The City of Toronto saw average sold prices for properties rise in the month of September. This is significant because after four months of consecutive decline, Toronto property sales have now reversed course.
The 5 month backslide began April 20th, when the provincial government announced a 15% foreign buyer’s tax that sent the Toronto real estate market into a downward spiral.
September marked an end to the free-fall with the average sold price for a property at $809,591. Up 11% from August's average sold price of $726,712 and was also 6% increase from last September’s average sold price of $764,872.
Unlike the frenzied market that we experienced from January to April, these September sales represent the first step toward Toronto’s real estate market returning to normalcy with property values rising in a more moderate, sustainable way.
Keep in mind these September sales numbers are specific to the City of Toronto and do not include the outlying areas of the 905. Outside the City, but within the GTA, sold prices rebounded by only 6%.
The number of properties sold in Toronto in September was down 30% compared to last year. 2510 properties sold this September as compared last September when 3599 properties sold.
Within the City, recovery remains fractured and micro-local with some sub-markets out performing others. The number of detached properties sold in September was down 41% from last month. While the volume of semi-detached properties sales was only down by 15% and 23% for condominium apartments.
Average sale prices for detached and semi-detached houses rose by 4% and 5% respectively compared to September 2016. While the average sale price for condos rose by 24% compared to last year. Notwithstanding the negative press concerning the Toronto resale market place and its “collapse”, house prices in Toronto continue to be very expensive. But given prevailing interest rates, they are still sustainable.
In September the average price for a detached home in the City of Toronto was $1,355,234. The cost of a semi-detached home was not far behind at $935,467. Even condos are becoming pricey.
In September, the average price for a condominium was $554,069. In the City of Toronto’s central districts, where most of Toronto’s condo towers are located, the average sold price for a condo was $615,654. That’s a 23% increase from last September when the average selling price for a condo in downtown Toronto was only $498,896. Notwithstanding these elevated prices, all these central condos sold on average for 100% of their asking price.
On the freehold side, the region just to the east of the central core, comprising the neighbourhoods known as Riverdale, Leslieville and the Beaches, continues to trade as if the downturn experienced everywhere else in the Greater Toronto Area never happened. In September all detached properties in these area sold for almost 104% of their asking price and in a mere 14 days.
Semi-detached properties moved even faster, selling in just 8 days and for sale prices that exceeded the asking price by more than 105%. The average sale price of detached and semis reported sold in these neighbourhoods was $1.286M and $928,000 respectively. Since April, the market has moved from an insane Seller’s market to a more nuanced, balanced market (except of course in Riverdale, Leslieville, and the Beaches).
In September, 5,535 new properties came to market on the MLS, a decrease of 3% compared to the 5710 that came to market in September 2016. At the end of September there were 5732 properties available to Buyers, an increase compared to 4780 available last year. In percentage terms, availability has increased by 20% year over year.
Needless to say, with an increase in supply, average days on the market and months of inventory have also increased. Year over year days on market have increased from 18 to 21 days. Months of inventory, calculated on a 12 month moving average, is now 1.4 months for the City of Toronto.
Months of inventory, using only the September data, is more like 2.28 months, a much more accurate reflection of the market that the 12 month moving average.
The market is normalizing. It will continue to improve moderately, as year-end approaches. Sellers hoping for the heady days of January through April will be disappointed.
In addition to assimilating the impact of the Foreign Buyer’s Tax, the Toronto market has had to contend with two quarter-point mortgage interest rate hikes, and potentially more to come. There is also the looming threat of additional stress testing which the Office of the Superintendent of Financial Institutions has proposed.
All of these factors will have a moderating effect on the residential resale market going forward.
Victoria Boscariolis a real estate agent in Toronto Canada with Chestnut Park Real Estate Limited Brokerage. With over 20 years experience, Victoria has been helping people successfully buy and sell condos and houses in Yorkville and downtown Toronto. As a Certified International Property Specialist (CIPS) she has worked with Buyers from around the world moving to Toronto from China, Russia, Brazil, India, South Africa, United Arab Emirates, Jordan, Cyprus, Italy, Germany, The United Kingdom, Australia and the United States. By building an international marketing strategy for every property she puts up for sale, Victoria's listings of Toronto homes and luxury condos get global exposure that attract qualified buyers from around the world.