In an announcement made by Toronto Real Estate Board President Mark McLean last week, GTA REALTORS® reported 7,385 home sales through TREB’s MLS® System in November 2015 – a 14 per cent increase compared to November 2014 and a record number for November sales to date.
Toronto’s real estate market saw 96,401 sales for the first eleven months of this year. There is no doubt that 2015 will go down in history as a year Toronto real estate made the record books. High housing prices, the number of homes sold, and benchmark indexes as well as a low number of active listings, average days on market and the amount of square footage you get for a dollar–not to mention the value of the Canadian Dollar itself. However, as the year winds down, people are turning their focus away from the red-hot real estate market and putting themselves in gear for the holiday season.
Credit: Toronto Real Estate Board
December is often an interesting month in for the Toronto real estate market–sometimes, buyers bid to get into the market right before the new year while other years they wait for the fresh listings that often arrive in January. Mr. McLean remains optimistic for December, as well as the upcoming year. With one more month to go until 2016, we’ve still managed to set a record in for home sales in the TREB market area for an entire calendar year (the previous record set in 2007 and reflected all 12 calendar months).
McLean believes the widespread demand for homeownership is a priority for families in the GTA and attributes it to real estate being the best long-term investment. Despite rumours of a housing crash, Toronto continues to prosper and doesn’t seem to show signs of stopping. The other question remains–if there is no crash, will there be a correction? Will the market get out of control?
The federal Department of Finance wants to step in and increase the minimum down payment for a home from 5 per cent to 10 per cent. With stiffer borrowing rules, the market has a better chance of cooling without a drastic crash. An increase will also alleviate the taxpayers exposure to insured default losses and possibly boost sales in the condo market. First time home buyers who are only prepared to put a 5 per cent down payment must either wait until they have twice the amount of money they initially had or settle for a condo. While all these pros sound fantastic for markets like Toronto and Vancouver, other markets in the Country, especially cities that have already experienced losses in the housing market, will suffer. When will these proposed changed come into effect? We can expect the Federal Department of Finance to present the motion for additional 5 per cent on down payments to the Minister of Finance as early as January 2016.
With what seems to be a very small window to decide whether to toss the whole idea of buying a home, borrowers looking to put a smaller down payment on a home should seek the advice of a mortgage professional and reassess their budgets realistically. Increase or not, the New Year is the perfect time for families to analyze their finances to ensure sound decisions in the future.
In an announcement made last week by Toronto Real Estate Board President Mark McClean, GTA home sales showed the best results on record to date. With 8,804 home sales reported through TREB’s MLS® system, October was a favourable month for Greater Toronto Area REALTORS®.
Additionally, The MLS® Home Price Index (HPI) Composite Benchmark was up by 10.3 per cent year over year in October. Over the same period, the average selling price for all home types combined was up by 7.3 per cent to $630,876. Price growth continued to be driven by the low-rise market segments.
Source: Toronto Real Estate Board
Although sales are robust and predicted to climb in the upcoming year, some believe that the province-wide municipal land transfer tax that the Wynne government plans to introduce could affect the market. When asked their opinions on the new tax, the vast majority of Ontario residents surveyed opposed it.
In mortgage-related news, Stats Canada released new data on the labour force, which showed improvement during the month of October. A total of 44,000 new jobs were created, the majority of which, however, were part-time. There was also a substantial increase in employment in the manufacturing sector, which shows hope for the state of our Loonie. If this trend continues, we could head toward a more sustainable economy. How does this all affect mortgage rates? It is predicted it is less likely that we will experience another cut in the Bank of Canada’s lending rate, and mortgage rates will eventually rise. Last week, five-year fixed mortgage rates increased across the board and range between 2.54% to 2.69%. There is no need to worry, as there is no sign of a significant spike, just a more optimistic outlook for our economy. Another contributing factor to a change in rates is what our neighbours to the south are planning—it’s a matter of time before their rates go up, and inevitably, we must follow suit.
In recent news, you may have heard rumours that buyers were “treading more cautiously” as they entered the fall market. The opposite couldn’t be truer in Toronto. This morning, Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported a record number of transactions for the month of September through TREB’s MLS® System. There were a combined 8,200 home sales reported for September 2015. This result was a 2.5 per cent increase compared to September 2014.
