September 6, 2017 -- Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 6,357 home sales through TREB's MLS® System in August 2017. This result was down by 34.8 per cent compared to August 2016.
The number of new listings entered into TREB's MLS® System, at 11,523, was down by 6.7 per cent year-over-year and was at the lowest level for August since 2010.
"Recent reports suggest that economic conditions remain strong in the GTA. Positive economic news coupled with the slower pace of price growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular seasonal bump, as we move through the fall," continued Mr. Syrianos.
The average selling price for all home types combined was $732,292 – up by three per cent compared to August 2016. This growth was driven by the semi-detached, townhouse and condominium apartment market segments that continued to experience high single-digit or double digit year-over-year average price increases.
The MLS® Home Price Index composite benchmark, which accounts for typical home types throughout TREB's market area, was up by 14.3 per cent year-over-year in August. The fact that MLS® HPI growth outstripped average price growth, points to fewer high-end home sales this year compared to last.
"The relationship between sales and listings in the marketplace today suggests a balanced market. If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels," said Jason Mercer, TREB's Director of Market Analysis.
Market Continued to Adjust in July
August 3, 2017 -- Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 5,921 residential transactions through TREB's MLS® System in July 2017. This result was down by 40.4 per cent on a yearover- year basis, led by the detached market segment – both in the City of Toronto and surrounding regions.While sales were down, the number of new listings reported were only slightly (+5.1 per cent) above last year's level.
"A recent release from the Ontario government confirmed TREB's own research which found that foreign buyers represented a small proportion of overall home buying activity in the GTA. Clearly, the year-over-year decline we experienced in July had more to do with psychology, with would-be home buyers on the sidelines waiting to see how market conditions evolve," said Mr. Syrianos.
"Summer market statistics are often not the best indicators of housing market conditions. We generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home. As we move through the fall, we should start to get a better sense of the impacts of the Fair Housing Plan and higher borrowing costs," said TREB CEO John DiMichele.
The MLS® Home Price Index (HPI) Composite Benchmark price was up by 18 per cent on a year-over-year basis. However, the Composite Benchmark was down by 4.6 per cent relative to June. Monthly MLS® HPI declines were driven more so by single-family home types. The average selling price for all home types combined was up by five per cent year-over-year to $746,218.
"Home buyers benefited from more choice in the market this July compared to the same time last year. This was reflected in home prices and home price growth. Looking forward, if we do see some would-be home buyers move off the sidelines and back into the market without a similar increase in new listings, we could see some of this newfound choice erode. The recent changes in the sales and price trends have masked the fact that housing supply remains an issue in the GTA," said Jason Mercer, TREB's Director of Market Analysis.
Active Listings Increase in May
June 5, 2017 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 10,196 sales through TREB's MLS® System in May 2017 – down by 20.3 per cent compared to 12,790 sales reported in May 2016. Sales of detached homes were down by 26.3 per cent. Sales of condominium apartments were down by 6.4 per cent.
Active listings – the number of properties available for sale at the end of May – were up by 42.9 per cent compared to the lowest level in 15 years recorded in May 2016, but remained below the average and peak during that period. The number increased considerably for low-rise home types including detached and semi-detached houses and townhouses. Active listings for condominium apartments were down compared to May 2016.
"Home buyers definitely benefitted from a better supplied market in May, both in comparison to the same time last year and to the first four months of 2017. However, even with the robust increase in active listings, inventory levels remain low. At the end of May, we had less than two months of inventory. This is why we continued to see very strong annual rates of price growth, albeit lower than the peak growth rates earlier this year," said Mr. Cerqua.
Selling prices continued to increase strongly in May compared to the same month in 2016. The MLS® HPI Composite Benchmark price was up by 29 per cent year-over-year. The average selling price for all home types combined for the TREB Market Area as a whole was up by 14.9 per cent to $863,910. Year-over-year price increases were greater for condominium apartments compared to low-rise home types. This likely reflects the fact that the low-rise market segments benefitted most from the increase in listings.
"The actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen. In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out. On the listings front, the increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we've experienced over the past year by listing their home for sale to take advantage of these equity gains," said Jason Mercer, TREB's Director of Market Analysis
Strong Growth in New Listings in April
May 3, 2017 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® entered 33.6 per cent more new listings into TREB's MLS® System in April 2017, at 21,630, compared to the same month in 2016. New listings were up by double-digits for all low-rise home types, including detached and semi-detached houses and townhouses. New listings for condominium apartments were at the same level as last year
Total sales for the TREB market area as a whole amounted to 11,630 – down 3.2 per cent year-over-year. One issue underlying this decline was the fact that Easter fell in April in 2017 versus March in 2016, which resulted in fewer working days this year compared to last and, historically, most sales are entered into TREB's MLS® System on working days.
"The fact that we experienced extremely strong growth in new listings in April means that buyers benefitted from considerably more choice in the marketplace. It is too early to tell whether the increase in new listings was simply due to households reacting to the strong double-digit price growth reported over the past year or if some of the increase was also a reaction to the Ontario government's recently announced Fair Housing Plan," said Mr. Cerqua. The MLS® Home Price Index (HPI) Composite Benchmark Price was up by 31.7 per cent yearover- year in April 2017. Similarly, the average selling price for all home types combined was up by 24.5 per cent to $920,791.
"It was encouraging to see a very strong year-over-year increase in new listings. If new listings growth continues to outpace sales growth moving forward, we will start to see more balanced market conditions. It will likely take a number of months to unwind the substantial pent-up demand that has built over the past two years. Expect annual rates of price growth to remain well-above the rate of inflation as we move through the spring and summer months," said Jason Mercer, TREB's Director of Market Analysis.
Sales Up and Listings Down in February
March 3, 2017 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 8,014 residential sales through TREB's MLS® System in February 2017. Despite the fact that February 2016 had one more day due to the leap year day, this result was up on a year-over-year basis by 5.7 per cent compared to 7,583 sales reported last year.
"The February statistics tell me that many Greater Toronto Area households continue to view home ownership as a great long-term investment. The high demand for ownership housing we're seeing is broad-based, with strong sales growth for most low-rise home types and condominium apartments. This makes sense given the results of a recent consumer survey undertaken for TREB by Ipsos, which found an even split between intending first-time buyers and existing homeowners who indicated that they were planning on purchasing a home in 2017," said Cerqua.
While the demand for ownership housing grew over the past year, new listings entered into TREB's MLS® System in February were down on a year-over-year basis by 12.5 per cent to 9,834.
The MLS® HPI Composite Benchmark Price was up by 23.8 per cent compared to February 2016. Similarly, the average selling price was up by 27.7 per cent year-over-year to $875,983. Annual rates of price growth continued to be strongest for low-rise home types, particularly detached houses. Growth rates for condominium apartment prices were also in the double digits, likely a result of strong demand from first-time buyers.
"The listing supply crunch we are experiencing in the GTA has undoubtedly led to the doubledigit home price increases we are now experiencing on a sustained basis, both in the low-rise and high-rise market segments. Until we see a marked increase in the number of homes available for sale, expect very strong annual rates of price growth to continue," said Jason Mercer, TREB's Director of Market Analysis
Record Sales in 2016
January 5, 2017 -- Toronto Real Estate Board President Larry Cerqua announced that 2016 was a second consecutive record year for home sales. Greater Toronto Area REALTORS® reported 113,133 home sales through TREB's MLS® System – up by 11.8 per cent compared to 2015. The calendar year 2016 result included 5,338 sales in December – an annual increase of 8.6 per cent.
The strongest annual rate of sales growth in 2016 was experienced for condominium apartments followed by detached homes.
"A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the GTA, as the region's population continued to grow in 2016," said Mr. Cerqua.
The annual rate of growth for the MLS® Home Price Index (HPI) in the TREB market area accelerated throughout 2016 – from 10.7 per cent in January 2016 to 21 per cent in December 2016. The overall average selling price for calendar year 2016 was $729,922 – up 17.3 per cent compared to 2015. The pace of the annual rate of growth for the average selling price also picked up throughout the year, including a climb of 20 per cent in December.
"Price growth accelerated throughout 2016 as the supply of listings remained very constrained. Active listings at the end of December were at their lowest point in a decade-and-a-half. Total new listings for 2016 were down by almost four per cent. In 2016, we saw policy changes and policy debates pointed at the demand side of the market. If we want to see a sustained moderation in the pace of price growth, what we really need is more policy focus on issues impacting the lack of homes available for sale," said Jason Mercer, TREB's Director of Market Analysis.
DECEMBER 2016 TREB MID-MONTH STATISTICS
December 20, 2016 – Greater Toronto Area REALTORS® reported 3,196 home sales through TREB’s MLS® System during the first 14 days of December 2016. This result represented an increase of almost 18 per cent compared to the first two weeks of December 2015, when 2,713 home sales were reported. Broken down by market segment, the strongest annual growth in sales was experienced for condominium apartments – both for the City of Toronto and the surrounding regions. Double digit growth in detached home sales was also reported, but this was driven solely by sales outside of Toronto. Within the City of Toronto, sales were down for all low-rise home types – likely due to a lack of listings rather than a lack of demand. New listings reported by REALTORS® were down by 4.7 per cent year-over-year to 3,061. With sales up strongly and listings down, market conditions were tighter compared to a year earlier. Strong competition between home buyers continued to result in double-digit price increases. The average selling price for all home types combined was $741,515 during the first two weeks of December, representing a 19.3 per cent increase compared to a year earlier. Average annual rates of price growth generally remained strongest for low-rise home types, but the pace of condominium apartment price growth continued to accelerate.
NOVEMBER 2016 NUMBERS
The city of Toronto may be nation central when it comes to crazy bidding wars and $1-million homes, but, surprisingly, it's got a long way to go to be leader of the regional real estate pack.
York Region's average prices may lag those in the city, but it saw the biggest price gains, by far, across the GTA in September.
The average price of all housing types in York Region, which includes condos, semis and townhomes, was up a hefty 13.95%, and the price of detached house was up 14.73% in September compared to a year ago, according to figures released by the Toronto Real Estate Board.
The regional breakdowns are fascinating; they show that the highly sought-after City of Toronto, where house prices have doubled in a decade, is now lagging well behind most of its regional neighbors in price growth, although gains are still very strong.
In Toronto, single detached home prices were up 10.88% in September and all housing types up 8.62%.
October Home Sales Up Year-Over-Year
November 3, 2016 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported a record 9,768 sales through TREB's MLS® System in October 2016 – up by 11.5 per cent compared to October 2015. For the TREB market area as a whole, the largest annual rate of sales growth was in the condominium apartment market segment. Detached home sales were up by 10 per cent year-over-year, driven predominantly by transactions in the regions surrounding Toronto.
"The record pace of GTA home sales continued in October, with strong growth observed throughout the month. As we move through November and December, we will be watching the sales and listings trends closely, in light of the recent policy changes announced by the Federal Minister of Finance. TREB will once again be conducting consumer survey work, in order to report on home buying intentions for 2017," said Mr. Cerqua.
The MLS® Home Price Index Composite Benchmark was up by 19.7 per cent on a yearover- yeaThe MLS® Home Price Index Composite Benchmark was up by 19.7 per cent on a yearover- year basis in October 2016. Similarly, the average selling price for all home types combined was $762,975 – up 21.1 per cent over the same time period. Double-digit increases were experienced for all major home types for the TREB Market Area as a whole.
"New listings were up slightly in October compared to last year, but not nearly enough to offset the strong sales growth. This meant that seller's market conditions continued to prevail as buyers of all home types experienced intense competition in the marketplace. Until we experience sustained relief in the supply of listings, the potential for strong annual rates of price growth will persist, especially in the low-rise market segments," said Jason Mercer, TREB's Director of Market Analysis.
