September’s property sales reveal that the residential real estate market in the City Of Toronto has reached a “new normal” and stabilized after several months of finding its way with the implementation of the foreign buyer tax, mortgage stress testing and interest rate hikes.
Its now clear that the frenzied market of 2016 and early 2017 was driven by cheap, easy money. During this period low mortgage rates were for several months less than inflation.
The average sold price for a property in the City of Toronto in the month of September was $864,275 - a 6.8% increase from September 2017 when it was $809,591.
A shortage of choice properties available for sale and net migration to Toronto continue to be the contributing factors in the momentum of this real estate market.
High-end luxury property sales in the City Of Toronto have also steadied. 139 properties sold in September over the $2 Million mark as compared to September 2017 when 115 properties sold. But in September of 2016, 174 luxury properties sold – that’s 25% more than sold this September.
The Toronto Real Estate Board reports on property sales across the Greater Toronto Area and the bulk of the 20,089 properties available for sale are located outside the 416 region. Only 5,830 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. The year over year sale price in the City Of Toronto has increased by almost 7% while in the 905 region its only increased by slightly less than 3%.
Similarly it takes 26 days to sell a property in the 905 region as compared to the City Of Toronto where it only takes 21 days to sell. Translated into months of inventory there are only 1.9 months of inventory available in the City of Toronto. In the 905 region there are 2.6 months of inventory.
Keep in mind anything less than 3 months of inventory is considered a Seller’s market and a neutral or balanced market is 4 to 6 months of inventory.
Condominium apartment sales in the City of Toronto continued to roll ahead this September, as they remain the most affordable housing type.
In the City of Toronto, the average sale price for condominium apartments came in at $615,582. This is an 11% increase from last year when the average sale price was only $554,000.
In Toronto’s central core, where most condo sales take place, the average sale price came in at a whopping $687,701, or almost 12% higher than last September.
Last year 1,362 condominium apartments sold in Toronto. This year that number dropped to 1,282, a decline of over 5%. The difference can be attributed to the shrinking inventory levels.
It took 21 days to sell a condo in September, the exact same number of days as in September 2017. However, there were 3.6% less condos available for Buyers to choose from and new listings of condos was down by almost 4%.
The benchmark for a condo in downtown core is now $1000 a square foot.
In the City of Toronto, semi-detached houses remain the most sought-after housing types, notwithstanding that in most parts of the City they are becoming quite pricey.
In September all semi-detached homes sold in only 18 days and at 106% of their asking price. The average sale price for all semi-detached properties sold in the City of Toronto came in at just shy of $1 Million ($995,951).
The eastern trading areas in Toronto continue to be the hottest for these housing types. In the neighbourhoods of Riverdale, Leslieville, and the Beaches all semi-detached houses sold in only 15 days and for a startling 112% of their asking price.
Inventory shortages of semi-detached properties are pushing down days on market and putting upward pressure on sale prices.
Given the strength of the Canadian economy, a further mortgage interest rate hike is expected in October. In combination with previous rate hikes and the stress testing that is now being applied by lenders, the residential resale market will be confined to its present pace and rhythm for some time.
Welcome to the new normal.
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.