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.

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.

Report prepared by Chestnut Park’s CEO Chris Kapches

Prince Edward County Real Estate Market Report – June 2015

As we finally move into the warmer months and watch the picturesque landscape of Prince Edward County (“the County”) come to life with the fields, orchards and vineyards beginning to show signs of the bounty for which the area is renown, the Quinte & District Association of REALTORS® (“the Quinte Board”) has produced its statistics for the month of June, confirming that the real estate market in the County this year is playing out very much as it did last year at midpoint in the season, with remarkably consistent buying and selling behaviour as well as property listing and inventory trends. Generally speaking sales are proceeding at a pace that is both strong and steady, reflective of a solid and enduring market that is neither volatile nor fickle, but rather rooted in excellent and established fundamentals of value associated with the area.

Further to this, according to the Enhanced Statistics Statistical Query Report prepared by the Quinte Board for the month of June, 71 properties sold across the County, 2 more than last June when 69 properties were reported as sold, constituting a moderate 3% increase. As indicated year to date sales are closely mirroring those of last year at this point with 268 so far compared to 271 last year at the half way mark, a virtual dead heat. The Quinte Board generally, however, which covers a much broader area including Belleville, Brighton, Trenton, Madoc and Marmora amongst other centres continues to report more significant gains over last year’s numbers, reporting a 35% increase in sales Board wide with 448 reported sales this past June compared to 332 the year previous. Year to date numbers also reflect a substantial year over year increase of 20% with 1784 sales thus far compared to 1484 in the first half of 2014. The higher price point in the County may have something to do with this differential as well as the particular economic and demographic trends in the respective areas.

Continuing on with the overall story of stability, listings too are remarkably consistent with last year. According to the Enhanced Statistics prepared by the Quinte Board, 145 new listings came onto the market in the County in June, only one fewer than in June of last year. The year to date picture is no different with a grand total of 920 new properties being listed compared to 918 last year at this time. Not surprisingly then the inventory is virtually the same as it was last year at the end of June with 714 active listings on the market compared to 716 last year, truly a negligible difference. As for the Quinte Board generally, the June report indicated a 3% increase in listings over last year with 765 new properties coming out across the Board compared to 746 last year, with year to date figures reflecting a similar trend and a 4% gain (4423 as compared to 4258 in 2014).

The steady and solid performance of the real estate market in the County is further shored up by a 6% increase in average sale price across the region. In June, the average sale price of a property sold in the County was reported as being $261,556 compared to $245,707 the year previous.

Finally the particular cross-section of properties that sold across the County were sold on average in 97 days which based on this particular sampling is 40% longer than last year when calculations for the month of June established an average of 69 days on the market for properties before selling.

Overall, based on the performance of the property market in the County for the first half of the year, the remainder of the year is likely to play out in similar fashion with no indication of interest rate hikes anywhere on the horizon and general market conditions for the surrounding areas looking relatively stable. The main qualifier appears to be the broader economic climate with some significant ripples being experienced in international markets, particularly in Europe with the Greek monetary crisis, and in China’s equity markets. The extent to which all of this will affect the broader performance of the Canadian economy is still unclear. Global factors aside recent reports continue to show that Canada still has a way to go before its economy is back firing on all cylinders and trade figures are consistently more positive.

Prepared by: Richard Stewart, Vice-President & Legal Counsel, Chestnut Park Real Estate Limited, Brokerage

Toronto Real Estate Market Update – May 2015

The Toronto residential resale market posted new records for sales in May, as it has in previous months this year. Historically low mortgage interest rates, extremely low inventory levels, especially for detached and semi-detached properties, are the dominant drivers of the market. At the end of May there were 18,858 properties available for sale, more than 10 percent less than the 20,679 that were available at the end of May 2014. As of the date of preparation of this Market Update buyers can secure a 5 year fixed term mortgage with an interest rate of 2.54 percent, with even lesser rates available for shorter terms. With little likelihood that new listings will increase over the next few months, and mortgage rates holding firm with increases unlikely for the remainder of 2015, expect this market to remain a seller’s market for the foreseeable future.