Four major changes to Canada’s housing rules
The Liberal government has announced sweeping changes aimed at ensuring Canadians aren’t taking on bigger mortgages than they can afford in an era of historically low interest rates.
The changes are also meant to address concerns related to foreign buyers who buy and flip Canadian homes.
Below is a breakdown of the four major changes Finance Minister Bill Morneau announced Monday.
The current rules
Buyers with a down payment of at least 5 per cent of the purchase price but less than 20 per cent must be backed by mortgage insurance. This protects the lender in the event that the home buyer defaults. These loans are known as “high loan-to-value” or “high ratio” mortgages.
In situations in which the buyer has 20 per cent or more for a down payment, the lender or borrower could obtain “low-ratio” insurance that covers 100 per cent of the loan in the event of a default.
Mortgage insurance in Canada is backed by the federal government through the Canada Mortgage and Housing Corp. Insurance is sold by the CMHC and two private insurers, Genworth Financial Mortgage Insurance Company Canada and Canada Guaranty Mortgage Insurance Company. The federal government backs the insurance offered by the two private-sector firms, subject to a 10-per-cent deductible.
Expanding a mortgage rate stress test to all insured mortgages.
What it is
As of Oct. 17, a stress test used for approving high-ratio mortgages will be applied to all new insured mortgages – including those where the buyer has more than 20 per cent for a down payment. The stress test is aimed at assuring the lender that the home buyer could still afford the mortgage if interest rates were to rise. The home buyer would need to qualify for a loan at the negotiated rate in the mortgage contract, but also at the Bank of Canada’s five-year fixed posted mortgage rate, which is an average of the posted rates of the big six banks in Canada. This rate is usually higher than what buyers can negotiate. As of Sept. 28, the posted rate was 4.64 per cent.
Other aspects of the stress test require that the home buyer will be spending no more than 39 per cent of income on home-carrying costs like mortgage payments, heat and taxes. Another measure called total debt service includes all other debt payments and the TDS ratio must not exceed 44 per cent.
Who it affects
This measure affects home buyers who have at least 20 per cent for a down payment but are seeking a mortgage that may stretch them too thin if interest rates were to rise. It also affects lenders seeking to buy government-backed insurance for low-ratio mortgages.
The government is responding to concerns that sharp rises in house prices in cities like Toronto and Vancouver could increase the risk of defaults in the future should mortgage rates rise.
As of Nov. 30, the government will impose new restrictions on when it will provide insurance for low-ratio mortgages.
What it is
The new rules restrict insurance for these types of mortgages based on new criteria, including that the amortization period must be 25 years or less, the purchase price is less than $1-million, the buyer has a credit score of 600 and the property will be owner-occupied.
Who it affects
This measure appears to be aimed at lowering the government’s exposure to residential mortgages for properties worth $1-million or more, a category of the market that has increased sharply in recent years in Vancouver and Toronto.
Vancouver and Toronto are the two real estate markets that are of most concern for policy makers at all levels of government. These measures appear to be targeted at those markets.
New reporting rules for the primary residence capital gains exemption.
What it is
Currently, any financial gain from selling your primary residence is tax-free and does not have to be reported as income. As of this tax year, the capital gains tax is still waived, but the sale of the primary residence must be reported at tax time to the Canada Revenue Agency.
Who it affects
Everyone who sells their primary residence will have a new obligation to report the sale to the CRA, however the change is aimed at preventing foreign buyers who buy and sell homes from claiming a primary residence tax exemption for which they are not entitled.
While officials say more data are needed, Ottawa is responding to extensive anecdotal evidence and media reports showing foreign investors are flipping homes in Canada and falsely claiming the primary residence exemption.
The government is launching consultations on lender risk sharing.
What it is
Currently, the federal government is on the hook to cover the cost of 100 per cent of an insured mortgage in the event of a default. The federal government says this is “unique” internationally and that it will be releasing a public consultation paper shortly on a proposal to have lenders, such as banks, take on some of that risk. The Department of Finance Canada acknowledges this would be “a significant structural change to Canada’s housing finance system.”
Who it affects
Mortgage lenders, such as banks, would have to take on added risk. This could potentially lead to higher mortgage rates for home buyers.
The federal government wants to limit its financial obligations in the event of widespread mortgage defaults. It also wants to encourage prudent lending practices.
Five previous federal housing moves since 2008
Monday’s package of announcements is the sixth time since the onset of the 2008 financial crisis that Ottawa has taken policy action in response to concerns about Canada’s housing market.
July, 2008: After briefly allowing the CMHC to insure high-ratio mortgages with a 40-year amortization period, then Conservative finance minister Jim Flaherty moved to tighten those rules by reducing the maximum length of an insured high-ratio mortgage to 35 years.
February, 2010: Responding to concern that some Canadians were borrowing too much against the rising value of their homes, the government lowered the maximum amount Canadians could borrow in refinancing their mortgages to 90 per cent of a home’s value, down from 95 per cent. The move also set a new 20-per-cent down payment requirement for government-backed mortgage insurance on properties purchased for speculation by an owner who does not live in the property.
January, 2011: The Conservative government under Stephen Harper tightened the rules further, dropping the maximum amortization period for a high-ratio insured mortgage to 30 years. The maximum amount Canadians could borrow via refinancing was further lowered to 85 per cent.
June, 2012: A third round of tightening brought the maximum amortization period down to 25 years for high-ratio insured mortgages. A new stress test was also introduced to ensure that debt costs are no more than 44 per cent of income for lenders seeking a high-ratio mortgage. Refinancing rules were also tightened for a third time, setting a new maximum loan of 80 per cent of a property’s value. Another new measure limited the availability of government-backed insured high-ratio mortgages to homes valued at less than $1-million.
December, 2015: The recently elected Liberal government moved to tighten lending rules for homes worth more than $500,000, saying it was focused on “pockets of risk” in the housing sector.
The package of measures included doubling the minimum down payment for insured high-ratio mortgages to 10 per cent from 5 per cent for the portion of a home’s value from $500,000 to $1-million
Sales Growth Continues in September
October 5, 2016 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 9,902 sales through TREB's MLS® System in September 2016. This result was up by 21.5 per cent compared to September 2015.For the region as a whole, strong annual rates of sales growth were experienced for all major home types. The pace of detached sales growth was slower in the City of Toronto and the number of semi-detached sales was down compared to last year. In both cases, the year-overyear dip in new listings was likely the issue.
"We continued to see strong demand for ownership housing up against a short supply of listings in the Greater Toronto Area in September. The sustained lack of inventory in many neighbourhoods across the GTA continued to underpin high rates of price growth for all home types," said Mr. Cerqua.
Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up strongly on a year-over-year basis in September. The MLS® HPI Composite Benchmark grew by 18 per cent compared to September 2015. The average selling price was up by 20.4 per cent to $755,755. It is important to remember that the MLS® HPI provides a price growth measure for a benchmark home, thereby allowing for an apples-toapples comparison from one year to the next. The average selling price can be influenced by changes in both market conditions and the mix of homes sold.
"The Toronto Real Estate Board will be closely monitoring how the recent changes to Federal mortgage lending guidelines and capital gains tax exemption rules impact the housing market in the Greater Toronto Area. While these changes are pointed at the demand for ownership housing, it is important to note that much of the upward pressure on home prices in the GTA has been based on the declining inventory of homes available for sale," said Jason Mercer, TREB's Director of Market Analysis.
Strong Sales & Price Growth in August
September 7, 2016 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported a record 9,813 sales through TREB's MLS® System in August 2016.While this sales result was 23.5 per cent above the number of transactions reported for August 2015, it is important to note that the majority of sales are reported on working days and there were two additional working days in August 2016 compared to 2015. When the year-over-year discrepancy in working days is accounted for, the annual percentage change in sales is closer to 13 per cent.
"The conditions underlying strong demand for ownership housing remained in place, including a relatively strong regional economy, growth in average earnings and low borrowing costs. Unfortunately, we did not see any relief on the listings front, with the number of new listings down compared to last year. This situation continued to underpin very strong home price growth, irrespective of home type or area," said Mr. Cerqua.
The MLS® Home Price Index (HPI) Composite Benchmark for August 2016 was up by 17.2 per cent on a year-over-year basis. Similarly, the average selling price for all home types combined was up by 17.7 per cent on an annual basis to $710,410. Both the MLS® HPI benchmarks and average prices for low-rise home types were up by double digits percentage-wise.
"Population in the GTA continues to grow. The resulting growth in households coupled with favorable economic conditions and low borrowing costs means that we remain on track for another record year for home sales. Against this backdrop, TREB will also be releasing new third-party research, and consumer and REALTOR® survey results throughout the fall and winter, with discussions focusing on foreign buying activity and issues affecting the supply of ownership housing," said Jason Mercer, TREB's Director of Market Analysis.
The best apps for home buyers, sellers and owners
The digital age has made life a lot easier when it comes to keeping yourself organized or doing research.
Whether its finding the perfect furnishings or keeping your expenses and household chores organized, apps make it fun and manageable. With so much digital content to guide you through these important life decisions, it can sometimes feel overwhelming. Let me share with you some of my favourite apps for those currently in the real estate market as well as for homeowners.
Buying and relocating
From your property search, through the moving process and getting to know your new neighbourhood, these apps may help make the transition that much easier and more enjoyable.
Walk Score (free) – This app, which shows the proximity of a given property to nearby amenities like schools, stores and entertainment could be especially handy for urban home buyers, as they tend to favour walkable neighbourhoods.
Photo Measures ($) – Think you may have found your dream home but not sure if your furniture will fit? Photo Measures allows you to note room dimensions on photos you take of a given room and might help to eliminate the guesswork out of buying, renovating and redecorating decisions.
REALTOR.ca (free) – With CREA’s REALTOR.ca app, prospective buyers and renters can quickly search a comprehensive list of property listings across the country.
Collaborate (Contact your TREB Member Realtor for access) – Collaborate is a new, cross-platform application that allows you to search properties across devices and communicate with your TREB Member Realtor in real time. Like a “Facebook of the MLS System,” it allows you to share, comment and like/dislike properties while sharing this info with your real estate professional.
Renovating and decorating
Whether you’re a happy homeowner or a motivated seller, these apps could help you make your home into a picture perfect oasis.
ColorSmart by Behr (free) – Ever wanted to do more than tack a paint chip on your wall to see if it “works”? This app allows you to take photos of your home and preview any Behr paint colour on all four walls before you buy!
Houzz (free) – Houzz gives you access to millions of images curated by design professionals, editors and savvy homeowners. You may never lack for décor or remodelling inspiration again.
iHandy Level (free) – Remodelling? Keep your angles in line and your projects on the straight and narrow with this free app. You’ll want to ensure you calibrate it first!
Chores and finances
These next apps sure could help in organizing your household maintenance schedule and financial commitments.
BrightNest (free) – Keep track of and learn how to tackle all your important home tasks with this app. It’ll give you easy-to-follow instructions and will allow you to create a personal schedule with helpful reminders.
Evernote (free) – This app is great for syncing your notes, online favourites, and to-do lists between your devices. It’ll allow you to keep your personal and professional projects in order and at a glance, no matter where you are.
BillMinder ($) – With this helpful app, you’ll be able to organize all your monthly payments, from mortgages to the cable bill, by their due date. The app will send you a reminder when due dates are close and will allow you to create customized charts and reports based on your finances.
And, of course, for the latest news on the GTA real estate market, you’ll want to follow TREB’s social media channels. Don’t forget to visit our blog,TREBwire.com and our website, TREBhome.com as well.