For the first nine months of 2015 TREB MLS® sales amounted to 80,331 — a record year-to-date figure. Furthermore, there was a 9.5 per cent increase compared to the first three quarters of 2014.
“We are on track for record home sales reported through TREB’s MLS® System this year. Barring a drastic shift in the economy over the next three months, total transactions reported by TREB Members in 2015 are expected to be at or near the 100,000 mark. This is a testament to the importance that GTA households put on home ownership as a long-term investment,” said Mr. McLean.
The MLS® Home Price Index (HPI) Composite Benchmark Price was up by 10.5 per cent year over year. The average selling price for all home types combined was also up by 9.2 per cent annually to $627,395. Growth in the MLS® HPI Composite Benchmark and the average price was driven by the low-rise market segments, including detached and semi-detached houses and townhouses. (October 5, 2015 –TREB)
New hope for buyers as supply of new listings in Toronto exceeds demand for the first time since January
In August, sellers continued to ride the wave of the GTA Housing Market, as Toronto home prices climbed 10 per cent. Last week, Toronto Real Estate Board President Mark McClean announced that GTA REALTORS® reported 7,998 residential sales through the TREB MLS® System for the month of August. In a year over year comparison, this figure represented a 5.7 increase compared to 7,568 sales reported in August 2014.
For the first time since January, the supply of new listings in Toronto exceeded the demand, however, active listings toward the end of August were still down compared to the same time last year. Although the increase in new listings is encouraging, it will likely take several months for the market to balance out. Until then, GTA housing market conditions remain in the seller’s favour.
“Buyers in the GTA remain confident in their ability to purchase and pay for a home over the long term. They see ownership housing as a quality investment that has historically produced positive returns while at the same time providing owners with a place to live in their chosen community,” said Mr. McLean.
Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up substantially in August compared to the same period in 2014, an increase of about 10 per cent in a year-over-year comparison.
(Source: Toronto Real Estate Board)
Market Bears anxiously await a bubble to burst, however, if the health of the city’s economy serves as any indicator, this “bubble” is nonexistent … and crash? Not likely. As for residential sales, we can expect them to slow in the upcoming months, however, they will remain hot compared to markets in other Canadian cities – with the exception of Vancouver of course.
What do cooler nights, Canada’s largest annual community event, The Canadian National exhibition and slowing housing sales all have in common? They are friendly reminders that summer is coming to an end. Maybe not the last one — not in the GTA at least.
Although the short season is winding down, the Toronto real estate market remains hot and it is expected that housing prices in one of Canada’s strongest markets will continue to increase for the rest of year. Supply for homes, particularly low-rise residential units is scarce in the city, unable to meet demand. This stark imbalance has caused the prices of homes to skyrocket to record numbers over the past year, making affordability for the average Torontonian further out of reach.
The condo market, however, is benefiting from low-rise scarcity as well as low-interest rates. Despite data released by the CMHC in the first quarter, stating the number of unsold Toronto condos was at a 21-year high, sales of high-rise units have actually increased significantly and as a whole in Toronto, have been very strong this year. The “pileup” of unsold inventory, which is a key factor in determining the health of the condo market, dropped 13 per cent in Q2 of 2015, in a year-over-year comparison according to a survey released last week by Urbanation, a condo research and development firm.
If you’re considering purchasing a condo, now’s the time to do it. Between baby boomers looking to downsize, and young professionals purchasing a less costly alternative to a house, Toronto condos are being snatched up – and quickly. Although the prices of condominiums have not faced the drastic spike in price as detached homes have, they will inevitably increase — as will mortgage rates. In Urbanation’s survey, it was also reported that prices for resale condos were up 6.8 per cent across the GTA in the second quarter, to an average of $453 per square foot, as sales spiked 21 per cent. Bidding wars have even started to affect condos, as larger units are becoming highly coveted among families and those interested in long-term ownership. The better supplied new condo sector, however, saw more moderate price increases of 2 per cent during the quarter, pushing the average price to $566 per square foot.