In May 11,706 residential properties were reported sold for the greater Toronto area. This compares to 11,013 that were reported sold last year, a 6.3 percent increase, and a record month for the greater Toronto area. In April there was a 17 percent increase compared to April 2014. Although there was a pullback from the highs of April, the 11,706 properties sold in May is still very impressive, especially for a market place that has already produced over 30,000 sales in just the first four months of the year.

Last month I reported that the speed at which these properties were selling was unprecedented. In May sales took place at an even faster pace. All properties (on average) sold after only 18 days on market. In April all properties sold in 20 days. Last May all properties were reported sold in 21 days.

In some trading districts the pace of sales can only be described as blistering. For example all properties in the eastern trading districts sold in only 13 days. That represents 1,132 properties. It is difficult to find superlatives for this market. In Toronto’s central districts all detached properties, 490 of them, sold in just 13 days, and for an eye-popping average sale price of $1,731,998, and 102 percent of the asking price.

Sales of semi-detached homes in the central districts were even faster. All semi-detached properties sold in just 10 days at an average sale price of $966,948, and for prices that were 106 percent of their list price. Breathtaking results. In the eastern districts, because of lower price points and even fewer properties available for sale, sales for detached and semi-detached properties were even faster.

It will be of no surprise to anyone following these market statistics that average sale prices continue to rise. In May the greater Toronto area market place established a new record for monthly average sale prices, coming in at $649,599, and eclipsing the previous record of $635,899 which was only achieved in April. May’s average sale price of $649,599 was more than 11 percent higher than the average sale price of $584,946 that we saw in May 2014. Ironically, at that time, it was also a record average sale price for the greater Toronto area. The average sale price for homes in the City of Toronto (416 area) is even higher, coming in at $718,350. Currently Toronto’s least expensive area to live in is the eastern districts. The average sale priced there is only $584,567, but a buyer will have to go quite a ways east to find the average priced home. The eastern districts closer to the city’s central core are averaging over $800,000.  As I have indicated in previous reports, these numbers would be even higher if condominium apartment statistics are not included. As the market progresses we are seeing even condominium prices also increasing, and fairly dramatically.

In the City of Toronto, where most condominium apartments are located, condominium apartment sales increased by almost 13 percent compared to May of 2014. This 13 percent increase represented 1,762 sales, which in turn represents 42 percent of all sales that took place in Toronto. Not only were volumes up, but so were average prices. In May the average sale price for condominium apartments came in at $422,947. It was only a few months ago that the $400,000 threshold was exceeded. In Toronto’s central core the average price for a condominium apartment is rapidly approaching $500,000. In May the average sale price came in at $492,100.

It should be noted that notwithstanding rising volumes and sale prices for condominium apartments, the pace of sales, though improving, lags behind freehold sales. In May it took 27 days for all condominium apartments to sell in Toronto, 15 days slower than detached properties and an incredible 18 days longer than semi-detached properties. Unlike detached and semi-detached homes condominium apartments are not selling for more than their asking prices. In May condominium apartments on average sold for only 98 percent of their list price.

Properties selling with a sale price of $1 Million or more are now becoming the norm in Toronto. In May 1,412 properties having a sale price of $1 Million or more were reported sold. Million dollar plus property sales now represent more than 12 percent of the overall market place. It should be noted that 240 properties were reported sold having sale prices exceeding $2 Million.

New records are being created monthly. At this pace the record for the most sales in a year is very likely to be shattered. In 2007 93,193 properties were reported sold. At that time the average sale price was only $379,347, 73 percent less than it is today. Short of an economic catastrophe, 2015 will end with reported sales exceeding 100,000 properties.

Toronto Real Estate Market Update – April 2015

The Toronto residential resale market continues to strengthen as we move into the spring buying and selling season. Month after month the greater Toronto market reaches new milestones. All home types, including condominium apartments, saw both price growth and growth in the volume of properties sold.