I hope you enjoy using some of these apps as much as I do, and I wish you luck with every phase of your home ownership journey!
Talk to a Toronto Real Estate Board Professional Member Realtor. For updates on the real estate market, visit TREBhome.com. If commercial property is what interests you, contact a TREB Commercial Professional Member Realtor by visiting trebcommercial.com.
TORONTO, July 6, 2016 -- Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 12,794 residential transactions through TREB’s MLS® System in June 2016. This result was 7.5 per cent higher than the 11,905 sales reported in June 2015. In line with the prevailing trend so far this year, the number of new listings was down by 3.8 per cent.
“As I start my term as TREB President, we are certainly in an interesting environment for ownership housing. There is no doubt that demand is at a record level, but would-be home buyers continue to face an uphill battle against a constrained supply of listings, which has perpetuated strong price growth. Buyers and sellers alike continue to benefit from the value a REALTOR® brings to a transaction,” said Mr. Cerqua.
“As the federal, provincial and local levels of government discuss housing policy in the coming months, issues affecting the lack of supply in the GTA should be of paramount importance. TREB will be undertaking, and making public, results of additional research in the second half of 2016, with the goal of proactively adding to the housing policy discussion,” added Mr. Cerqua.
The MLS® Home Price Index Composite Benchmark was up by 16 per cent on a year- over-year basis. The average selling price for all home types combined was up by a slightly higher annual rate of 16.8 per cent to $746,546. The single-detached, semi- detached and townhouse market segments led the way in terms of price growth.
“When TREB surveyed consumer intentions for 2016, we found that the majority of GTA households who were likely to purchase a home continued to be pointed towards some form of ground oriented housing. This is why we continue to see strong competition between buyers in many neighbourhoods where supply remains constrained,” said Jason Mercer, TREB’s Director of Market Analysis.
May 4, 2016 -- Toronto Real Estate Board President Mark McLean announced that there were 12,085 sales reported through TREB's MLS® System in April 2016. This result, which represented a record for the month of April, was up by 7.4 per cent in comparison to April 2015.
For the TREB market area as a whole, annual sales growth was experienced for all major home types except semi-detached houses. In the City of Toronto, sales were down for detached and semi-detached houses as well as townhouses on a year-over-year basis. This dip in sales in the '416' area code was due to a lack of low-rise listings. Many would-be buyers were not able to find a home that met their needs.
"While April's sales result represented a new record for sales, that number could have been even higher if we had benefitted from more supply. In the City of Toronto in particular, some households have chosen not to list their home for sale because of the second substantial Land Transfer Tax and associated administration fee. The lack of available inventory, coupled with record sales, continued to translate into robust annual rates of price growth," said Mr. McLean.
Home selling prices continued to trend upward in April. The MLS® Home Price Index Composite Benchmark was up by 12.6 per cent year-over-year. The average selling price was up by 16.2 per cent. The higher growth rate reported for the average home price, as compared to the MLS® HPI, points to a greater share of high-end home sales this year compared to last.
"As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher. A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced," said Jason Mercer, TREB's Director of Market Analysis.
Strong Growth in Home Sales in March/Q1
April 5, 2016 -- Toronto Real Estate Board President Mark McLean announced record TREB MLS® home sales for the first quarter of 2016 following a strong result for March transactions. There were 10,326 sales in March and 22,575 sales in the first quarter. The year-over-year growth rate for sales was 15.8 per cent for Q1 2016 and 16.2 per cent for March 2016. For the TREB market area as a whole, double-digit year-over-year rates of sales growth were experienced for all major home types during the first quarter.
The positive annual growth in sales was not mirrored on the listings front. The number of new listings entered into TREB's MLS® System during March and the first quarter were down compared to the same periods in 2015.
"At the beginning of 2016, TREB's outlook for the year pointed to a strong possibility of a second consecutive record year for home sales. This outlook was based, in part, on upbeat consumer survey results pointing to robust home buying intentions. It is clear that these upbeat intentions have translated into record first quarter results," said Mr. McLean.
The MLS® Home Price Index Composite Benchmark for March 2016 was up by 11.6 per cent compared to March 2015. The average selling price for all home types combined was up 12.1 per cent year-over-year in March and 13.6 per cent in the first quarter.
"Demand was clearly not an issue in the first three months of 2016, regardless of the housing market segment being considered. The supply of listings, however, continued to aggravate many would-be home buyers. We could have experienced even stronger sales growth were it not for the constrained supply of listings, especially in the low-rise market segments. The resulting strong competition between buyers has underpinned the double-digit rates of price growth experienced so far this year," said Jason Mercer, TREB's Director of Market Analysis.
The Toronto Real Estate Board says there were 7,621 sales in February, up from 6,294, an increase of 21.1 per cent
If you’re in the market for a single-family detached teardown complete with a gas stove, large manicured backyard and hardwood floors, Toronto may be the real estate market for you. Though it’s listed at $1.075 million, an ad for the Etobicoke bungalow currently on the market touts its premium lot and proximity to even more expensive, multimillion-dollar homes. Ideal for a family as is, but equally appealing for a developer, suggests the listing.A conditional offer is on the table. Single-detached homes are becoming a luxury item, especially for first-time buyers, say some analysts, as Toronto posted a record month for overall housing sales in February, according to the Toronto Real Estate Board. “Sales are off the charts,” said John Pasalis, a Toronto real estate broker with Realosophy. “The market is insanely competitive.” Buyers have been lining up 10 and 20 deep this winter to bid on a limited supply of their desired homes, he said.
David Fleming has worked in Toronto real estate for 12 years. What he’s seen so far this year is unprecedented, he said, calling January the “toughest market I’ve ever worked in for single-family homes.” “Every single house that comes out, even those that aren’t really worth it, end up with multiple offers,” he said. “So it’s a very difficult time to be a buyer and the good times continue to roll for the sellers.”
That’s with the average price of a detached home in Toronto coming in at $1,211,459 in February, according to TREB, up 16.3 per cent since this time last year. Overall, Toronto real estate is booming, with a record number of transactions last month, up 21.1 per cent compared with February 2015. Although supply ticked up in Toronto, with new listings rising 8.2 per cent, Fleming said the demand is insatiable. “There just aren’t enough people willing to move,” Fleming said. “People aren’t selling to rent, people aren’t selling to move out of the city, people aren’t selling to move overseas as much as might be necessitate to facilitate the overall demand,” he added. But with home prices in Toronto averaging $685,278, who is buying? “The positive thing is it’s actually home buyers rather than speculators or flippers,” Pasalis said.
In York Region, where the average home price is the highest in the GTA, at $859,589, realtor Ferro Payman with Remax Infinite is making a quarter of his deals with foreign buyers who are benefiting from the low Canadian dollar. Working primarily in Richmond Hill, Vaughan and Woodbridge, his Chinese, Iranian and Saudi clients mainly deal in U.S. dollars. “In their mind, they’re willing to spend $1 million, but when they convert the money and have it sitting in the bank, at this point they have $1.2 or $1.3 million,” he said. His foreign buyers include recent immigrants as well as non-residents purchasing homes for their children in Canada on temporary visas. “They see the growth of Canada, especially in Toronto. And when I show them the sales that have been happening over the past couple of years, they become very eager to purchase a house,” Payman said.
Despite designed to cool over-heated housing markets that kicked in last month, the numbers don't show much change so far. “We didn’t think it would be a game changer, and certainly the stats for February suggest that there was, at least in the initial stage, no impact whatsoever,” said Robert Hogue, a senior economist with RBC. In a recently released study of affordability, RBC found Toronto and Vancouver are outlives, with the rest of Canada escaping the buying bonanza. Though given the recent numbers, Hogue concedes the hot markets aren’t burning out. “We may say what we want about affordability, but it doesn’t look like it is a big restraint for buyers at this point,” Hogue said. “There’s no hard-and-fast rule for what’s affordable and what’s not affordable,” he said. “We only realize after a market crash or correction how unaffordable things had become.” The current situation could be vulnerable to a shock given levels of household debt, he said. “If something happened to the GTA economy that would cause the unemployment rate to surge, then the market would become vulnerable to a correction.” He cites a reasonably strong economy, robust job growth, and Ontario’s appeal to international and interprovincial migrants for stocking the real estate market with buyers. He conceded that detached houses, especially in Toronto and Vancouver, are becoming a luxury. “The more realistic ownership option for the average buyer, but especially for first-time buyers, is condominium apartments,” he said. Despite the competition, Fleming maintains the dream houses exist, citing pockets of semi-detached family homes in Toronto’s east side. “There’s a lot of homes out there, the difficulty is when you have 20 offers on a property, 19 people go home disappointed,” he said. “In terms of finding the house it’s not really difficult. It’s buying the house that’s difficult.”
Toronto Star Mar 03, 2016
Record February 2016 Sales
TORONTO, March 3, 2016 – Toronto Real Estate Board President Mark McLean announced Greater Toronto Area REALTORS® reported a record number of home sales through TREB’s MLS® System in February 2016. There were 7,621 transactions reported this past February – up 21.1 per cent compared to February 2015. The number of new listings entered into TREB’s MLS® System was also up on a year-over-year basis, but by a lesser 8.2 per cent. The fact that the annual rate of sales growth outstripped the annual rate of new listings growth shows a tightening of market conditions compared to last year. “Even after accounting for the leap year day, sales were above the previous record for February set back in 2010. Sales were up strongly from the 15th day of the month onward as well, despite the new federal mortgage lending guidelines coming into effect that require at least a 10 per cent down payment on the portion of purchase prices between $500,000 and $1,000,000,” said Mr. McLean. Seller’s market conditions continued throughout the GTA in February. Strong competition between buyers resulted in a healthy growth in selling prices. The MLS® Home Price Index (HPI) Composite Benchmark was up by 11.3 per cent year-overyear. The average selling price was up by 14.9 per cent annually to $685,278. “Recent polling conducted for TREB by Ipsos suggested that GTA households will remain upbeat about purchasing a home in 2016. Early sales results for January and February certainly support this view. With strong sales up against a constrained supply of listings, home prices continued to trend strongly upward.
Record TREB MLS® Home Sales in 2015
January 6, 2016 -- The second best sales result on record for December capped off a record year for TREB MLS® home sales in the GTA. Toronto Real Estate Board President Mark McLean announced that there were 4,945 sales reported in December bringing the 2015 calendar year total to 101,299 – a substantial 9.2 per cent increase compared to 2014 as a whole. Strong annual sales increases were experienced for all major home types last year.
"Home ownership is a quality long-term investment that families can live in while the value increases over time. A relatively strong regional economy in the GTA coupled with low borrowing costs kept a record number of households – first-time buyers and existing homeowners alike – confident in their ability to purchase and pay for a home over the long term," said Mr. McLean.
"If the market had benefitted from more listings, the 2015 sales total would have been greater. As it stands, we begin 2016 with a substantial amount of pent-up demand," continued Mr. McLean.
The average selling price for 2015 as a whole was $622,217 – up 9.8 per cent compared to $566,624 in 2014. The MLS® HPI Composite Benchmark Price was up by a similar annual rate of 10 per cent in December. GTA home price growth was driven by the low-rise segments of the market, but condominium apartment price growth was generally well-above the rate of inflation as well through 2015.
"TREB will release its official 2016 outlook later in January, but suffice to say that the demand for ownership housing is expected to remain very strong in 2016. Despite stricter mortgage lending guidelines and the possibility of slightly higher borrowing costs, on average, there will be many buyers who remain upbeat on the purchase of ownership housing," said Jason Mercer, TREB's Director of Market Analysis.
