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.

Collingwood/Southern Georgian Bar Real Estate Market Update – April 2015

As a REALTOR® it is to be expected that when you are out and about in the community and engaged in conversation whether it be at a local coffee shop, the grocery store, arena or golf course that at some point someone will say “How’s the market?” Quite simply put when asked about the month of April and the first four months of 2015 collectively it is hard not to reply with simple words like solid, robust and even hot. Especially, when these simple words are backed up with statistical evidence.

For the fourth consecutive month the real estate statistics as reported by the Southern Georgian Bay Association of REALTORS® (SGBAR) are strong. In several statistical categories the April figures for 2015 far outpace those reported a year ago both for the month of April and Year-To-Date (YTD) for 2014. In other categories April’s figures for this year are more in line with those reported at the end of May 2014 versus April 2014 giving further statistical merit to the strength of market year-to-date figures and the potential that 2015 could be a record breaking year statistically as it relates to real estate in the Southern Georgian Bay marketplace and more specifically the Western Region* if sales continue at the current pace.

As reported by SGBAR, sales for the Western Region for the month of April 2015 totalled 214 units, representing an 18% increase over the 182 unit sales reported for April 2014. YTD the total sales for the same region were reported at 631 units. This represented a 26% increase over the 502 unit sales reported for the first four months of 2014. This is further illustrated when the sales figures are broken out by price point for the Western Region.

The above chart clearly highlights two points. One, reasonable distribution of sales across all price points and secondly, positive percentage increases across all six price points including double digit percentage increases for five of the six price points.

The above statistics reflect price ranges across the region as a whole for all sales categories (residential, commercial, farm, vacant land etc.). However, in keeping with past reports the same positive picture is portrayed when we isolate the YTD single-family sales (from total sales) by sub-district within the Western Region. Specifically, the Town of Collingwood (22.5%), Clearview Township (25%), The Blue Mountains (25%) and the Town of Wasaga Beach (43.4%) all reported double-digit percentage increases for the total number of sales for the first four months of 2015 as compared to the same time period a year ago and both Grey Highlands and the Municipality of Meaford demonstrated modest growth with single digit growth at 9.5% and 2.7% respectfully. In addition, within these same six sub-districts each reported a positive percentage increase in the 12 month average sale price YTD. Grey Highlands leads the way with the largest YTD change over the same time last year with a 24.1% jump from $373,079.00 to $463,042.00. Of these six sub-districts The Blue Mountains has the highest 12 month average price at $577,327.00 up 3.8% from $556,131.00 for the same time a year ago. Again, all positive numbers across the board.

Although the above figures are impressive and together paint a positive picture as it relates to the market, the statistical numbers that jumped off the page this month were Total Sales Dollar Volume (TSDV) for the Month and YTD. As illustrated below the percentage increases for TSDV for the Month and YTD were impressive in their own right. However, what is more impressive is that the TSDV for the month of April ($72,094,774.00) is almost in line with the TSDV ($74,531,527.00) for the month of May 2014. Historically, the month of May and June have outpaced the month of April giving further statistical evidence that the spring market ahead is going to be even stronger than last year’s if current conditions persist.

Last month, we reported that March was the first month of 2015 to see an increase in new listings as compared to the same month a year earlier. April however, fell back in line with January and February of this year as we witnessed once again a decline in new listings as compared to the same month one year earlier. For the month of April 2015 there were 489 new listings a decline of 109 or -18% from the 598 new listings reported of the April 2014. YTD new listings for 2015 continue to lag behind those reported in 2014. For 2015 YTD there were a total of 1527 new listings down 248 listings or -14% from April 2014’s YTD reported number of 1775. Further the 1527 new listings reported YTD for 2015 are off by -21% as compared to the 1925 new listings reported YTD at the end of the first four months of 2013. At the end of April 2015 there were a total of 2489 active listings in the MLS® system for the Western Region up by 213 from the 2276 active listings reported at the end of March 2015.

Finally, when reviewing the Performance Record for the Western Region as provided by SGBAR, monthly sales to listings for April 2015 as a percentage was 43.76% as compared to 30.43% for April 2014. YTD the sales to listings ratio for 2015 was 41.32% compared to 28.28% for the same

time period in 2014. In previous months we have discussed and elaborated on the tightening of the market with a year over year decline in listings and year over year increase in sales. Perhaps no other statistic best demonstrates this point than this month’s YTD sales to listings ratio which at 41.32% handily surpasses the highest YTD ratio reported for 2014, which was in December at 36.89%.