In April 11,303 properties were reported sold in the greater Toronto area. This compares to only 9,660 sales in 2014, an increase of 17 percent. The increase of 17 percent is the highest year-over-year increase in sales on a monthly basis since before the 2008 recession. Although an increase of 17 percent pales in comparison to some of the recent increases experienced by the Vancouver market, by historical comparison a 17 percent increase is dramatic and unprecedented. For example, last month saw an increase of 10 percent compared to March 2014. That was the first double digit increase in years.

Not only did we see unprecedented sales volume, but all properties sold in record breaking time. All 11,303 properties reported sold (on average) sold in just 18 days. Last April, which was also a very fast sales month, all properties sold in 20 days. Certain housing types in various Toronto trading areas sold even faster. All detached properties in Toronto’s central core sold in just 15 days. They sold for 103 percent of their asking price. The average sale price for these properties? A record $1,591,721. Although prices were dramatically lower in the eastern trading areas, all detached homes in these districts sold in just 11 days at 105 percent of their asking price. The average sale price of these eastern district homes was $746,110, a record price, almost 16 percent more than what detached homes in the eastern districts sold for last year.

Given the high volume of sales and the speed with which they took place it is not surprising to see that the average sale price for all properties sold in the greater Toronto area also set a new monthly record. The average sale price for all properties sold came in at $635,932, a 10 percent increase compared to April 2014’s average sale price of $578,354. April marks the third consecutive month establishing a new record high for average sale prices in the greater Toronto area.

In the city of Toronto the average sale price was even higher. It came in at $690,261. This is a remarkable number when one considers that it includes the 1,706 condominium apartments that were reported sold. If condominium apartment sales are removed, the combined average sale price for detached and semi-detached homes in Toronto would be about $900,000, and dramatically more in some of the more sought-after neighborhoods.

The continually rising average sale price for Toronto properties is redefining the meaning of “luxury”. In April 1275 properties having a sale price that exceeded $1 Million were sold, another record. That represents a 54 percent increase compared to the 828 that sold in the same category last year. There were 195 properties sold that had an average sale price of more than $2 Million. Last year only 135 sold in this category. The “high end” of the market continues to grow every month. In April the 1275 reported sales over $1 Million represent more than 11 percent of the overall market. It is humourous to note that in the midst of these high end sales there were 6 properties that sold having a sale price less than $100,000.

Inventory levels continue to be a problem, contributing to rising prices and the pace of sales. In April 17,248 new properties came to market. Unfortunately this was 5 percent less than the 18,177 that became available to buyers in 2014. The cumulative effect of the monthly shortages is that the Toronto market enters May with only 17,182 properties available for sale, more than 10 percent fewer than the 19,118 that were available to buyers last year. These inventory shortages account for the growing phenomenon of multiple buyers bidding for the same property. This auction-like environment also contributes to the rapidly rising average sale price for properties in Toronto.

For first-time buyers condominium apartments are their only housing refuge, and the numbers indicated that that’s where first time buyers are flocking. In April 1,706 condominium apartments were reported sold, an increase of almost 14 percent compared to last year. These sales represented more than 22 percent of all reported sales. In the city of Toronto condominium apartment sales represented 42 percent of all reported sales.

Prices of condominium apartments are beginning to creep up. For the first time, the average sale price for condominium apartment sales in the city of Toronto exceeded $400,000 ($407,612). In central Toronto, where most apartment sales take place, the average sale price came in at $465,143, another record. Without the financial help of parents, even condominium apartments would be beyond the reach of many first-time buyers.

As we move into May we are firmly on pace to break the 2007 record of 93,193 sales for the entire year. With 30,854 sales already reported in the first four months of 2015, we can anticipate yearend sales exceeding 100,000 properties.