Sales & Average Price By Major Home Type December 2015
GTA sets new annual home sales record – in November
Some 7,385 houses and highrise condos changed hands in November, up 14 per cent year over year. The average sale price of a home climbed to $632,685, up 9.6 per cent from a year earlier.
Townhouse sales were up by 14.6 per cent across the GTA, bringing the average price to $549,649 in the city (up 9.1 per cent) and to $460,274 in the 905 regions (up 12 per cent.)
The GTA set a new record for home sales in November, catapulting the region to a new annual sales record — and there’s still a month of frantic house hunting to go before 2015 is even over.
Some 7,385 houses and highrise condos changed hands in November, up 14 per cent year over year, according to figures released by the Toronto Real Estate Board Thursday.
The average sale price of a home — stand-alone houses and condos combined — climbed to $632,685 in November, up 9.6 per cent from a year earlier, says TREB. The MLS composite benchmark price, which factors out sales at the extreme ends of the spectrum, climbed by 10.3 per cent.
That record November brought sales so far this year to 96,401 homes across the GTA — shattering the previous sales record of 93,193 for all of 2007, set before the recession knocked the steam out of Canada’s real estate market.
Since then, it’s been an unrelenting climb back, with bidding wars and bully bids now almost a given for stand-alone houses — and even some condos — across the sought-after City of Toronto and booming regions within a relatively easy commute of the core, such as York and Durham.
“Demand for ownership housing has remained strong in the GTA throughout 2015, with sales generally increasing at a greater annual rate compared to new listings,” said Jason Mercer, TREB’s director of market analysis, in a statement.
“This means that competition between buyers has strengthened in many neighbourhoods in the City of Toronto and surrounding regions. The end result has been upward pressure on home prices well above the rate of inflation in most cases.”
As has been the case since the recession, listings remain a major issue: There simply aren’t enough properties being listed for sale to keep up with demand as baby boomers opt to largely stay put in their family homes.
While new listings were up in November by 10.2 per cent — some 9,609 properties came up for sale last month compared to 8,716 in November of 2014 — the total number of homes for sale, known as “active listings,” were actually down 8.6 per cent over November of 2014, according to TREB.
Semi-detached homes lead the sales and price parade in November, with sales surging 18.3 per cent year over year, and prices up 11.8 per cent across the GTA as first-time buyers and condo dwellers looked for their best chance to break into the house market.
That brought the average price of a semi-detached house to $750,608 in the City of Toronto and $504,928 in the suburban 905 regions.
But condos more than held their own, as surging stand-alone house prices continue to skyrocket out of reach: Sales were up 16 per cent in November over a year earlier, making condos the second most-popular housing purchase last month next to semis.
The average sale price of a condo was up a healthy 5.4 per cent in the City of Toronto to $415,316 and up 1.5 per cent in the 905 regions to $315,223.
Townhouse sales were up by 14.6 per cent across the GTA, bringing the average price to $549,649 in the city (up 9.1 per cent) and to $460,274 in the 905 regions (up 12 per cent.) Detached houses in the City of Toronto maintained their firm foothold in the $1 million-plus range, with sales in the 416 region up just 0.7 per cent — likely reflecting the lack of supply and decreasing affordability.
Sales were up a whopping 18.5 per cent in the 905 regions, however, as more house hunters are finding themselves forced to drive further to find a detached house they can afford.
The average price of a detached house in the City of Toronto was $1.019 million in November, compared to $762,326 in the 905 regions.
While Toronto and Vancouver remain the standouts in the Canadian housing market, with prices and sales continuing to surge, the Canada Mortgage and Housing Corporation has predicted that things should moderate across the country over the next two years, based on an expected rise in the inventory of unsold homes, higher prices, mortgage rates and an increase in the supply of rental units.
Record Home Sales for October
November 5, 2015 -- Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 8,804 home sales through TREB's MLS® System in October 2015. This is the best result on record for the month of October.
"It is clear that many GTA households remain upbeat about home ownership because owning a home represents a high quality, long-term investment. We will see a big, new record this year for home sales reported through TREB's MLS® System," said Mr. McLean.
"Despite the record October result, I must point out that the Government of Ontario could hamper home sales in the near future. The Wynne government is seriously considering allowing municipalities throughout Ontario to institute a second land transfer tax on top of the existing provincial tax. Recent polling has shown that the great majority of Ontarians oppose this tax and would consider delaying a move if they were forced to bear the additional upfront cost," added Mr. McLean.
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.
"Record sales coupled with a constrained supply of listings in many GTA neighbourhoods has underpinned very strong price growth throughout 2015. Even if we do see a greater supply of low-rise listings in the marketplace over the next year, market conditions will remain tight enough to see continued price growth well-above the rate of inflation," said Jason Mercer, TREB's Director of Market Analysis.
Sales and Average Price Up in August
September 4, 2015 -- Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 7,998 residential transactions through the TREB MLS® System in August 2015. This result represented a 5.7 per cent increase compared to 7,568 sales reported in August 2014. On a GTA-wide basis, sales were up for all major home types.
The annual growth rate in new listings was greater than the annual growth rate in sales, but active listings at the end of August were still down compared to last year. This suggests that sellers' market conditions remained in place, especially where low-rise home types like singles, semis and townhouses were concerned.
"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, with both increasing by approximately 10 per cent year-over-year.
"A record year for home sales continued to unfold in August as competition between buyers exerted upward pressure on selling prices. It was encouraging to see annual growth in new listings outstrip annual growth in sales, but we will need to see this for a number of months before market conditions become more balanced," said Jason Mercer, TREB's Director of Market Analysis.
Record Sales and Strong Price Growth in June
July 7, 2015 -- Toronto Real Estate Board President Mark McLean announced that Greater Toronto Area REALTORS® reported 11,992 sales through TREB’s MLS® System in June 2015. This result represented a new record for the month of June and an 18.4 per cent increase over the June 2014 result of 10,132.
“As I begin my term as TREB President, I think it is important to point out that our region continues to grow in response to our diverse economic, ethnic and cultural bases. The GTA consistently receives international accolades as one of the best places in the world to live and do business. As the number of households grow, many of them will take advantage of the diversity of affordable home ownership opportunities that exist in Toronto and the surrounding areas,” said Mr. McLean.
Selling prices were up markedly on a year-over-year basis in June, for all major home types. The MLS® Home Price Index (HPI) Composite Benchmark was up by 8.9 per cent in comparison to June 2014. The average selling price was up by 12.3 per cent over the same period to $639,184.
High-end homes have accounted for a greater share of overall transactions this year compared to last year. This is the key reason why the average selling price has increased at a greater annual rate than the MLS® HPI Composite Benchmark.
“It is encouraging to see that new listings have edged upward so far this year, as homeowners have reacted to strong home price growth and have looked to take advantage of increased equity in their homes. However, the annual rate of sales growth continues to far outstrip listings growth, which means that there remains a lot of willing buyers in the marketplace who haven’t found a home that meets their needs. As long as this situation persists, expect home prices to trend strongly upward,” said Jason Mercer, TREB’s Director of Market Analysis.
A New Sales Record for the Month of May
June 3, 2015 -- Toronto Real Estate Board President Paul Etherington announced 11,706 sales reported by Greater Toronto REALTORS® in May 2015. This result was up by 6.3 per cent in comparison to 11,013 sales reported in May 2014. For the TREB market area as a whole, sales were up for all major housing types. However, in the City of Toronto, where the supply of low-rise listings has been constrained, sales were down for detached homes.
“During my tenure as TREB President over the past year, it is clear to me that ownership housing remains top of mind as a quality long-term investment for GTA households. This is why, despite a shortage of listings in some market segments, we experienced a record number of sales reported through TREB’s MLS® System for the month of May,” said Mr. Etherington.
Record May transactions, coupled with a dip in the number of homes available for sale, resulted in strong price growth. The MLS® Home Price Index (HPI) Composite Benchmark was up by 8.9 per cent year over year in May. The MLS® HPI uses benchmark homes to estimate price growth. This allows for an “apples to apples” comparison of price growth that is not affected by changes in the mix of sales activity.
The average selling price for all home types combined in May 2015 was up by 11 per cent annually to $649,599. The higher annual rate of average price growth compared to the MLS® HPI Composite Benchmark points to the fact that the proportion of high-end home sales continued to be greater compared to 2014.
“Tight market conditions, especially for singles, semis and town homes in the GTA, have resulted in strong price growth regardless of the price metric being considered. With no relief so far on the listings front, expect similar rates of price growth as we move through the remainder of 2015. At this point, a number of months where listings growth outstrips sales growth would be required to satisfy pent-up demand,” said Jason Mercer, TREB’s Director of Market Analysis.
Sales and Price Up Year-Over-Year in March 2015
April 7, 2015 -- Toronto Real Estate Board President Paul Etherington announced that Greater Toronto Area REALTORS® reported 8,940 sales in March 2015. This result represented an 11 per cent increase compared to March 2014. Sales were up for most major home types, both in the City of Toronto and the surrounding regions. New listings were also up, but by a lesser 5.5 per cent, indicating tighter market conditions.
“Home sales increased compared to last year as the cost of home ownership remained affordable, with lower interest rates going a long way to mitigate the effect of rising home prices. However, a substantial amount of pent-up demand remains in place, especially as it relates to low-rise market segments. This suggests that strong competition between buyers, which has fuelled strong price growth so far this year, will continue to be experienced throughout the spring,” said Mr. Etherington.
In March, the average selling price for all reported transactions was $613,933 – up 10 per cent year-over-year. The MLS® HPI Composite Index, which tracks benchmark homes with the same attributes from one period to the next, was up by 7.9 per cent. Average price growth was strongest for detached homes in the City of Toronto, at 15.9 per cent. Over the same period the detached MLS® HPI in the '416' area code increased 7.8 per cent.
The MLS® HPI provides a clear indication of price growth due to market forces - the relationship between demand and supply. Comparing MLS® HPI growth to average price growth provides a sense of the changing mix of home types sold from one period to the next.
"It is clear that seller's market conditions in many parts of the GTA are driving price growth. However, looking at the detached market segment in the City of Toronto in particular, growth in the average selling price outstripped growth in the MLS® HPI. This points to the fact that the mix of detached homes sold this year compared to last has shifted towards more expensive properties," said Jason Mercer, TREB's Director of Market Analysis.
Average price tops $1M for detached Toronto homes
February was a milestone month for the Toronto real estate market.
The average price for a detached home in the 416 area was more than $1 million in February, the Toronto Real Estate Board (TREB) said on Wednesday, which is a year-over-year increase of almost nine per cent.
This is the first time the price has been that high for a calendar month.
“Even with the record low temperatures last month, we still saw an increase in the number of people purchasing homes in the GTA,” TREB president Paul Etherington said in a release.
“This speaks to the importance households place on home ownership and the fact that buyers continue to view ownership housing as a quality long-term investment in which they can live.”
It’s likely not a coincidence that after a drop in mortgage rates in February, following the Bank of Canada’s surprise 0.75 per cent interest rate reduction, that the real estate market had a busy February.
The Toronto Real Estate Board’s monthly update shows 6,338 sales in the GTA, which is up by a substantial 11.3 per cent compared to a year ago.
Buyers found fewer ‘for sale’ signs on front lawns, and the supply of homes available was down by 8.7 per cent by the end of February, leading to more buyer competition.
The entire GTA was strong, with the average home price selling for $596,163 — up 7.8 per cent compared to February of 2014, driven by the detached home market.
“The strong year-over-year price growth we experienced in February points to the robust demand for ownership housing in the GTA,” Jason Mercer, a director at TREB, said.
Condo sales activity jumped 10 per cent, with the average price in the GTA at $355,623.