As a postscript, Chestnut Park Real Estate Limited, Brokerage (“Chestnut Park”) is pleased to announce two milestones. First Chestnut Park has joined the REALTORS® Association Grey Bruce Owen Sound as a firm member and looks forward to serving the Grey Bruce marketplace. In addition, 2015 marks Chestnut Park’s 25th anniversary of service excellence within the real estate industry. Here’s to many more!

Prepared by: Keith Hull, Broker and Office Manager, Collingwood/Southern Georgian Bay & Richard Stewart, Vice-President & Legal Counsel at Chestnut Park Real Estate Limited, Brokerage

Prince Edward County Real Estate Market Update – April 2015

As predicted in our last report, things are definitely heating up in Prince Edward County (“the County”)! Not only have we finally experienced our first few sunny days of summer-like weather after what felt like an endless deep freeze, but the warmer temperatures are accompanied by an awakening of the real estate market, and properties of all kinds are starting to fly off the shelf.

Property sales across the broader Quinte & District Association of REALTORS® Inc. (“the Quinte Board”) have been strong throughout the first quarter of 2015, but April marks the first month in which the County has caught up with the robust property market that is being experienced across both the Quinte Board as well as Southern Ontario, generally. In fact April is also the first month this year in which the number of County real estate sales have surpassed those for the same month last year. The primary reason for both this drag on sales to date and the current expression of pent up demand built up over the preceding months can likely be attributed to the harsher than usual weather which has a disproportionate impact upon a more seasonally dependant market like the County.

According to the Enhanced Statistics Statistical Query Report for the County prepared by the Quinte Board, 56 properties were sold in April, 30% more than in April 2014 when only 43 properties were sold. This is remarkably consistent with sales activity across the Quinte Board which shows a 29% bump up in monthly sales year over year with 375 properties changing hands in April 2015 compared to 290 in the same month last year. In the County, year to date sales trail last year’s numbers only marginally now with 138 sales being reported thus far in 2015 compared to 142 last year at this time, a decline of only 3%. On the other hand, sales across the Quinte Board year to date amount to 933, 21% more than last year at this time when only 772 were reported sold. Total dollar volume across the Quinte Board has increased even more than unit sales both on a monthly as well as a year to date year over year basis with 34% and 25% increases, respectively. These numbers are consistent with the generally bullish conditions being experienced in neighbouring market places served by this Brokerage including Toronto, Muskoka and the Southern Georgian Bay areas.

Listings across the County, however are down somewhat with 201 new properties coming onto the market in April, 4 fewer and 2% less than last year when 205 new listings came out. Year to date comparisons, however, reveal a 4% gain in listings with a total of 593 and counting this year compared to 569 last year at this time. This increase in listings is directly mirrored in an identical 4% boost to property inventory in the County. The Enhanced Statistics Statistical Query Report shows 656 active listings at the end of April when the report was produced compared to 631 last year at this time.

A robust sales pace has brought the average days on market for properties sold in April in the County from 102 in April 2014 to 84 this past month. This amounts to an almost 17.5% reduction in the amount of time it took to sell the particular cross section of properties sold. Finally, and not surprisingly given what is happening and the strength of the market in both the County as well as much of Southern Ontario , the average sale price of properties sold in the County rose by 13.5% based on a comparison of average sale price last April ($268,782) and April 2015 ($305,173).

As the saying goes, spring has definitely sprung, from both a weather as well as real estate activity perspective. With hot selling conditions abounding in neighbouring and complementary markets there is little reason to think that the County will be left out in this regard. Lending conditions remain historically favourable for buyers, and economic prospects continue to look cautiously positive both domestically as well as south of the border. Barring any unforeseen disruptive events, most commentators, including the Bank of Canada downplay the likelihood of either a significant correction in, or derailing of the market. There is good reason therefore for buyers and sellers to be optimistic about real estate opportunities in the County this summer which continue to reflect excellent value and comparative affordability.

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 – December 2014

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

Toronto Real Estate Market Update – November 2014

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

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

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

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

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

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

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

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

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

Toronto Real Estate Market Update – September 2014

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

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

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

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

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

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

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

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

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