported sold.  For properties in the $1.5 Million plus range it took 82 days from listing to sale date.  In 2015 both of these numbers decreased to 73 days for properties having a sale price of $1 Million or more and 78 days for those properties having a sale price of $1.5 Million or more.  Similarly the sale to list price ratio improved from 93 percent to 94 percent in both of these categories year over year.

What these statistics tell us is that there were more sales in 2015, these sales happened faster than in the past, and that sale prices were closer to asking prices than past years, all signs of a strong, broad market.

Chestnut Park and its sales representatives produced a record breaking year for our buyers and sellers in 2015.  Total dollar volume of sales exceeded $250 Million, the first time that that number has been surpassed.  Our total number of recreational property sales was also up by 10 percent, another record for the firm.  In Port Carling our office exceeded the results of our next closest competitor office by more than 46 percent in dollar volume of sales, a great accomplishment by Chestnut Park’s sales representatives.

Although 2015 was a market high, a number of negative economic changes appeared in December and have carried over into the early days of January.  These changes cloud the horizon as we attempt to peer into 2016 and the market we might encounter.  In December the Toronto stock market dropped precipitously, a drop that has continued into the first week of January 2016.  The Bank of Canada recently reduced its 2016 forecast to less than 2 percent growth, probably closer to 1.5 percent.  Western Canada continues to suffer as a result of declining oil prices.  As of the preparation of this report oil prices were hovering at $30 a barrel, the lowest they have been in more than 10 years.  On the international scene China continues to struggle, with no sign of change in its stagnating economy. When the Chinese economy slows, commodity oriented countries such as Canada are immediately impacted.

Recreational property purchases are discretionary.  History has demonstrated that during slow economic periods recreational markets also slow.  Hopefully by the time the market gears up in early spring some of these dark economic clouds will have cleared.  The low Canadian dollar (69.57 cents to the American dollar at the time of this report) may see more Americans purchasing properties in the Muskoka and area marketplace.  The bottom line is that we enter 2016 with various economic uncertainties that were not present in 2015.

Prince Edward County Real Estate Market Update – December 2015

As is the case every year, with January comes a look back at the year just passed and new year musings as to what the coming year will bring. This year is no different. With all of the figures reflecting the performance of the Prince Edward County (“the County”) real estate market in for 2015; sales and listings numbers logged, reviewed and justified,then recorded in the Enhanced Statistical Query Report produced by the Quinte & District Association of REALTORS® (“the Quinte Board”); the very strong and positive performance of the 2015 market is confirmation of the fact that the County has definitively taken its place on the map as a go to destination of choice in Southern Ontario.

The County real estate market closed out the year on a very strong note with December’s figures defining tight market conditions with limited product, ongoing strong demand, and rising average sale prices. December’s real estate performance contributes to the strengthening trend experienced in the County throughout the year, ending the season on the same high note. Having said that, 2016 has started off on a rather negative economic footing with steep declines in the equity markets, both here and south of the border, further compounded by falling oil and commodity prices which so far appear to be outweighing any consequential positive impact of the sliding dollar on the manufacturing and export markets. This mixed with historically high household debt levels and the potential for moderate tightening in lending conditions may add to the broader economic pain being experienced across the country, and dampen real estate prospects somewhat for the year to come.

As stated in earlier reports, the smaller sampling of properties represented in the wards that constitute the County real estate market inevitably results in greater statistical swings depending upon the particular cross-section of sales that took place within the period in question, but continues to provide some indication of market strength and the direction in which it is trending. According to the Enhanced Statistical Query Report, the Quinte Board reported a 14% increase in sales in the month of December compared to the last month of the year in 2014. Specifically 33 properties were reported sold this December compared to 29 last year. That brought the total number of properties sold in the County in 2015 to 591 as set out in the Quinte Board Enhanced Statistical Query Report representing reconciled annual sales from the period spanning January 1 through December 31, 2015. This constitutes an 8% increase over the 548 sales recorded in the County during 2014.

