Average Price of Detached Home Now over $1 Million: TREB
Upward pressure on price due to dwindling demand continues to be the story of Toronto real estate in 2016, according to the Toronto Real Estate Board’s (TREB) Market Watch.
The standout statistic for most is the fact that a home anywhere in the GTA or Toronto now has an average price of $1,058,273 – officially pricing many out of this category. Indeed, the only price categories that would provide entry to a middle-class first time homebuyer are condo apartments in both the greater Toronto area and Toronto, and perhaps a townhouse in the Greater Toronto Area for solid dual-income households.
Inventory needs to go up: TREB
The Director for Market Analysis for TREB, Jason Mercer, shone a spotlight on the need to address demand in the Toronto real estate market.
“Recent policy initiatives seeking to address strong home price growth have focused on demand. Going forward, more emphasis needs to be placed on solutions to alleviate the lack of inventory for all home types, especially in the low-rise market segments,” he said.
Mortgage rules have no measurable impact
Despite the new mortgage rules and upward tick in prices, there was still brisk activity in November in terms of number of sales, with a strong showing especially in the condo and townhouse categories. While you would think that these lower-priced properties saw an uptick due to the new mortgage rules, the reality is that they’ve had these rates of increases throughout 2016 before the new rules were introduced in October. Additionally, the lack of inventory in the coveted detached and semi-detached property categories may have driven homebuyers into these categories.
What does this mean for landlords?
Get ready for an absolute deluge of renters, and higher quality ones at that. These renters will be the ones that may have moved into being homeowners just five years ago, but today simply can’t afford to climb the first rung of the property ladder. This new glut of renters on the market may signify an upward price pressure on your rental properties for 2017, although it’s too early to tell by how much you’ll be able to increase rents. It also means that you can start screening for more quality renters, so those with a blemish on the credit report can go into the “no” column where they would have been a “maybe” in the past if everything else checked out.
In this increasingly landlord-friendly market, it makes sense to hire a property management company who can manage the sensitive issues of price and screening for you. Contact Highgate today to find out what we can do for you.
For more information, see the TREB’s Market Watch for November.