Owning real estate will remain one of the best investments you can make. Whether it’s a low-rise nest-egg or high-rise real estate investment unit with continual positive cash flow, the sooner you enter the marketplace, the sooner you benefit from the low mortgage rates, as well as the inevitable rise in housing prices.
Opinions will vary, and each individual is entitled to his or her own, however, when it comes to housing one has to consider the following: The health of a real estate market is closely related to local demographic and immigration needs.
56,000 condos At the end of 2014, there were more than 56,000 condos under construction in Toronto. That’s far more than what’s being built in other cities with a greater population like Chicago, Los Angeles, or New York. As a comparison, during most of the 1990s the city hovered around 10,000 condo starts.
Almost 3,000 unsold condo units In May, CMHC reported 2,837 unsold condo units. An all-time high, the closest we’ve come to that number was in the early 90’s when the condo market was out of control. Despite the high number of unsold units, sales for the fancy high-rise units continue to increase. Condo sales also help stabilize the market by offering an affordable entry point for first-time buyers.
$1 million average price In February Toronto reached a milestone that had previously only been reserved for some of the most expensive cities on the planet. The average price for a detached home in the city limits surpassed $1 million. In June, that number increased to $1.052 million. The increase in demand for luxury homes, namely houses sold at $3 million or more has contributed to this number. Buyers have not been discouraged by this, as bidding wars are still very common.
50% in five years In 2010 the average price for a Toronto property (including condos) was hovering around $430,000. In just five years, that average has rocketed up more than 50%, recently almost hitting $650,000.The last time the market moved that quickly was back in the late 1980s, with the average price hitting a peak of $273,000 in 1989. The average value didn’t top $270,000 again until 2004.
39,000 The number of sales in the Toronto market has more than tripled since hitting a low of 26,700 transactions in 1990, right after the 1989 bubble popped.That’s created a lot of jobs selling houses. According to the Toronto Real Estate Board, there are currently more than 39,000 realtors currently working in the city. That’s one realtor for every 140 residents.
8.9 times According to Statistics Canada, the average Toronto family earned $72,830 in 2013, the most recent year for which statistics are available. During May 2015, the average price of real estate in the city was $649,599. That puts the price-to-income ratio at an eye-popping 8.9 times, which is a record high.
Sources:
Canadian Mortgage and Housing Corporation http://www.cmhc-schl.gc.ca/
Canadian Newswire: http://www.newswire.ca
The Motley Fool: http://www.fool.ca
Toronto Real Estate Board: http://www.treb.net
GTA Real Estate Sales Soar, Toronto Luxury Real Estate Market Hottest in the World
Peak selling season is off to a great start in Toronto, and judging by April’s figures, we’re in for one hot summer. In an announcement made last week by Toronto Real Estate Board President Paul Etherington, GTA REALTORS® reported 11,303 sales through Toronto MLS®. This is an astounding 17 per cent increase in comparison to the same time last year. New listings were up five per cent—a modest number, however, still an increase compared to last year.
The overall average selling price of a GTA home was $635,932, up 10 percent in a year-over-year comparison. The MLS® Home Price Index (HPI) composite benchmark, which estimates the price of a benchmark home with the same attributes from one period to the next, was up by 8.4 per cent over the same period—although the HPI saw a healthy increase, it did not leep up with the growth of the overall average selling price.
Source: Toronto Real Estate Board
The margin supports the recent buzz regarding Toronto as the “Hottest Luxury Market” with a significant surge in higher-end houses being sold. Luxury homes in Toronto acquire their name when their list price exceeds $3 million USD.
The demand for low-rise homes in the city is not being met, withrare new listings being snatched up by eager homebuyers. According said Jason Mercer, TREB’s Director of Market Analysis “Demand for ownership housing was very high relative to the number of homes available for sale in April. This situation is not expected to change markedly as we move through the remainder of 2015. Until we experience a sustained period in which listings grow at a faster pace than sales, annual rates of home price growth will remain strong,”
There were increases in the condominium market as well, which unlike detached homes in the GTA, are more accessible to buyers. The high activity in the Toronto Real Estate Market, as well as in the GTA is proof that people still consider real estate as a dependable, long-term investment.