Toronto Real Estate Market Update – March 2015

Market data for March has the Toronto residential resale market poised for a record shattering year. In March 8,940 resale properties were reported sold, 11 percent higher than the 8,052 properties reported sold in 2014. On a year to date basis 19,595 properties have been reported sold in the greater Toronto area. Last year at this time there were 17,851 reported sales, an increase of approximately 10 percent. At this pace more than 100,000 resale properties will be reported sold by year end, shattering the previous record of 93,193 reported sales in 2007. The Toronto resale market, particularly at some price points and for various housing types, has been unstoppable.

As I have reported in recent updates, the market continues to set new records. The average sale price for March came in at $613,933, eclipsing the previous average sale price high of $596,200, achieved only last month. The average sale price for the City of Toronto ($613,933 was the average sale price for the greater Toronto area, including the 905 region) was even higher at $655,067, notwithstanding the proliferation of lower priced condominiums apartments located in the central core of the city.

The average sale price of $655,067 was primarily due to the number of properties selling that have a sale price that exceeded $1 Million. In March 960 properties in this category of homes were reported sold. This is also a record for this price point. Last year in March, which was an active month, only 596 properties were reported sold. The 960 properties reported sold in this category represented more than 10 percent of the overall market. It is interesting to note that 121 of these properties had an average sale price of $2 Million or more.

A bright spot in the March data for buyers was the number of new listings that came to the market. In March 15,531 new properties became available for buyers to purchase in the greater Toronto area. This represents an increase of 5.5 percent compared to the 14,717 new properties that became available last March.  The year over year increase is one of the few that we have seen in recent months. Unfortunately the increase in new listings did not improve the overall availability of homes for sale. At the end of March there were 15,295 properties available for sale, 7.5 percent less than the 16,543 listings available last year.

These properties represent only 2.1 months of inventory. Due to the number of condominium apartments available for sale in the City of Toronto, the months of inventory are a little higher at 2.3 months. The inventory shortages are particularly acute in the detached and semi-detached housing sectors. For example all detached homes in the City of Toronto sold in just 15 days for an average sale price of  $1,042,405, exceeding the average sale price of $1,040,018 achieved for detached homes just last month, another record. The average sale price for semi-detached homes increased fairly significantly to $723,167,also a record. In the City of Toronto all semi-detached properties   ( on average) sold at the speed of light. In March 287 semi-detached properties sold in only 10 days, also a record. The number of semi-detached properties sold would have been even higher had there been more properties available for sale on the market.

Condominium apartments continue to be the slowest sector In the City of Toronto’s resale market, although even that sector is seeing rising prices and sales.  In March 1506 condominiums apartments were reported sold. This is more sales than the combined total of semi-detached and detached properties (1,337) that sold. The 1506 condominiums apartments sold represent an increase of 13.5 percent compared to the number of sales that took place last year.

Sale prices for condominium apartments were not quite so frothy as for freehold properties. The average sale price of condominium apartments in March increased to $398,337 up 3.3 percent compared to the average sale price achieved last year. In central Toronto where most of the city’s condominium apartments are located, the average sale price was substantially higher at $450,584. It was encouraging to see that for the first time it only took only 30 days (on average) for all condominium apartments that came to the market to sell. This is not as fast as the freehold market which is averaging less than 20 days, but a vast improvement compared to the 40 days plus it took to move condominiums apartments last year.

Looking to April expect more of what we saw in March. Mortgage interest rates have further declined— a fixed five year mortgage can be obtained at an interest rate of 2.64 percent—allowing buyers to stay in the market even though prices have been constantly rising. Only a dramatic increase in mortgage interest rates can detour this market. With that likelihood not on the horizon, expect another strong, record breaking month, in April.

Toronto Real Estate Market Update – February 2015

The Toronto residential resale market was distinguished by a number of “records” in February, highlighting its strength and buyers’ insatiable desire to take advantage of the historically low mortgage interest rates. In February 6,338 properties were reported sold, 11.3 percent more than the 5,696 reported sales last February. It must be remembered that 2014 was the Toronto market’s second best year on record, so February’s performance was exceptional.