Sales across the entire Quinte Board were equally robust with sales in December besting those from the year previous by 8% (188 vs 174) and annual figures coming in15% better than in 2014 with a grand total of 3399 properties changing hands compared to 2966 the year before.

As indicated, property supply remains tight with listings down again in December with only 40 new properties coming onto the market compared to 46 the year previous, a further 16% decline bringing the annual deficit in listings for 2015 to 9% with a total of only 1418 properties coming onto the market this year compared to 1555 last year. Not surprisingly, combined with the robust pace of sales, year-end reported inventory was down 23% for the month of December with only 280 active listings compared to 362 at the same time the year previous. Listings for the broader Quinte Board are also down 7% for the month year over year and 3% overall on an annual basis.

As an aside, the properties that did sell in December took 26% longer to sell than did those that sold in December the year previous, potentially reflecting the fact that the limited supply of properties is pushing sales to properties that otherwise would not have sold and had been lingering on the market. Interestingly enough, annual comparisons for the entire year also reflect a longer time period to sell the properties that did sell despite the higher volume of properties that changed hands. Perhaps again that is a reflection of the fact that more of the older supply of properties that would otherwise not be reflected in the sold statistics were being snapped up with the hotter market.

Finally, consistent with the fundamental principles of supply and demand and the logical outcome of a stronger market with tight or limited supply, average sale prices continue to rise. In December the average sale price came in at $329,788, a whopping 47% above the figure recorded in December 2014 when the average sale price for the month was $224,272. Even spread over a longer period of time, and representing a broader cross-section of properties, the increase in the average annual sale price for 2015 compared year over year with 2014 was 17% ($304,075 in 2015 vs $$259,406 for 2014), a hefty increase reflecting the heightened real estate activity and interest in the County.

All in all an impressive performance and a positive note to end 2015, and a promising way to ring in the New Year. Only time will tell what 2016 will bring considering some of the economic clouds on the horizon and some rumbling in the world of debt financing. That said, County properties remain well positioned moving forward with respect to comparative value and affordability, and will continue to benefit from the natural attributes of the area including its scenic beauty and proximity to higher priced and vibrant urban centres.

Collingwood Real Estate Market Update – December 2015

This report summarizes the monthly stats for the Western Region of the Southern Georgian Bay Association of REALTORS® (SGBAR). For clarity, 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. We are now known as Southern Georgian Bay Association of REALTORS®. For this monthly report, our focus remains on the Western Region.

We saw 127 sales in December 2015 which is up 18% from the 108 sales reported in December 2014. The total number of sales for the year is 2386, showing a 15% increase from 2080 sales from the same time last year. The total sales dollar volume for December 2015 is $46,685,516 up 29% from $36,306,059 in December 2014. 

2015 has been a strong year for properties over $1.0M.  There have been 48 properties sold over $1.M which is a 23.1% increase over 2014. Of the 6 properties sold over $1.0M in December 2015, 3 properties were sold for over $1.5M.  Overall property types included waterfront, view properties, century homes and executive custom homes.

In previous reports we have noted that sales in the $500K to $799,999K showed the strongest growth in 2015 over 2014.  That price category ended the year as a close second in growth with 232 sales for the year compared to 177 for 2014, reflecting a 31.1% increase. Leading the way are sales in the $350K to $499,999K price range which showed a 31.4% increase with 460 sales for the year vs 350 for 2014. 

On the listing side of things, overall supply remained low. The number of active MLS® listings at the end of December was 1066 compared to 2288 for December 2014 which is a 47% reduction. There were 170 new listings in December 2015 vs 192 for December 2014. The total number of listings for the year was 4347 vs 5129 for 2014, which represents a decline of 15%.

The monthly Sales to Listing Ratio for December 2015 is 74.71% which makes a clear statement that we continued to experience a Seller’s Market.  The Sales to Listing Ratio for 2015 is 54.89% up from 40.55% in 2014.