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Spring has finally sprung across the GTA and after weathering what seemed to be a winter without end, the Toronto housing market continues to heat up. Despite weakened market conditions in other Canadian cities, Toronto flexes its muscles as high-end home sales surge. With the average selling price for a detached home steadily increasing since it hit the $1 million mark in February, the deterioration of the Toronto real estate market is not in the foreseeable future.
According to an announcement made by Toronto Real Estate Board President Paul Etherington, Greater Toronto Area REALTORS® reported 8,940 sales last month — an 11 per cent increase compared to March, 2014. The average selling price for all reported transactions was $613,933 — representing a 10 per cent increase above reports recorded the same time last year. Overall, the number of home sales across the City of Toronto and the surrounding regions were greater than the numbers we saw in March 2014. Among these sales, detached homes led the pack last month with an increase of 15.9 per cent in a year-over-year comparison. Interest rates may be a contributing factor to increased sales, which might help compensate for record high prices, keeping affordability within reach.
New listings have also gone up, however, not as much as most would hope — seeing an increase of only 5.5 per cent compared to March of 2014, the shortage of houses for sale in Toronto brings competitive buying conditions. A lack of active listings combined with peak buying/selling season drawing near, hopeful homebuyers will have to roll up their sleeves and prepare for bidding wars, as market conditions will only get tighter.
Condominium and townhome sales have also gone up significantly, suggesting that Torontonians may be opting for more affordable entry-points into the real estate market. “… the number of buyers has more than kept up with the number of units available for sale. This is why we continued to experience above-inflation average price growth in the condo segment,” said Jason Mercer, TREB’s Director of Market Analysis. With low-rise detached homes becoming a rare commodity in the city, it may also suggest that people are choosing to purchase homes at their original listed price or lower, avoiding the bidding wars that are associated with detached homes.
Image source: Toronto Real Estate Board
Currently, the Toronto Real Estate Market can be summed up in a quote by economist Thomas Sowell,
“The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it.”
What does a million dollars buy you? In Toronto, it could buy you a detached home — if you’re lucky. Earlier this week the Toronto Real Estate Board released February’s resale market figures, and for the first time ever, the average selling price of a detached home exceeded the $1 million mark.
According to Toronto Real Estate Board President, Paul Etherington, Greater Toronto Area REALTORS® reported 6,338 home sales through the TorontoMLS system in February 2015 — an astounding 11.3 per cent increase in sales compared to February 2014. The overall average selling price for a home last month was $596,163 — up 7.8 per cent compared to February 2014. We can credit these robust numbers to the sales of detached homes, which contributed to over 16 per cent of total residential sales last month.
image from Toronto Real Estate Board — Greater Toronto Area REALTORS®
One thing that isn’t on the rise, however, is the number of active listings in the GTA. At the end of February 2015, the number was down 8.7 per cent compared to the same time last year. This, combined with record low mortgage rates is making competition between buyers increasingly tight, resulting in countless bidding wars across the GTA.
On the contrary, however, cities such as Calgary are experiencing a market correction. Despite Toronto’s streak of dominance, one can’t help but ask when we will face ours. Although opinions may vary, consider this — The Economist recently named Toronto as the best city to live in. Additionally, it attracts foreign investors, offers high paid employment, and is Canada’s financial, cultural and social hub. As long as we can maintain these as a city, the odds will remain in our favour.
The Toronto Housing market is still going strong, despite grim economic conditions in other parts of the country. According to TREB president Paul Etherington, Greater Toronto Area REALTORS® reported 3,120 home sales through the Toronto MLS system during the first two weeks of February. This is a 14.9 per cent increase compared to the same period last year. Additionally, there was a slight increase of new listings entered into the Toronto MLS system. Although it was only 3.5 per cent higher than last year’s number, it is still an improvement considering the lack of active listings in the GTA.
Toronto Housing Market Stastics
The average selling price of a home in Toronto was recorded at $602,110 for the first half of February. High housing costs don’t seem to faze buyers, however, as borrowing costs are at record lows. Borrowers also have more options as many small lenders are competing with Canada’s major banks; some offering 5-YR fixed rates as low as 2.5 per cent.
With the majority of buyers leaning toward low-rise purchases, including semi-detached and townhouses, the surge of ‘micro condos’ in the downtown core offer first time buyers a less expensive entry-point into the market.
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