For the first time the average price for a detached property in Toronto (416 area) exceeded $ 1 Million. In February detached properties saw the highest year-over-year increase. Detached property sales increased by 16.9 percent as compared to February 2014. As of February the average sale price for detached properties in Toronto is $1,040,018, a record. The average price for semi-detached properties also increased to $702,035, up almost 5 percent from last year. Actual sales of semi-detached properties declined by 1.5 percent over the same period, but this decline was due to a lack of inventory and not buyer demand.

A lack of inventory has shaped Toronto’s residential resale market for almost two years. In February only 10,508 new properties came to market, almost 3 percent less than the 10,808 that came to market last year. As a result at the beginning of March there were only 12,793 properties available to buyers across the greater Toronto area, about 9 percent fewer than the 14,019 that were available last year. The properties available for sale translate into only 2.1 months of inventory for the greater Toronto area and 2.3 for Toronto. Toronto’s months of inventory is higher due to the high concentration of condominium apartments in the City’s central core. A balanced real estate market is one that has approximately 4 months of inventory.

In February 628 properties having a sale price of $1 Million or more were reported sold. It is safe to say that a property selling for $1 Million is no longer high end. For example, in February 2005 there were only 105 properties sold that had a sale price that exceeded $1 Million. Those properties represented only 1.7 percent of the overall market. By contrast this February’s $1 Million plus property sales represented approximately 10 percent of the market.

Given the number of properties selling with sale prices exceeding $1 Million it is not surprising that the overall average sale price continues to increase. February’s average sale price for the Greater Toronto Area came in at $596,163, which is a new record. The previous highest monthly average sale price of $587,940 was achieved in October of last year. For the City of Toronto (416 area) the average sale price came in at $630,858, also a record. The most expensive district continues to be Toronto’ central core where the average sale price was $1,584,194 for detached homes and $862,455 for semi-detached properties.

As has been pointed out in past updates, the inventory shortages and the increasing cost of purchasing a detached or semi-detached home in the City of Toronto are driving buyers to choose condominium apartments, particularly first time buyers. These market conditions were reflected in the fact that condominium apartment sales increased by 12.4 percent compared to the same period last year. Average prices did not correspondingly increase. Due to the number of properties available for sale, average sale prices remained almost the same as a year ago at $369,655 for the City of Toronto, and at $428,757 in the central core. In the City of Toronto condominium apartments now account for almost 50 percent of all properties reported sold.

Not surprisingly the pace of sales was very brisk in February. On average all properties that were listed were sold in only 24 days. Last February it took 26 days on the market. In the City of Toronto all properties sold for 101 percent of their asking price. The fastest trading area was the eastern districts, with all properties requiring only 21 days to sell and all selling for 104 percent of their asking price. Within some of the eastern sub districts the pace was even faster, particularly those districts closer to the central core. Sales in these districts only took 13 days on average, with the average sale prices exceeding the list price by almost 107 percent. In this environment it is almost impossible to determine what constitutes fair market value. It is basically what competing buyers will pay.

After two months of reported sales for 2015 this year is on pace to break 2007’s record of 93,193 sales. There have been 10,683 sales reported to date, 9 percent more than the 9,799 that were reported in 2014. The market is on pace to exceed 100,000 sales for 2015. The only thing that will slow this market is the market itself. With no likelihood of an interest rate increase, the constantly increasing cost of housing in Toronto may reach a point where affordability becomes an issue.