By Mike Eppel and Toronto staff
Strong Start to 2015
February 4, 2015 -- Toronto Real Estate Board President Paul Etherington announced a strong start to 2015, with robust year-over-year sales and average price growth in January. Greater Toronto Area REALTORS® reported 4,355 home sales through the TorontoMLS system during the first month of the year. This result represented a 6.1 per cent increase over January 2014. During the same period, new listings were up by 9.5 per cent."The January results represented good news on multiple fronts. First, strong sales growth suggests home buyers continue to see housing as a quality long-term investment, despite the recent period of economic uncertainty. Second, the fact that new listings grew at a faster pace than sales suggests that it has become easier for some people to find a home that meets their needs," said Mr. Etherington.
The average selling price for January 2015 home sales was up by 4.9 per cent year-overyear to $552,575. The MLS® Home Price Index (HPI) Composite benchmark was up by 7.5 percent compared to January 2014.
"Home price growth is forecast to continue in 2015. Lower borrowing costs will largely mitigate price growth this year, which means affordability will remain in check. The strongest rates of price growth will be experienced for low-rise home types, including singles, semis and town houses. However, robust end-user demand for condo apartments will result in above-inflation price growth in the high-rise segment as well," said Jason Mercer, TREB's Director of Market Analysis.
January 27, 2015
Home Prices To Fall In 8 Provinces Amid 'Sharp Widening' Of Canada's Economic Gap: TD Bank
Home Prices To Fall In 8 Provinces Amid 'Sharp Widening' Of Canada's Economic Gap: TD Bank
TD Bank sees house prices coming down in all but Canada’s two hottest markets this year, with falling oil prices taking an especially large bite out of the housing markets in energy producing regions.
Only Ontario and British Columbia — propelled by the seemingly perennially hot housing markets in Toronto and Vancouver — will avoid falling prices and sales in 2015, the bank forecast. The bank sees house prices rising 3.1 per cent in Ontario this year, and 2.9 per cent in B.C.
“However, decreases in affordability tied in part to further gains in home prices over 2014 will likely act as a growing headwind in markets in Ontario and B.C.,” the bank noted.
The strength of Toronto and Vancouver will help pull average house prices up for the year, by a relatively small 1.6 per cent, but overall home sales across Canada are expected to fall 1.7 per cent this year.
The worst of it will be felt in the economies that, in recent years, have benefitted most from what used to be high oil prices — Alberta, Saskatchewan and Newfoundland.
TD bank sees home sales plunging by more than 20 per cent in Alberta this year, with prices falling 3.5 per cent. Saskatchewan will see sales drop 6.7 per cent and prices fall three per cent.
The report sees “signs of extreme weakness in the housing market” in the province, despite its more-diverse economy when compared to Alberta.
Oil Producers Will Have Slowest Economies
TD Bank predicts “a sharp widening in economic performance” between the three oil-producing provinces and the rest of Canada.
That’s good news for Ontario, which the bank says will lead economic growth in Canada this year and next, with GDP growing 2.8 per cent in 2015 and 2.5 per cent in 2016.
With lower energy costs for manufacturers and a lower loonie making exports more competitive, “Ontario ... is particularly well-positioned to benefit,” the bank writes.
TD predicts Alberta, Saskatchewan and Newfoundland will see the slowest economic growth among Canadian provinces, with Newfoundland’s economy outright shrinking by 1.1 per cent over the course of 2015 and 2016.
Alberta’s economy is “projected to grind to a virtual standstill” this year, with GDP growing a paltry 0.5 per cent and then some bounce-back to 1.8-per-cent GDP growth in 2016. Still, that is a much slower pace than Alberta had seen in recent years.
The TD report notes that government spending in Alberta will also be a drag on its economy, as the province grapples with a multi-billion-dollar budget hole from lower oil revenues.
Bank of Canada slashes key interest rate to limit impact of sagging oil prices
OTTAWA -- The looming threat of sliding oil prices forced the Bank of Canada to drop its trend-setting interest rate Wednesday, a surprising move that shows just how much the country's economic outlook has soured in a matter of months.
The central bank, which nudged its key rate down to 0.75 per cent from one per cent, said the rapid oil-price collapse has created many unknowns around economic growth in the oil-exporting nation.
Until the effects of oil's late-2014 tailspin started to trickle through, Canada appeared to be on the cusp of a promising post-recession rebound -- and inching closer to a rate hike.
The Bank of Canada is seen in Ottawa on Sept. 6, 2011. (The Canadian Press/Sean Kilpatrick) "The drop in oil prices is unambiguously negative for the Canadian economy," governor Stephen Poloz said. "Canada's income from oil exports will be reduced, and investment and employment in the energy sector are already being cut."
The central banker noted there will be some offsets, but said they will be partial and of uncertain timing. "Canadian consumers will spend less on energy, but they could save some of the windfall rather than spend it; U.S. economic growth will be stronger, which -- along with a lower Canadian dollar -- should boost Canadian exports, but the speed of the export response is uncertain given the export capacity losses of the last decade," Poloz said.
The loonie dropped after the announcement by 1.12 cents US to 81.48 cents US -- its lowest level since late April 2009, the last time the bank cut its overnight rate.
The decision Wednesday marked the first time the rate budged at all since September 2010 when the central bank raised it by a quarter point to one per cent.
The Bank of Canada was widely expected to once again stand pat on its rate Wednesday, with most economists projecting an increase in late 2015 or early 2016.The central bank, however, predicts the impact of falling oil prices to overshadow encouraging signs of economic life spotted outside the weakening energy sector, such as rising foreign demand, a boost in exports and job growth."The oil-price shock is occurring against a backdrop of solid and more broadly based growth in Canada in recent quarters," the bank said."While business investment had been showing some encouraging signs in the third quarter of 2014, the near-term outlook appears much-less positive." The bank also said the oil-price drop will have an adverse effect on income and wealth, which would reduce the growth of domestic demand. It also expected additional negatives on consumption and public finances.The rate decrease aims to soften the blow of cheaper crude by providing "insurance" against risks posed by low oil to the country's inflation and its financial stability. It predicted Canada's fortunes to also receive a boost from the ever-strengthening U.S. economy, an country expected to benefit from lower crude prices. The bank's concerns over the oil slump come as some Canadian industries reel from the sharp plunge in crude prices, which are down more than 55 per cent since June. The decline in oil prices is also expected to shave billions of dollars from the bottom lines of federal and provincial governments. Last week, the federal government took the rare step of delaying the budget until at least April, so it could assess the effect of tumbling crude.
In November, federal Finance Minister Joe Oliver warned falling oil prices could cut $2.5 billion per year from the federal books between 2015 and 2019. Since that calculation, the price of crude has tumbled even further, from about US$80 per barrel to under US$50. Experts believe the federal books for 2015-16 will come close to running another deficit, despite the Harper government's assertions it will deliver on its long-held vow to balance the budget. An analysis Tuesday by the Conference Board of Canada predicted plummeting world oil prices to gnaw $4.3 billion from the Canadian government's 2015 income and deliver a nearly $10-billion hit to the provinces in royalties and tax revenue. In the monetary policy report Wednesday, the central bank predicted the country's headline inflation rate to temporarily dip to one per cent -- below the bank's target range -- before climbing back up to two per cent in the second half of the year. The central bank also highlighted persistent problems in Canada's labour market, where it found long-term unemployment was still close to its "post-crisis peak." It said average hours worked remained low and the proportion of people who could only find part-time work was still high.
The bank predicted the pace of Canada's economic growth -- measured by the real gross domestic product -- to slow to roughly 1.5 per cent in the first half of 2015 and for the output gap to widen. It projected the Canadian economy to gather steam in the second half of the year, allowing real GDP growth to average 2.1 per cent in 2015 and 2.4 per cent in 2016. The bank's estimates were based on oil prices of US$60 per barrel, which is higher than current prices that are below US$50. The report said if oil were to remain close to US$50, real GDP growth would dip to 1.25 per cent in the first half of 2015. In its last monetary policy report -- in October -- the Bank of Canada predicted 2.4 per cent growth for 2015. Since then, oil prices have dropped by more than 40 per cent. In his October report, Poloz warned the extended period of an already-low interest rate of one per cent had propelled consumer spending to near-record-high housing prices and debt. At the time, Poloz cautioned the low-rate environment had left Canadian households exposed to economic shocks. On Wednesday, the bank reiterated the warning that Canada's indebted households remained vulnerable. A fresh unknown -- the oil collapse -- has now been added to the mix. "The precise magnitude of the impact of the fall in oil prices on household income, spending and, ultimately, on existing imbalances is highly uncertain," said the report, which still maintained its prediction of a soft landing for the housing market.
The Bank of Canada is scheduled to make its next interest-rate announcement March 4, while its next monetary policy report is due April 15.
CP24 Jan 21, 2015
January 7, 2015
December 2014, property sales in GTA close to setting record, despite listings shortage
TORONTO, January 7, 2015 - Toronto Real Estate Board President Paul Etherington announced that Greater Toronto REALTORS® reported 92,867 residential sales through the TorontoMLS system in 2014, including 4,446 in December. The calendar year 2014 sales result represented a 6.7 per cent increase over the 2013 sales figure of 87,049 and was just short of the record set in 2007. "TREB's 2014 sales figures are a testament to the importance Greater Toronto Area households continue to place on home ownership. GTA households realize that home purchases have been a quality long-term investment. While home prices certainly increased substantially in 2014, the purchase of an average priced home remained affordable, in terms of the average household's ability to comfortably cover their monthly mortgage payments," said Mr. Etherington. The average selling price continued to grow on a year-over-year basis in calendar year 2014, with an 8.4 per cent increase over calendar year 2013 to $566,726. This included a seven per cent increase in the December 2014 average selling price to $556,602. Throughout 2014, annual increases in the average selling price and the MLS® HPI Composite Benchmark were consistently reported on a monthly basis for most market segments, from detached homes through to condominium apartments. "The strong price growth we experienced in 2014 can be explained with two words: listings shortage. The constrained supply of listings was especially evident for low-rise home types like singles, semis and town houses. The number of households looking to purchase these home types increased, while the number of homes from which they could choose decreased. This situation resulted in more competition between buyers and more aggressive offers," said Jason Mercer, TREB's Director of Market Analysis.
In fairness, the year’s strong sales can also be explained with three more words: low interest rates.
Those continue to drive sales but remain a wild card for 2015. Housing observers expect rates could start to climb, albeit most likely slowly, later this year.
Some realtors are already predicting a bit of cooling, regardless of rates, simply because of the listings shortages: More people seem to be staying put and opting to do renovations, considering the high costs of moving – Toronto’s double land-transfer tax, real estate and other fees – and the challenges of finding a new place without getting into bidding wars, which have now extended beyond coveted Toronto neighbourhoods and into some 905 areas.
The steepest price growth – up 8.3 per cent in December, year over year – was in the townhouse sector, as more buyers find themselves priced out of detached homes, which now average $738,334 across the GTA and $934,039 in the highly sought after City of Toronto, according to TREB’s figures. The average sales price of a detached home in the 905 regions was $668,063 in December, up 6.6 per cent year over year.
Condos weren’t far behind. Prices were up 5.4 per cent in the City of Toronto, to an average of $387,612. That compared to average prices of $300,352 in the 905 regions, up 2.2 per cent from December of 2013.
Townhouses, by comparison, now average $434,181 across the GTA and $474,874 in the City of Toronto, making them the most affordable housing type left in the region, next to condos. The average sale price in the 905 regions was $420,105. Sales were up 4.3 per cent.
According to TREB’s figures for December sales, detached house sales were up 9.7 per cent over the same period last year.
Semi-detached sales were up 12.9 per cent. The average price of a semi in Toronto was $615,794 in the 416 region and $451,314 in the 905 regions, says TREB.
