Against the odds, the residential real estate market in the City Of Toronto continued to climb higher for the month of October even with the latest interest rate hike from The Bank of Canada. After 2 years of being at 0.5%, the Bank has had 5 interest rate increases in the past 15 months and the interest rate now sits at 1.75%.
Despite these rate increases, both sale prices and number of properties sold were up from October 2017. Currently, the average sold price for a property in the City of Toronto is $869,870 up 6.32% from the same time last year.
Similarly the number of property sales in the City also increased year over year. Last October, 2,885 properties were reported sold in the City of Toronto while this October it was 3,031, an increase of over 5%.
City Of Toronto VS The GTA The Toronto Real Estate Board reports on property sales across the Greater Toronto Area and the bulk of the 18,926 properties available for sale are located outside the 416 region. Only 5,665 or 29% of these properties are actually situated in the City Of Toronto.
However major distinctions persist between the 416 and 905 marketplaces with the City Of Toronto marketplace having greater strength. Properties sell on average of 20 days in the 416 while it takes about 4 days longer in the 905. Available inventory is also substantially higher in the 905 region. Outside the City of Toronto there are 2.6 months of inventory and only 1.9 in the City of Toronto.
As these numbers indicate there has been no moderation in sale prices in the City of Toronto. In October the average sale price for all detached properties came in at over $1,300,000, semi-detached properties came in at over $1,000,000 and condominium apartments came in at 603,153, almost 9% more expensive than they were last year. Concerns about affordability in the City of Toronto are well-founded.
Luxury Property Sales Over $2M - Upscale Condos Outshine High-End Houses House sales in the luxury segment of the market have been lagging but in the month of October they had experienced some improvement. While the average sold price for a luxury house over $2M was down 2.6% from the same time last year, the number of luxury house sales increased of 27%.
Sellers of luxury houses are finally seeing the writing on the wall. The days of cheap money and frenzied appreciation (before April 2017) are gone and fewer people can now qualify or afford to buy their house. Thus Sellers are accepting more moderate sold prices for their homes.
Couple this with the fact that demand is changing. The population is aging and there are more baby boomers than ever that want to sell their luxury house. They want to downsize to a luxury condo but the reality is that there are simply not enough luxury condo units of a decent size available for sale in the City.
This downsizing demand and lack of inventory is causing luxury condos to appreciate faster than high-end houses. The average sale price for a luxury condo is now $2,655,308 up over 6% from last year.
Lack Of Supply Concerns In some areas of the market place the supply problem is becoming acute and unhealthy. In October 331 semi-detached properties in the City of Toronto were reported sold. At the end of the same month only 323 semi-detached properties were still available for sale, 2.5% less than the number of properties that sold.
It is not surprising that all semi-detached properties sold for 106% of their asking price. In the stalwart neighbourhoods of Riverdale, Leslieville, and the Beaches, 93 semi-detached properties were reported sold. At the end of the month there were only 44 properties available for sale. In these neighbourhoods semi-detached housing stock is virtually disappearing, lasting only 14 days on the market, and at average sale prices exceeding the asking prices by more than 110%.
The number of condominiums available for sale has also dwindled. At the end of October, the available stock in the City of Toronto totaled 1.6 months of inventory, with all sales taking place in a mere 20 days and at 100% of their asking price.
There is no doubt the market is strong and stable. Even the mortgage interest rate hikes and the now applied stress testing --- borrowers must qualify at rates approximately 2% higher than what they will be paying --- have not destabilized the market, although they have had a moderating effect. Even with declining inventory levels, the higher borrowing costs will constrain uncontrollable increases in sale prices.
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.
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purchase, sale and lease of real estate as part of a cooperative selling system. Canadian Real Estate Association Last Updated: 8/17/2019 01:13:33 AM