Toronto Real Estate Market Update April 2013

By any standards other than a comparison to April 2012, the Toronto residential resale market performed brilliantly this month. April 2012 was one of a string of months in the early part of last year that were on track to achieve record-breaking statistics. April 2013 will unfortunately be compared to last year, particularly by journalists, who only see the decline year-over-year, and not the absolute numbers achieved.

In April, 9,811 residential resale properties were reported sold. This is only a 2 percent decline compared to the 10,021 properties reported sold last year. As has been the case throughout 2013, the market remains disjointed with sales of various property types in various trading districts selling at practically light speed, with other property types finding some market resistance.

All properties in the greater Toronto area sold in only 23 days (on average). This is faster than the 24 days that sales took place in March. In February it took 28 days for properties to sell. The pace of sales, as well as the volume, has been accelerating as the year has progressed. In some trading districts the pace of sales was astounding. For example, all semi-detached properties in the eastern trading districts sold in a mere 10 days. All detached homes sold in only 15 days. Even in Toronto’s most expensive central districts all properties sold very quickly. Semi-detached houses sold in 16 days, and detached homes, which had an average sale price of $817,649, in only 18 days.

The drag on the market was the condominium apartment sector. In central Toronto, where more than 60 percent of all condominium apartments for sale are located, it took 31 days for sales to take place. Condominium apartments accounted for more than 30 percent of the entire greater Toronto inventory of properties available for sale in April.

Overall inventory levels are increasing as new listings come to market. In April 18,270 new listings were placed on the market by sellers, an increase of 10.9 percent over the 16,470 that became available last year. At the beginning of May there were 20,866 homes for sale in the greater Toronto area, an increase of 13.5 percent compared to 2012. There are now 2.9 months of inventory in the City of Toronto. Last year at this time inventory levels were at 2.2 months. Expect inventory levels to increase as the year unfolds. An increase in inventory levels may not impact the number or speed of sales, but it will definitely impact average sale prices, as we saw in April.

In April the average sale price increased to $526,335, one of the lowest year-over-year increases this year. April’s average sale price was only 2 percent more than the $515,888 achieved in 2012. This moderate average sale price increase was no doubt impacted by the still sluggish high-end market. In April 606 properties having a sale price of $1 Million or more were reported sold. In 2012 643 were sold, a decline of 6 percent.

A bright spot in the market was the increase in the average sale price for condominium apartments. Since condominium apartments account for such a large portion of the overall market, a decline in average sale prices will be negatively felt throughout the market. In April, however, the average sale price for condominium apartments in Toronto increased by 5.6 percent to $379,266. Unfortunately there was a 5.9 percent decline in the 905 region, but that marketplace accounts for much fewer sales than the City of Toronto.

The number of condominium apartment listings is higher than in 2012, but not the volume that was forecast. In April there were 4,755 condominium apartments for sale in Toronto (with 1,990 apartments in the 905 region). This is only an 8 percent increase compared to the same period in 2012. In the central districts, where most condominium apartments are to be found, there were 3,045 apartments available for sale. Last year there were 2,608, an increase of 17 percent year-over-year. 17 percent is not substantially higher than the 13.5 percent increase in listings in the greater Toronto area marketplace for all property types.

April finished strong, and there are no economic factors that would cause May to be any less active. Last May 10,545 properties were reported sold. That represented the peak of sales in 2012. Following May sales began to decline throughout the remainder of 2012. This year the opposite should occur with sales remaining strong, posting positive variances compared to 2012 to the end of the year.

Prepared by: Chris Kapches, Senior Vice President and Legal Counsel Chestnut Park properties in the Toronto area