The number of months of inventory is an important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. Based on average monthly number of sales throughout 2015 and listings for December 2015, we currently have 5.3 months of supply. 6 months of supply is considered the benchmark for a balanced market. Less than 6 months of supply favors the Seller because there are fewer choices for the Buyer. More than 6 months favors the Buyer and leads to lower prices.

Expired listings continued to decline.   There were 206 expired listings in December 2015 vs 251 in December 2014, representing an 18% decline.  The total number of expired listings for 2015 was 1687 vs 2415 at the end of 2014, marking a 30.1% decrease in expired listings 2015 over 2014.

As 2015 ended, we can say with all certainty that it has been a strong market for Sellers. Total dollar volume for the year increased month over month throughout the year with a tight supply of listings. And, even though the mild weather conditions in December prevented the ski hills from opening, the Southern Georgian Bay area was bustling and preparing for what is shaping up to be a strong 2016.

Toronto Real Estate Market Update – November 2015

Two more market records were broken by the performance of the Toronto resale market in November. The first was the sales results for the month of November. Toronto area realtors were responsible for 7,385 property sales in November. This result represents the highest number of reported sales ever achieved for the month. By comparison only 6,476 sales were reported in November 2015, an increase of more than 14 per cent. This is an incredible achievement at a time normally associated with the beginning of the holiday season when buyers in particular are focused on matters other than real estate.

Secondly, and perhaps more importantly, by month end the Toronto Real Estate Board had reported 96,401 residential resales for 2015. This number shattered the previous annual record of 93,193 sales achieved back in 2007, with one more month to go before the greater Toronto’s sales totals are finally calculated. Last December there were 4,418 reported sales. If this December’s results are equal to last year’s, and the anticipation is that they will be higher, 2015 will close out with almost 101,000 sales. This would be a 5 per cent increase over the record year of 2007.

The growth in sales can be attributed to the increase in condominium apartment sales since 2007. Over the past eight years numerous condominium projects have reached the registration stage, and consequently have become available for resale. In November there were 1,198 detached and semi-detached properties reported sold in Toronto’s 416 districts. In the same month 1,351 condominium apartments were reported sold, almost 13 per cent more than the total amount of free-hold properties sold.

The average sale price for condominium apartments was $415,316, much lower than the average sale price for detached and semi-detached properties. In November the average price for a detached house in Toronto came in at $1,018,621. Semi-detached properties came in at $750,608. It is clear that for many buyers the only affordable alternatives are condominium apartments.The average sale price for all properties sold in the greater Toronto area was $632,685, almost 10 per cent higher than the $577,502 achieved in November 2014. The average sale price for 416 area sales came in at $654,221, about 4 per cent higher than the broader greater Toronto area market.

The number of listings coming to market has been increasing over the last few months, but still insufficiently to meet demand. In November 9,609 new properties came to market, a 10.2 per cent increase compared to the 8,716 properties that came to market last year. Notwithstanding this increase, at month end the Toronto market was still almost 9 per cent short of the number of listings it had in 2014. Last year there were 14,717 active listings at the end of November. This year we enter December with only 13,454 active listings.

In November 130 properties were reported sold having a sales price of $2 Million or more, a very healthy number for November. Aside from the high end market, as we near the end of the year the concern remains that Toronto’s average sale prices have reached levels that might not be sustainable. The historically and exceptionally low mortgage interest rates have been the primary reason for the record breaking sales that have taken place throughout this year. Fortunately there is no immediate risk of rates rising. The Canadian economy continues to be sluggish, particularly in Western Canada were less than $40 a barrel oil prices have crippled real estate sales. If average sale prices continue to rise at their recent double digit pace, any increase in mortgage interest rates will see sales stall and prices level off. Continued rising inventory levels will help ease this potentially dangerous situation from developing.

