Market Report

Toronto Real Estate Market Update September 2013

Since June the Toronto residential resale market place has outpaced sales achieved in the same month in 2012. September was no exception. September’s performance was very strong. 7,411 sales were reported for the month, far out-distancing the 5,687 sales reported in September 2012. This represents a 30 per cent increase. August’s increase, compared to August 2012, was 22 per cent.

These strong numbers are no doubt being driven by consumer concern over increasing mortgage interest rates. In the last few months rates have increased by more than 30 per cent. The fear is that rates will continue to rise throughout 2013 and into 2014. The strong performance by the Toronto area market place in part is an indication of buyers making buying decisions today that would otherwise have been made in 2014.

All property types showed very strong agains compared to the same period in 2012. In the City of Toronto detached home sales were up by 31.7 per cent, semi-detached by 13.3 per cent, townhomes by 18.3 per cent, and condominium apartments by 31.5 per cent. Similar data emerges from the 905 trading area.

It is not surprising that the average sale price continued to rise in September. The average sale price for all properties sold in the greater Toronto area was $533,797, an increase of 6.5 per cent compared to September 2012’s average sale price of $501,326. In the City of Toronto the average sale price was even higher, coming in at $571,410. Last year it was $547,901. Detached and semi-detached homes in the City of Toronto are the most expensive housing types. The average price for a detached house was $856,169 in September. Semi-detached homes were less expensive, but still pricey at $616,049. It is not surprising to see buyers rushing to take advantage of still low interest rates. Five year fixed mortgages are still available at 3.69 per cent, and in some instances as low as 3.59 per cent. The most expensive homes in Toronto are detached properties located in the central core of the city. The average price for a detached home in the central core was $1,397,683. Last September the same property sold for $1,224,940, an increase of more than 14 per cent.

Not only were a lot of sales achieved in September at higher average sale prices, but properties sold in very fast order. All properties (on average) that came to market in September in the entire greater Toronto area sold in 27 days, 2 day faster than last year. The speed of sales was even faster depending on housing type and location. Detached homes coming to market in September in the City of Toronto sold in 22 days. Semi-detached homes sold in an eye-popping 14 days. In Toronto’s central core they sold in only 11 days. This pace verges on frenzy. Only condominium apartment sales lagged behind other housing types. Condominium apartments took 36 days to sell, more than 30 per cent longer than the overall market pace. This pace is identical to the rate at which condominium apartments sold in September 2012.

Luxury home sales (properties having a sale price of $1 million or more) showed a marked improvement in September. In this price category 473 properties were reported sold. Of these properties 71 enjoyed a sale price in excess of $2 million. Last year only 343 luxury homes were reported sold in September, similar to the 334 reported sold in September 2011. Compared to last year luxury home sales increased by 38 per cent.

Unfortunately new housing product coming to market did not keep pace with sales. In September 14,938 new listings became available for sale, a decline of 1.3 per cent compared to last year. As a result of this decline, and compounded with the 7,411 sales that took place, active listings heading into October declined to 20,194. Last year there were 21,621, a decline of 6.6 per cent. These declines will only make buying conditions tighter, resulting in multiple bids for many properties that come to market in October.

Condominium apartment sales continue to surprise. Sales were up by 31.5 per cent compared to last year. However, unlike the overall market, average sale prices for the condominium apartments that sold declined by 3.7 per cent in the City of Toronto. It would appear that although sales numbers are up, the condominium apartments that sold were the least expensive units available to buyers. The average sale price for all condominium apartment properties was $363,149.

Looking forward market conditions are likely to remain unchanged in October and likely into November. Sales of properties in the greater Toronto area to date total 68,907. At the market’s current pace sales for the year should total about 86,000 properties. Slightly more than the 85,498 that sold in 2012.

Prepared by: Chris Kapches, President & CEO Chestnut Park Real Estate Limited, Brokerage