Toronto Real Estate Market Update – January 2015

The Toronto residential resale market ended 2014 in strong fashion achieving sales that exceeded December 2013’s results by 9.6 percent.  That momentum continued into 2015, with January posting 4,355 sales, 6.1 percent greater than the 4,103 sales reported in January last year. Although the overall results were robust, primarily due to the availability of inventory, they varied by housing type and location. If the Toronto market maintains this early momentum throughout 2015 it will shatter the 2007 record of 93,193 for property sales.
Once again in January the demand-inventory problem drove results. For example in the City of Toronto sales of detached and semidetached properties actually declined when compared to sales achieved in 2014. In January sales of detached properties declined by 2 percent. Semi-detached properties declined by 3.8 percent. In the 905 region sales of detached properties increased by 10 percent and semi-detached properties increase by a more modest 2.8 percent, highlighting the disparity in inventory and price point between the City of Toronto and the 905 region. Detached properties in the 905 region were $ 300,000 less expensive than similar properties sold in the City of Toronto. Semi-detached properties were more than $ 200,000 less expensive in the 905 region. In January the average sale price for detached houses in Toronto came in at $ 948,713, 7 percent higher than last year, notwithstanding that sales were off by 2 percent, a clear indication of an inventory shortage. The same was true for semi-detached properties. The average price for semi-detached properties was $ 667,452, 7.2 percent greater than last January’s average sale price, despite sales being lower by 3.8 percent.
Average sale prices for detached and semi-detached properties were substantially higher in Toronto’s central districts. The average sale price for central district detached homes came in at $ 1,422,382. For semi-detached properties it came in at approximately $ 800,000. High end sales generally have increased fairly dramatically in the last three years. In January 313 properties having a sale price of $ 1 Million or more changed hands. In 2014 that number was 236 properties, and in 2013 only 195. Since 2013 the number of high-end property sales has increased by more than 60 percent.
Due to inventory shortages and the price points of detached and semi-detached properties in Toronto, more and more buyers are looking to condominium apartments as alternative housing options. In January condominium apartment sales posted an increase of 6.2 percent compared to sales in 2014. The 809 condominium apartment sales recorded in January were 40 percent more than the combined total sales of detached and semi-detached properties. The average sale price of condominium apartments increased by 4.5 percent to $ 382,458. In the central districts of Toronto the average sale price recorded for condominium apartments came in at $ 435,441.
All sales, on average, took place in only 31 days. Last January it took 36 days. Although 31 days on market is not a record it is an indication of a very fast marketplace. In January 2010 sales took place in only 28 days. The slowest January over the last few years was January 2009 when deep in the recession it took 49 days on average for all properties to sell. As has been the case for a number of years, the eastern districts remain the most speedy, with all sales taking place in only 24 days, with detached and semi-detached properties selling even faster. Although there are more condominium apartment sales they are slower than the freehold market. Condominium apartment sales took 40 days in the City of Toronto.
An analysis of inventory indicated that at the end of January there was only 2.2 months of inventory for the greater Toronto area, and 2.4 months for the City of Toronto. The number is higher in Toronto due to the number of condominium apartments available for sale. Needless to say, properties available for sale in Toronto’s eastern districts are very low, resulting in only 1.4 months of inventory.
January did see an increase in new listings coming to market as compared to January 2014. The first month of the year witnessed 9,596 new listings, a 9.5 percent increase compared to the 8,762 listings that sellers put on the market last year. This increase helped with inventory levels, but at the end of the month buyers still had less choice than last year. At the beginning of February there were 11,600 properties available for buyers to purchase, 2.3 percent fewer than last year’s 11,903 properties.
It is no surprise that the average sale price once again rose in January. The average sale price came in at $ 552,575, 4.9 percent higher than last January’s average sale price of $ 526,965. A concern expressed in these reports throughout 2014 was the impact that these constantly increasing prices will have on affordability. Monthly increases have consistently exceeded wage increases by 200 to 300 percent. It has been the historically low interest rates that have bridged the affordability gap.
In January mortgage interest rates became even lower, reaching levels never seen before. The Bank of Canada cut the overnight bank rate by 0.25 basis points, reducing it to 0.75 percent. Canada’s big banks reduced the five year mortgage interest rates to as low as 2.69 percent. Borderline buyers are now capable of qualifying for mortgages. No doubt demand will be even further inflamed, particularly if further rate cuts follow, as the Bank of Canada has indicated it will do if the impact of falling oil prices negatively impacts Canada’s economy and further stimulation is deemed necessary

Toronto Real Estate Market Update – November 2014

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

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

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

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

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

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

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

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

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