Sales & Price Growth Continue in November
December 4, 2014 -- Toronto Real Estate Board President Paul Etherington announced that Greater Toronto REALTORS® reported 6,519 residential transactions through the TorontoMLS system in November 2014. This result was up by 2.6 per cent compared to 6,354 sales reported in November 2013. Through the first 11 months of 2014, total sales amounted to 88,462 - up 6.6 per cent compared to the same period in 2013.
While the trend of year-over-year sales growth continued, the supply of listings remained constrained, with active listings at the end of November down in comparison to last year.
"Even with a constrained supply of homes for sale in many parts of the Greater Toronto Area, buyers continued to get deals done last month. Households remain upbeat about home ownership because monthly mortgage payments remain affordable relative to accepted lending standards. This is coupled with the fact that housing has proven to be a quality long-term investment," stated Mr. Etherington.
The average selling price for November transactions was up by 7.4 per cent year-over-year to $577,936. The year-to-date average price was up by 8.4 per cent to $567,198. The MLS(R) Home Price Index Composite Benchmark price for November was up by 7.7 per cent compared to a year earlier.
"The robust average price growth experienced throughout 2014 has been fundamentally sound, with demand high relative to supply. Strong competition between buyers has exerted upward pressure on selling prices. Barring a substantial shift in the relationship between sales and listings in the GTA, price growth is expected to continue through 2015," said Jason Mercer, TREB's Director of Market Analysis.
In fairness, the year’s strong sales can also be explained with three more words: low interest rates. Those continue to drive sales but remain a wild card for 2015. Housing observers expect rates could start to climb, albeit most likely slowly, later this year. Some realtors are already predicting a bit of cooling, regardless of rates, simply because of the listings shortages: More people seem to be staying put and opting to do renovations, considering the high costs of moving – Toronto’s double land-transfer tax, real estate and other fees – and the challenges of finding a new place without getting into bidding wars, which have now extended beyond coveted Toronto neighbourhoods and into some 905 areas.
The steepest price growth – up 8.3 per cent in December, year over year – was in the townhouse sector, as more buyers find themselves priced out of detached homes, which now average $738,334 across the GTA and $934,039 in the highly sought after City of Toronto, according to TREB’s figures. The average sales price of a detached home in the 905 regions was $668,063 in December, up 6.6 per cent year over year. Condos weren’t far behind. Prices were up 5.4 per cent in the City of Toronto, to an average of $387,612. That compared to average prices of $300,352 in the 905 regions, up 2.2 per cent from December of 2013. Townhouses, by comparison, now average $434,181 across the GTA and $474,874 in the City of Toronto, making them the most affordable housing type left in the region, next to condos. The average sale price in the 905 regions was $420,105. Sales were up 4.3 per cent. According to TREB’s figures for December sales, detached house sales were up 9.7 per cent over the same period last year. Semi-detached sales were up 12.9 per cent. The average price of a semi in Toronto was $615,794 in the 416 region and $451,314 in the 905 regions, says TREB.
October 2014 Sales & Average Price Up Year-Over-Year
November 5, 2014 -- Toronto Real Estate Board President Paul Etherington announced that Greater Toronto Area REALTORS® reported 8,552 sales through the TorontoMLS system in October 2014. This result represented an increase of 7.7 per cent compared to October 2013. New listings were also up on a year-over-year basis, but by a lesser 3.4 per cent.
“Strong growth in sales was evident across all major home types during the first full month of fall. This suggests that there are a lot of households across the Greater Toronto Area who remain upbeat about the benefits of home ownership over the long term, whether we’re talking about first-time buyers or existing home owners looking to change their housing situation,” said Mr. Etherington.
The average selling price for October 2014 transactions was $587,505 – up 8.9 per cent compared to the average of $539,286 reported for October 2013. The MLS® HPI composite benchmark price was up by 8.3 per cent over the same period. Low-rise home types, including singles, semis and town houses, continued to be the driver of year-over-year growth in the average price and the MLS® HPI composite benchmark.
“While sales growth has tracked strongly so far this fall, many would-be home buyers have continued to have difficulties finding a home due to the constrained supply of listings in some parts of the Greater Toronto Area, particularly where low-rise home types are concerned. The resulting sellers’ market conditions are forecast to drive strong price growth through the remainder of 2014 and indeed into 2015 as well,” said Jason Mercer, TREB’s Director of Market Analysis.
Sales and Average Price Growth Continued in September
October 3, 2014 -- Toronto Real Estate Board President Paul Etherington announced that there were 8,051 transactions reported through the TorontoMLS system in September 2014. This result represented a 10.9 per cent increase compared to September 2013. On a year-to-date basis through the first three quarters of the year, sales were up by 6.9 per cent annually to 73,465.
"Despite a persistent shortage of listings in some market segments, we have experienced strong growth in sales though the first nine months of 2014. This is evidence that GTA households remain upbeat about purchasing a home. The majority of home buyers purchase a home using a mortgage. The share of the average household's income dedicated to their mortgage payment remains affordable, which is why buyer interest has remained solid," said Mr. Etherington.
The average selling price for September 2014 transactions was $573,676 – up by 7.7 per cent compared to the same period in 2013. Average year-over-year price growth was strongest in the City of Toronto, both for low-rise home types like detached and semidetached houses and for condominium apartments. The average selling price year-todate was $563,813 – up 8.5 per cent compared to the first nine months of 2013.
"If the current pace of sales growth remains in place, we could be flirting with a new record for residential sales reported by TREB Members this year. On the pricing front, the multitude of willing buyers in the marketplace coupled with the short supply of listings will continue to translate into very strong annual rates of price growth in the fourth quarter," said Jason Mercer, TREB's Director of Market Analysis
GTA home buyers faced with moving up or out
Affording a house means shopping outside of the GTA for many new buyers
The GTA housing market these days is a study in extremes.
Home-hunters of average means looking for a place to buy have two stark choices: move up, or move out.
In response to the province’s Places to Grow intensification plan, there’s been a fundamental shift toward highrise development, and a corresponding drastic reduction in the amount of houses and townhomes being built across the region.
This shift has had a dramatic impact on the price difference between the two housing types.
Back in January 2005, the RealNet Price Index for a lowrise home in the GTA was $371,426 — a $100,574 premium over the price of a highrise home.
Less than a decade later, in June 2014, the price index set a new record high for lowrise homes at $680,529. It was also a new record-high premium of $243,653 over the price of a highrise home.
For a young couple earning a combined household income of $125,000 — with a $50,000 downpayment and traditional mortgage financing — a $500,000 budget will open the door to a range of new-home options.
But they’ll have to either move up or move farther out into the GTA and beyond to the Greater Golden Horseshoe (GGH) to access those purchase options.
Moving up means embracing the concept of raising children in an apartment condominium. A two-bedroom unit in the downtown-west area will, on average, comprise 805 square feet and cost $489,000. And it’s only a 20-minute commute to Union Station using the TTC.
A slightly larger two-bedroom-plus-den unit along the Sheppard corridor will be, on average, 911 square feet and cost $457,000. But it’ll take 45 minutes to commute to Union Station on the TTC.
Young house-hunters seeking traditional, ground-oriented homes will have to explore the move-out option.
A townhouse in Brampton will offer 1,858 square feet of space (more than double that of the two previously mentioned Toronto condos) for $433,000. Using GO transit, the commute time to Union Station is 40 minutes.
Farther afield, beyond the GTA and into the GGH, a detached home in Kitchener will provide 2,317 square feet and cost $482,000. But, on the GO system, it’s a two-hour commute to Union Station. Better pack a good book.
Intensification has created an extreme condition in the Toronto housing market. It requires that young families who aspire to own homes make certain choices involving trades-offs: location, commute time, form of housing and amount of space.
These folks will either have to move up, and embrace the concept of urban living and raising a family in a highrise condo.
Or they’ll have to move out, beyond the GTA and into the Greater Golden Horseshoe, and accept long commutes as a part of their everyday life.
George Carras is the president of RealNet Canada Inc.
Sales and Average Price Up Year-Over-Year in July
August 7, 2014-- Toronto Real Estate Board President Paul Etherington reported strong year-over-year growth for July 2014 sales and the average selling price. Sales reported by TREB Members through the TorontoMLS system were up by 10 per cent to 9,198. This was the second-best July sales result on record.
“The second half of 2014 started where the first half left off, with very strong demand for the diversity of affordable home ownership options in the Greater Toronto Area. Sales were up strongly for most major home types and market conditions actually tightened, with sales growth outpacing listings growth. The result was average price growth well-above the rate of inflation,” said Mr. Etherington.
The average selling price for July 2014 sales was $550,700 – up by 7.5 per cent compared to July 2013. The strongest rate of price growth was reported for the detached market segment in the City of Toronto, with a year-over-year change of 11 per cent. The better-supplied condominium apartment segment experienced average price growth of 5.3 per cent for the GTA as a whole.
“Strong demand for ownership housing will underpin robust average price increases for the remainder of 2014. In fact, the pace of price growth that we have experienced over the past year will continue until growth in listings outpaces growth in sales for a sustained period of time,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
Strong Growth in June Sales
July 4, 2014-- Stepping into his role as President of the Toronto Real Estate Board, Paul Etherington announced a strong increase in residential sales reported through the TorontoMLS system in June. Sales were up by 15.4 per cent year-over-year to 10,180 transactions. New listings were also up compared to the same period in 2013, but by a lesser annual rate. This means that competition between buyers increased in June.
“Home buyers in the Greater Toronto Area are confident in their ability to purchase and affordably pay for a home. Generally speaking, buyers feel that ownership housing will be a good investment over the long term. This is why we continued to see increases in home sales in June for all major home types across the GTA. Given the degree of pent-up demand in the market today, I would expect to see sales growth continue through the summer,” said Mr. Etherington.
The average selling price for June transactions was $568,953, representing an increase of 7.4 per cent compared to June 2013. The strongest price increase for the GTA as a whole was for semi-detached houses, with the average price up by 9.7 per cent year-over-year. The pace of price growth for condominium apartments was also strong at 6.8 per cent.
“With less than two months of inventory in many parts of the GTA, it makes sense that we continued to experience very strong price growth in June. This is especially the case for low-rise home types like singles, semis and townhouses. Strong price growth for these home types will continue through the remainder of 2014. Despite higher inventory levels, the condominium apartment market segment has benefitted from enough buyer interest to result in above-inflation price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
Homeowners happy, confident about purchase
Jun 25, 2014
Homeowners are “happy with the decision to buy their home,” feel confident they can weather a downturn in the housing market and they consider mortgage debt to be “good debt.” Their attitudes are the same whether they live in Toronto, Calgary or Vancouver where prices continue to rise, or in areas where home prices are stabilizing, says a new consumer survey report by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
“From the consumer perspective we have a picture of a very confident, healthy mortgage market,” says Jim Murphy, president and CEO of CAAMP. “Key to the current stability in the mortgage market is the fact that Canadians continue to pay down their mortgage debt faster than they are required and they continue to take out five-year, fixed-rate mortgages. Canadians who renew their mortgages are seeing their interest costs reduced, which is boosting their personal financial circumstances and this will continue to be a positive force during the coming year.”
The survey says:
* 55 per cent of homes purchased in 2013 were bought by first-time buyers.
* Most Canadians say they have no regrets taking on the size of mortgage they did and that real estate is a good long-term investment.
* 66 per cent agree in some degree that mortgages are a form of “good debt”.
* House prices in Toronto, Calgary and Vancouver have increased by a year-over-year rate of 8.2 per cent, compared to just 2.9 per cent in the rest of Canada.