Toronto Real Estate Market Update – September 2015

During a year in which numerous records have been established by the performance of the greater Toronto residential resale market, it is not surprising to discover that a new record was set in September. The 8,200 properties reported sold was a record number for properties sold for any September since the Toronto Real Estate Board has been maintaining statistics. September was just another month in a string of months in which Toronto area buyers remained determined either to buy for the first time or move up to a more expensive property. As a result, the cumulative total of reported property sales for the first 9 months of 2015 is 80,331. The record for sales, set in 2007 at 93,193, when the average sale price was only $376,236, is on the verge of falling.
If there is a concern with the Toronto resale market place it is available inventory. Notwithstanding that September was a record breaking month, the positive variance of reported sales as compared to September 2014 was only 2.5 percent, the lowest positive monthly variance in almost two years. There is simply not enough freehold, detached and semi-detached supply, to meet the constant demand for housing in Toronto.
It is the lack of supply that is primarily responsible for the constantly increasing price of housing in Toronto. It now costs more than $1 Million to buy the average detached home. In Toronto’s central districts the average price of a detached house is now almost $1.7 Million. There are districts in the west (Kingsway) and districts in the east (Riverdale and the Beach) where the average sale price for a detached house is also $1 Million or more.
Overall the average sale price for the greater Toronto area came in at $627,395, 9.2 percent higher than last September’s average sale price of $574,424. Toronto’s average sale price has practically doubled in the last 10 years. In 2005 the average sale price was a mere $335,907. No doubt these constantly rising prices have been motivating buyers to get into the market and become homeowners. That and the historically low interest rates.
Aside from rising prices, the market has changed in other ways since 2005. In September 2005 the market reported 7,326 property sales. At the time that was a record, as September 2015’s 8,200 sales established a new record. In 2005 it took almost 40 days for all properties to sell. This September the average days on the market was only 22, and that number was made higher by the large number of condominium apartments included in that statistic. In the last decade the manner in which buyers purchase properties has clearly changed. The slow, deliberate process no longer exists. Today buyers are more educated, by their realtors and by information in the public domain (realtor.ca). They now know what they want, and when it becomes available, offers are submitted, which often result in multiple and pre-emptive offers. In some districts the average days on market can be calculated in single digits.
The other major change between 2005 and today is the price that buyers will pay for properties on the market. There were few instances where buyers paid asking or slightly higher in 2005, and when they did it was not with the consistency in the overall market that we witness today. In September all detached properties across the entire greater Toronto area sold for 100 percent of their asking price. In the city of Toronto it was 101 percent. All semi-detached properties sold for 102 percent of their asking prices. In the city of Toronto it was an eye-popping 105 percent, 107 percent in the eastern districts and 106 percent in the central districts, where the average sale price for a semidetached property came in at almost $1 Million.
Sales of properties were not restricted to the lower end of the market. There were 903 properties reported sold having a sale price in excess of $1 Million, 154 having a sale price of $2 Million or more. In September there were 32 properties reported sold having a sale price in excess of $3 Million, 28 percent more than the 25 properties sold in this category in September 2014. It would appear that the high end of real estate sales in Toronto now begins at $3 Million.
Going forward the concern is the shortage of inventory and the impact it will have on prices and ultimately on affordability. At the end of September there were 16,165 properties available for sale, 7.3 percent less than the 17,765 that were available at the same time last year. That translates into only 1.9 months of inventory in the greater Toronto area, and 2.2 months of inventory in the city of Toronto, the higher level of available inventory due primarily to the high concentration of condominium apartments. This shortage of inventory will continue to generate competition for detached and semi-detached properties that become available for sale, and sale prices will continue to escalate. Given the demand in Toronto, the only thing that will prevent October’s numbers from reaching new records is the lack of available properties for sale.

Toronto Real Estate Market Update – June 2015

Once again the Toronto residential resale market posted new records for market performance. The first was the 11,992 properties reported sold, the highest number of properties reported sold for the month of June since the Toronto Real Estate Board began tracking Toronto area sales. June’s reported sales were 18.4 percent greater than the 10,132 properties reported sold in June 2014.

