The City Of Toronto Real Estate Market continued its upward climb in July with greater sales volume and higher sold prices. As compared to last July, property prices rose 8.5% and the number of properties sold increased by 11.8%.
The average price for a property in the City of Toronto now stands at $824,336, an impressive improvement from last July when the average sold price was $759,441.
Every housing type category experienced price increases as compared to last July.
The average sale price for detached homes came in at $ 1,350,700, an increase of 3.6%. Semi-detached houses increased by 7.4% to $935,300, and condominium apartments continued their upward trajectory, coming in at $582,247, an increase of almost 10%.
The average sale price for condo apartments in Toronto’s central districts, (where 65% of condo sales take place), came in at $653,137.
$1,000 per square foot is now the new normal and serves as a benchmark for condo apartments selling in the downtown core.
July also saw a recovery in the high-end of the market in the City Of Toronto. Property sales over the $2M mark, primarily single-family properties, were dramatically impacted by the implementation of the 15% foreign buyer’s tax, the new mortgage stress testing, and 3 interest rate increases implemented by the Bank of Canada.
For example, during the first 7 months of 2018, realtors reported 914 properties sold with a price of $2 Million or more in the city. This number compares very poorly with the 1,481 luxury properties that were reported sold over the same period last year, a negative variance of 38%.
In July this negative pattern was reversed. In July 122 properties having a sale price of $2 Million or more were reported sold. This compares favourably to the 94 similar properties that sold in July of last year, an increase of almost 30%.
It should be noted that this improvement in sales volume is due to a combination of buyers adjusting to the various measures introduced by governments, increased mortgage rates and sellers accepting that their expectations as to the ultimate sale price of their properties had to be lowered.
This is reflected in the fact that the average sale price came in at only 98% of asking price for detached homes, and in districts where Toronto’s most expensive properties are located, at only 96%. Even these figures are not entirely representative since they do not account for any price reduction from the original list price of these properties.
Inventory levels are a concern. Throughout 2018 they have been declining in the 416 regions. Of special concern are semi-detached properties and condominium apartments. In both categories, levels are now lower than they were last year at this time.
In July there were only 329 active semi-detached properties available to buyers in Toronto, and only 2,583 condominium apartments. Last year there were 2,710 condo units available and that figure was substantially less than the prevailing buyer demand. Due to these shortages, all semi-detached properties sold at 103% of their asking price. All condo units sold at 100% of their asking price.
Going forward the lack of inventory (semi-detached and condo units) will continue to put upward pressure on average sale prices, but that pressure will be limited. The increase in mortgage interest rates and the implementation of the new mortgage stress testing will limit buyers’ ability to stretch to higher prices as was the case last year.
What should result is moderate increases in average sale prices and the number of residential resales. Increases should not exceed 3-5% until either interest rates decline, or we see substantial increases in wages and salaries.
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.