* More than 80 per cent of homeowners in Canada have 25 per cent or more equity in their homes.
* The average mortgage interest rate is 3.24 per cent, a drop from the average of 3.5 per cent found in the fall 2013 survey.
Canadians are reducing their mortgages by negotiating lower interest rates, making lump sum pre-payments and repaying their mortgages at, on average, two-thirds of their contracted amortization periods, says the report.
“Across Canada the housing market is slowing and has been on a downward swing since the mortgage policy change in 2012,” says Will Dunning, CAAMP’s chief economist. “While the national market may look healthy, activity in the Greater Toronto Area (including Hamilton), the Greater Vancouver Regional District and the Calgary area is skewing the numbers high. In the rest of Canada sales activity has weakened and house prices are flat and even falling in some communities. Housing has played a key role in driving economic growth and job creation in Canada. But looking ahead, decreased starts and slower price growth will throw off the balance between the housing market and the overall economy.”
The report urges policy makers not to confuse rising home prices in the Toronto area and Vancouver, where urban land shortages are driving prices, and the Calgary area, which currently benefits from strong job creation, with the slowdown that is evident in other communities across the country
June 4, 2014 -- Toronto Real Estate Board President Dianne Usher announced that both the number of home sales through the TorontoMLS system and the average selling price were up strongly in May compared to a year ago.
Total TorontoMLS sales for May 2014 amounted to 11,079 – a new high for the month of May. This result was up by 11.4 per cent compared to 9,946 sales reported in May 2013. The average selling price for these sales was $585,204, representing an 8.3 per cent year-over-year increase compared to the average price of $540,544 in May 2013.
“We are now at the peak of the spring market when we generally see the greatest number of sales and the highest average selling prices. Based on the May statistics, buyers have been more active this spring compared to last year. Despite strong price growth so far in 2014, many households remain comfortable with the monthly mortgage payments associated with the purchase of a home, as borrowing costs have remained at or near record lows over the past few months,” said Ms. Usher.
Average selling prices varied across the Greater Toronto Area, depending on geography and home type. A detached home in the City of Toronto sold, on average, for $943,055. In the surrounding GTA regions, the average detached price was $648,439. The average price for condominium apartments was $401,809 in the City of Toronto and $307,307 in the surrounding regions.
“The listings situation in the GTA did not improve this past May. With listings down and sales up compared to last year, competition between buyers increased. The result was price growth wellabove the rate of inflation, especially for singles, semis and townhomes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
“It is also important to point out that even though the condo apartment market segment remains comparatively well-supplied, as new project completions have generally led to an uptick in listings, we have seen enough buyer interest to prompt strong condo price growth as well,” continued Mercer.
May 6, 2014 -- Toronto Real Estate Board President Dianne Usher announced that during April – the first full month of spring – Greater Toronto REALTORS® reported a 1.8 per cent year-over-year increase in sales through the TorontoMLS system. Total April 2014 sales amounted to 9,706, compared to 9,535 transactions in April 2013.
“April marked the beginning of the spring market, during which time we generally see the highest monthly sales totals in a given year. Despite the persistent shortage of listings, a substantial number of GTA residents were able to come to terms on a home that met their needs. However, sales levels would have been higher, but for the lack of supply,” said Ms. Usher.
“A number of factors underlie the constrained supply of listings. Studies and polling suggest that the additional upfront land transfer tax in the City of Toronto has prompted some households to stay put and renovate rather than list their home and move. In the broader GTA context, abovetrend home sales in the years leading up to the recession have meant that many households who purchased during this period simply aren’t ready to move again,” continued Ms. Usher.
The average selling price for April 2014 sales was $577,898 – up by 10.1 per cent compared to the April 2013 average of $524,868. The MLS® Home Price Index (HPI) Composite Benchmark was up by seven per cent year-over-year. The MLS® HPI strips away price fluctuations resulting from a change in the mix of home types sold from one period to the next.
“Price growth for the GTA as a whole was driven by the single-detached, semi-detached and townhouse market segments in the City of Toronto. So far this year, there has been no relief on the listings front for these home types in many neighbourhoods in Toronto and surrounding regions. Until we see a marked and sustained increase in listings, we should expect to see the annual rate of price growth above the long-term norm,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.
GREATER TORONTO REALTORS® REPORT LATEST MONTLY RESALE HOUSING MARKET FIGURES
TORONTO, March 5, 2014 – Toronto Real Estate Board President Dianne Usher announced that February 2014 home sales reported by Greater Toronto Area REALTORS® were up by 2.1 per cent compared to the same period last year. Total February sales amounted to 5,731 compared to 5,613 last year.
“Despite the continuation of inclement weather in February, we did see a moderate uptick in sales activity last month. The sales increase was largely driven by resale condominium apartments. New listings of resale condominium apartments were up on a year-over-year basis, giving buyers ample choice. This is in contrast to the listings situation for singles, semis and townhomes, where supply continued to be constrained. Some would-be buyers had difficulty finding a home that met their needs,” said Ms. Usher.
“If we see renewed growth in listings for low-rise home types, the pace of sales growth will accelerate as we move through the year,” Ms. Usher continued.
The average selling price for February 2014 sales was up by 8.6 per cent to $553,193, compared to the average of $509,396 reported for February 2013. The MLS® Home Price Index (HPI) Composite Benchmark was up by 7.3 per cent year-over-year.
“While the strong price growth experienced over the last year should prompt an improvement in the supply of listings, sellers’ market conditions will continue to prevail this year. Home prices, on average, will trend upwards at a pace well-above the rate of inflation. The impact of strong price growth on affordability will be mitigated by low borrowing costs,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
Canadian housing starts pick up again in Feb: CMHC
Canadian housing starts rose more than expected in February, data released on Monday showed, but the modest increase did not sway economists' expectations that the country's housing market will cool this year.
The seasonally adjusted annualized rate of housing starts rose to 192,094 units last month from a upwardly revised 180,481 in January, the Canada Mortgage and Housing Corp (CMHC) said. That topped expectations for an increase to 189,500.
Activity had decreased in January due to unusually harsh winter weather and the rebound in February suggested some of the weather-related impact was starting to wash out of the economic data.
The six-month moving average showed housing starts stood at 192,236 units. Since August 2013, the trend has remained in a range between 185,000 and 195,000, in line with CMHC's outlook for a stable housing market this year, the report said.
A booming Canadian housing market in recent years prompted fears of a U.S.-style collapse, but Canada has so far avoided such a correction. The Canadian government intervened four times to tighten mortgage rules, which has helped rein in the market.
Most economists believe an increase in borrowing costs this year and an economy that is growing only modestly will lead to a softer but stable market in 2014.
"We remain of the view that construction activity will edge lower over the course of the year as the forecasted increase in interest rates should restrain demand," said David Tulk, chief Canada macro strategist at TD Securities in Toronto.
"A smaller contribution from the housing market is consistent with the macro theme of domestic fatigue that will leave headline growth at or below its trend rate until net exports are able find their footing both in response to a weaker currency and a fundamentally stronger US economy."
Urban starts increased by 7.5 percent to 175,584 in February. Multiple urban starts surged by 13.3 percent to 116,458, while single-detached urban starts decreased by 2.4 percent to 59,126.
Activity increased in urban centers in Quebec and in the Atlantic region, was stable in Ontario, and decreased in the Prairie provinces and British Columbia.
By Leah Schnurr
Greater Toronto Area REALTORS® reported 6,391 residential sales through the TorontoMLS system in November, representing a 13.9 per cent increase over the sales result for November 2012. Over the same period, new listings on TorontoMLS were down by 4.4 per cent and month-end active listings were down by 12.1 per cent.
“Growth in sales was strong for most home types in the Greater Toronto Area. Sales growth was led by the single-detached market segment followed by condominium apartments. Together, singles and condos accounted for almost three-quarters of total GTA transactions,” said Toronto Real Estate Board President Dianne Usher.
“With National Housing Day having just passed, housing affordability is top of mind in the GTA and indeed nationally. Despite strong price growth and an uptick in borrowing costs this year, monthly mortgage payments on the average priced home remain affordable for a household earning the average GTA income,” continued Ms. Usher.
The average selling price for November 2013 TorontoMLS transactions was $538,881 – up by 11.3 per cent in comparison to the average of $484,208 reported for November 2012. The MLS® Home Price Index (HPI) Composite Benchmark was up by 5.7 per cent over the same period.
“Whether we consider the average TorontoMLS selling price or the MLS® HPI Composite Benchmark, annual home price growth remained well-above the rate of inflation in November. This makes sense given the fact that competition between buyers increased last month. Transactions were up strongly year-over-year while the number of homes available for sale was down,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
Toronto Real Estate Board, December 4, 2013.
Not too many people expected a huge increase in Real Estate sales this Fall compared to the same period last year. Actual increase was about 30%! 7,411 single family homes sold in September 2013 compared to 5,687 transactions reported in September 2012. This brings the year-to-date, total of residential sales reported through the Toronto MLS system to 68,907 during the first nine months of 2013, and on target to over 90,000 homes sales in 2013, making it one of the most active years for real estate trading hands.
“It’s great news that households have found that the costs of home ownership, including mortgage payments, remain affordable. This is why the third quarter was characterized by renewed growth in home sales in the GTA. We expect to see sales up for the remainder of 2013, as the pent-up demand that resulted from stricter mortgage lending guidelines continues to be satisfied”, said Toronto Real Estate Board President Dianne Usher.
The average selling price for September transactions was $533,797 – up by 6.5 per cent year-over-year. Through the first three quarters of 2013, the average selling price was $520,118 – up to over four per cent compared to the first nine months of 2012.
The MLS Home Price index composite benchmark for September was up by 4 per cent year-over-year. The annual rate of growth for the composite benchmark has been accelerating since the spring of 2013.
“The price growth story in September continued to be about strong demand for low-rise home types, coupled with a short supply of listings. Even with slower price growth and month-to-month volatility in the condo apartment market, overall annual price growth has been well above the rate of inflation this year. This scenario will continue to play our through the remainder of 2013”, said Jason Mercer, TREB’s Senior Manager of Market analysis.
The real reason for Toronto’s strong real estate market is immigration. Every year about 150,000 of new immigrants are coming to Ontario. Most of them are settling down in GTA. They all need to live somewhere. That has created the demand for houses and the resulting construction boom. Those who cannot afford to buy are renting and that means condominiums. Downtown condominiums are being sold at a bargain price of $500-$700 per sq ft, with rental rates of $1,800 - $2,200 per month for an average 600 sq ft unit. This represents a great investment opportunity In many different ways.
The market will continue to be strong over the next several months and there are many great opportunities for either investing or upgrading your home.
Total sales were up by 16 per cent compared to July 2012 as Toronto realtors reported 8,544 residential sales through the Toronto MLS system in July 2013. This brings the total sold to date to 54,337 and the average price of a home in Toronto to $521,025. With the upsurge in activity, it looks like we will end the year with over 90,000 transactions, well ahead of 2012's 85,502.
While condominiums have been getting "bad press" recently, it's important to look at the reality of what is occurring. July numbers are as follows:
Home Sales:Listing inventory 20,514, 8544 sales, 41% sold on average in 27 days, 98% of asking price.
Condominium Apt Sales:Listing inventory 6,903, 1894 sales, 27% sold on average in 34 days at 97% of asking price.
Yes condominium sales are slower than house sales, but the words bad, slow, poor are a total exaggeration of a strong resale condominium market. The 3 keys to any real estate purchase are, "location, location, location." The same runs true for condominium sales. The well located projects sell like hotcakes, while the projects with poorer locations have to sit longer on the market and be more competitive when it comes to price.