There is no doubt that historically low mortgage interest rates continue to be the driver of Toronto’s residential resale market place. Low interest rates and tight inventories, particularly in the City of Toronto have been responsible for many of the records that have been established in 2015.

Despite the high volume of sales in June, a new record for the monthly average sale price was not established. The average sale price came in at $639,184. Although this monthly average sale price was more than 12 percent higher than the average sale price for June 2014, it did not exceed May’s average sale price of $ 649,800, which remains the record for the greater Toronto area. The average sale price for the City of Toronto came in at $682,264, almost 7 percent higher than the average sale price for the greater Toronto area. This number would have been substantially higher if it did not include the numerous condominium apartment sales which form the bulk of properties sold in the City of Toronto. Condominium apartments (see below) are selling at prices 38 percent lower than the average sale price for all properties sold in the City of Toronto.

In June all properties (on average) sold in 19 days. Last year it took 22 days for all properties to be reported sold. Interestingly properties sold faster in May. In May it took only 18 days for all sales to take place. Nonetheless 19 days remains a blistering pace, especially when it is considered that these sales include 2,700 condominium apartments, which are selling at a less robust pace than freehold properties. As we have seen in previous months in 2015, the pace of sales varies depending on trading district and housing type. As has been the case all year, the eastern districts remain the most robust. In June all detached properties in the eastern districts sold in 11 days at sales prices averaging 104 percent of their asking prices. Semi-detached sales were even faster. All semi-detached properties in the eastern districts, and there were 189 of them, sold in an eye-popping 8 days and for sale prices averaging 106 percent of the asking prices. These are unprecedented numbers.

Although not as frothy, sales of detached and semi-detached homes in the City of Toronto’s central districts were also dramatic. In central Toronto the average price for a detached house came in at $1,664,694. For the City of Toronto the average price was $1,051,912, both numbers establishing new benchmarks for detached property sales. Not only were these average sale prices unprecedented, but sales took place in 19 and 16 days respectively, and for sale prices 101 and 102 percent of their asking prices. It is clear that notwithstanding the steep rise of prices for detached and semi-detached homes in the central districts, Toronto buyers have an insatiable appetite for these housing forms.

Condominium apartment sales established a record of their own. Condominium apartment sales were up an amazing 21.3 percent compared to June of 2014. In June 1,906 apartments were reported sold in the City of Toronto (416 area). These sales represented 43 percent of all sales in the City of Toronto for the month of June. Although the volume of sales was up dramatically, it was not matched by the increase in the average sale price. The average sale price for condominium apartments came in at $418,599, up 7 percent compared to June 2014, but is still considerably lower than average sale prices for freehold properties.

Although more condominium apartments are selling and at higher prices, they are not selling as fast as detached and semi-detached homes, nor are they selling for prices exceeding list prices. In June all condominium apartments in the City of Toronto sold in 27 days, 8 days slower than freehold properties. In addition all apartments sold for only 98 percent of their asking prices. As was mentioned earlier, inventory levels continue to be a problem for buyers. In June 17,746 new listing became available in the greater Toronto area. This was an increase of 6.7 percent compared to the 16,633 that became available in 2014. Notwithstanding this increase, entering July there are 13.1 percent fewer available properties for buyers to purchase than there were last year at this time. Last year there were 20,686 available properties, this year there are only 17,972. Translated into months of inventory we see that there are 2.0 months of inventory for the greater Toronto area and 2.2 months for the City of Toronto, The 5,208 condominium apartments for sale account for the slightly higher months of inventory in the city of Toronto. In both cases, however, 2.0 and 2.2 months of inventory reflect strong seller markets. Looking forward I anticipate a small pull back in the market in July. This is consistent with historical seasonal cycles. Last July the market retracted by about 10 percent compared to June. Expect a similar retraction when July’s numbers are reported. One thing is clear, the annual record for most reported sales is well on its way to being shattered in 2015.