I still think it wise to purchase good condominiums for rental income and as a long term investment. If you have children who will need to live in downtown Toronto for university, consider buying now.
Have a great August!
The sale of 9,061 single family homes in June brought the year total to 46,058, with a projected year-end of 85,200, right in line with 2012's 85,500. However, I believe that activity will be stronger in the last 6 months of 2013 and we will surpass 2012 total sales.
Several factors are key, chief among them is demand. Earlier in the year, there were changes made to lending (mortgage) guidelines. The media predicted that this would slow the market down and that this would result in an adjustment of house prices. A large number of homebuyers put their purchase on hold and when it became evident that the market was not severely impacted, jumped back into the market and reactivated their search. I did a quick search of sales over a two day period, and was surprised by the results. 26% of the homes sold above asking price (indicating multiple offers), with 89% of the homes sold above 95% of asking price. This is great proof that demand is high and exceeds listing stock. The average sale price has also increased from $497,143 in December of 2012 to $522,820 as of the end of June , more than 5%!
While the demand for homes remains strong, there is a slight adjustment occurring, from a Sellers Market to a Buyers Market. A Sellers Market exists when there are fewer homes available for sale than buyers. Prices rise steeply as buyers compete to buy a home. In a Buyers Market there are more homes available for sale than buyers. Buyers have several homes that they can buy and can negotiate at leisure to get the home that they like. HOWEVER, well priced homes, within 5% of the market value will sell quickly and with multiple offers. (If a property is for sale longer than 18 days we know it is overpriced by at least 5%!)
It is still a great time to buy real estate. Prices are expected to continue to rise. With the recent tightening of mortgage rules, rental properties will benefit as some individuals will continue to rent instead of buying. With low interest rates, it’s a great time to buy an investment property or upgrade your personal residence.
I believe the above factors, combined with a great economy and continued immigration will continue to make home ownership in Toronto and surrounding areas a great investment.
The Press vs. Reality… Reality prevails!
With all of the “talk” of market slowdown and price adjustment, April’s sales numbers certainly came as a surprise to many people. Toronto realtors reported 9,811 sales through the Toronto MLS system in April 2013, bringing the year total to 27,285 and heading for another 80,000+ resale total. In other words, another great year for house resales in the GTA!
Condominium resale sales have been very strong due to the affordability factor (priced in the $300,000s). The pricing of these condominiums combined with good downtown locations has been the perfect formula for young people setting up their own homes. The key is location! Buildings just a 10 minute walk apart will have totally different resale results.
As we head full steam into the Spring Market and more buyers come out of “winter hibernation”, expect to see a bump in prices and bidding wars on well-priced properties. The key is well priced. With the growth of the Internet and social media (e.g. Facebook), buyers are more knowledgeable and aware. Properties priced within 5% of market value will receive multiple offers, while properties priced just 10% over market value may languish unsold for months.
The Toronto real estate market will continue to be strong, and it is still a great time to investigate investment properties.
Have a great May!
Despite an unusually cold, and snowy March, 7,765 homes were sold through the Toronto Real Estate Board. (Does not include builders’ sales of preconstruction homes and condominiums). This brings the total sales for 2013 to 17,678 – down from the 20,626 sales at the same time last year.
The average price for the first quarter was $508,066, an increase of $10,920 (3.2%) since December 2012. The unexpected price increase over the cold winter months, plus a short selling time, (24 days to sell the average home), is a good indication that the demand for houses remains strong. With no “bust of the real estate bubble” evident, home sales and prices will continue to heat up over the next three months as we enter Toronto’s Spring market.
Economically nothing has changed for the GTA. We are stable, interest rates are low and affordable and massive immigration and the resulting demand for homes has not diminished. In other words, real estate demand continues and prices are expected to rise again in 2013.
The challenge with “averages” is that while they give you an idea of trends, they don’t show the complete picture. For example:
If one house sells in 1 day and another house sells in 47 days, the average time to sell a house is 24 days. If 1 house sells for $500,000 and next door, the identical house sells for $560,000, then the average selling price is $530,000. In these cases, (which happen every day!) averages are not satisfying at all.
These drastic differences occur as a direct result of the real estate agent and company one chooses. Bigger companies spend more in promotion, websites, and advertising as well as training and supervising their agents. Better agents are more talented, conscientious and committed than most. If you needed a heart transplant, would you go to any doctor, or would you find the best? With a home being the most expensive asset people will ever own, I know that different agents get different results! While any home will sell, the price, terms, conditions and ultimate satisfaction of the buyers and sellers needs and desires are not met by all agents. (In 2012, over 8,000 agents did not sell 1 house!)
If you need some real estate advice, or know of a friend who is thinking of buying or selling, please feel free to give me a call. Put my and my company’s experience (#1 RE/MAX in the world for highest volume of sales 2012) to work for you!
Have a great April!
5,759 homes sold in February 2013, a strong month of sales for the members of the Toronto Real Estate Board. 4191 of those homes, (73% of the 5759 homes sold) were between $200,000 and $600,000, demonstrating that:
a) There are still affordable properties in the GTA
b) Many first time buyers are buying, and taking advantage of the low interest rates.
344 of the homes sold were over $1,000,000 with 50 of them selling over $2,000,000! Combined with the average home selling in 28 days, bidding wars for good properties and winter storms with lots of snow, it looks like 2013 will be another busy year for sales in Toronto.
The average price for a house rose in February to $510,580, bringing the year to date average to $498,536, slightly higher than the close of 2012’s $497,186, but a good indication that prices will increase again in 2013.
But why shouldn’t they? Low interest rates, a good economy, little rental accommodation and continued MASSIVE immigration to Ontario from around the world and other parts of Canada, mean that property will continue to be in demand. After all, they do say,” have you bought your land yet, they are not making any more!”
As the weather changes in March and April, more buyers will hit the streets and we will continue seeing even more bidding wars and higher prices.
My only recommendation is that if you are considering buying in 2013, do it as soon as possible to avoid the “spring rush”.
December’s 3,690 homes sold brought the total sales for 2012 to 85,731 – down from 89,096 transactions in 2011 but not significantly different. What was significant was that the price of an average home rose almost 7% over the last 12 months, from $465,014 to $497,298.
Here is a great article written by my broker concerning his predictions for the 2013 market.
1. In 2013, 300,000 legal new immigrants will be admitted into Canada, and perhaps an additional 30,000-40,000 refugees will be seeking legal admission into Canada. With 60% moving into the GTA, that is a large group of consumers requiring housing, whether it be purchasing or renting. In addition, there is a cross-Canada immigration, as Canadians from other Provinces are drawn to the GTA due to the many opportunities here.
2. As young people enter the rental market, that creates demand, shrinking inventory and rising rental rates, a trend we saw in 2012, which will continue in 2013.
3. As rental rates increase and mortgage rates remain at historic low levels, more first time buyers enter the market as the difference between the cost of renting and owning becomes negligible.
4. Increasing cost of land. As they say, “Have you got yours yet? We are not making any more.” The “big city prices” have already impacted Newmarket, Whitby, and areas west. Now builders are looking past those areas to create Toronto’s new “bedroom communities”.
5. Higher construction costs.
a) Material. Copper, iron, lumber and sheet rock have all gone up and are continuing to increase, as are all construction materials.
b) Labour. As the cost of living increases and demand for construction workers continues labour costs continue to increase.
These 5 major factors will continue to be the driving force behind the real estate activity in the GTA in 2013.
I believe that the total number of transactions in 2013 will be similar to 2012, with an average price increase of 5% by the end of the year. Alex Pilarski, RE/MAX Realtron Realty Inc.
I too am anticipating 2013 to be a busy year, and look forward to helping you and your friends with any real estate questions and needs you may have. Please feel free to call and chat anytime. After all, you do have a friend in real estate!
They say the real estate market is slow. Here are the facts…You be the Judge!
6,896 homes sold in October 2012 vs. 7,425 in October 2011.
76,587 homes sold YTD as of October 2012 vs. 77,603 as of October 30 2011.
The average home price as of October 30, 2012,is $499,350 vs. $465,014 in December 2011.
All in all it seems to me to be, “Much ado about nothing!”
However, while I believe the real estate market is healthy and strong and that prices will continue to increase, I do advise caution. What does that mean? Primarily this is not a time to speculate or gamble on the market. Do not buy or sell today assuming that you will buy or sell next year because prices will have gone up or down. Within a six month period, no one knows prices, activity levels, interest rate changes or economic factors and all of those affect real estate demand and prices.
This is a great time to buy real estate, provided you have a 5 year timeframe, meaning you do not have to sell for 5 years. It's a great time to sell your home, and buy a replacement home. There is no gamble if you are buying and selling in the same market!
It's a great time to buy as there are more homes for sale, fewer buyers in the market (November, December, January are the slowest months for house sales in Toronto) and interest rates continue to be very low which means homes are affordable for many buyers.
Sometimes one must be a Contrarian, go against the trend. Today's trend, fueled by negative media is insecurity about the real estate market - “wait, as no one knows what will happen”.
Here is what I know: 1975 average Toronto home price $57,581. 1985 average Toronto home price $109,094. 1995 average Toronto home price $203,028. 2005 average Toronto home price $335,907.
2011 average Toronto home price $499,350.
Buying or selling is a complicated issue. If you have questions, please feel free to call me and let's chat. If you know of anyone who could use my expertise, please let me know I would love to help!
Have a great November!
The 5,879 single family homes sold in September brought the total sales up for the year to 69,909 with a year to date average price of $ $499,090, up 7.3% over last year’s average price of $465,008. The last 3 months of the year average 20.5% of the sales done for the year, so it looks like 2012 will end with 88,000 sales a very strong year for Toronto real estate. In addition to the resale homes, approximately 25,000 pre construction condos have sold in 2012.
While the recently introduced stricter mortgage lending guidelines have impacted the number of sales to an extent, the inventory of homes available for sale remains low which has resulted in strong price increases. September average selling prices were up compared to last year for all major home types. Price growth was strongest in the City of Toronto, including condominium apartments with eight per cent year-over-year growth. All home types experienced year-over-year price increases, with substantially stronger increases for low-rise home types.
August’s sale of 6,418 single family homes brought the total sales for the year to over 64,000 and the 2012 projection to about 90,000, which will make this year one of the most active years in the history of the Toronto Real Estate Board.
We Canadians love bad news, and the press loves to warn us about POTENTIAL events. Take for example the swine flu (H1N1) “pandemic”, or the 3 week in advance warnings that a hurricane forming in the Caribbean today will bring thunderstorms and unsettled weather to Toronto by the end of the month. Please! They can’t even get tomorrow’s weather correct! But we LOVE bad news. The media has been warning of a real estate slowdown since 2001, (right after they warned us about Y2K when all of the computers would crash, airplanes would fall out of the sky and our society would be totally disrupted!)
The scare mongering by the media has impacted the real estate market, but with 6,418 sales in August, not really too much. But it has made it a great time to buy, as the Nervous Nellies want to wait to see what happens before they decide what to do.
Lets look at the facts. Canada’s economy is strong. The stock market is doing well. Unemployment rates are at a healthy level. Interest rates are at historic low’s making home ownership available to many individuals. Rental accommodation is at dangerously low levels with downtown rental units of 700 sq feet renting for $2,000- $2,500 per month if you are lucky enough to find one!
I never recommend speculating in real estate, but I do recommend investing in real estate. Investing means buying and prepared to hold for at least 5 years, and to be able to withstand any hiccups the market may experience.
Buying a property that has positive cash flow is always a good idea, and rental rates have never gone down in Toronto regardless of the economy, as people must live somewhere.
The market is strong and a small inventory of homes for sale guarantees prices will continue to increase and ensures that real estate remains a good investment.