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Monthly Market Updates

Toronto Real Estate Market Report – November 2020

 

According to the calendar… this year is almost over. According to November’s market numbers, the craziness continues!

The Toronto Real Estate Market saw a drop in new listings, active listings and overall sales. It also took about 4 days longer (28 versus 24 days) for homes to sell in the city. But between a mid-month lockdown and the seasonality of the year – this didn’t really come as a big surprise. 

Average Price

The average price of a home in the city increased by 13% when compared to the same time last year, bringing us to an average price of $955,615. And for those keeping score… that’s a $116,000 increase since January of this year (not bad during a pandemic).

 

Every segment of the market saw a drop in sales for November. The detached market had the biggest decline with a 24% drop month over month. However on an annual basis, both detached and semi-detached saw great gains with an 18% and 36% increase for each. Price increases were also the strongest for these two segments up over 8.5% for each. 

Condo Activity

2020 was definitely NOT the year of the condo!  In November, sales were down by more than 4% month over month – and nearly unchanged year over year. Prices followed the same trend – down by 4% month over month and nearly 3% year over year (nearly $20,000 less than the same time last year).

… but it is in the condo market that we see the biggest opportunity. With prices down and supply up, buyers, especially in the downtown core, these next few months offer one of the greatest times to get into the market. A quick MLS search for 1 bedroom condos south of Bloor brought up nearly 150 listings – this time last year, that was practically unheard of!

Three Trends To Watch

  1. We’re optimistically hoping that vaccines and the current lockdown help bring down COVID-19 case numbers in the months ahead and a return to a new normal.
  2. New by-laws for AirBnB operators will be enforced in early 2021 – will this impact supplies in the condo market further
  3. Will those that left the city due to COVID-19 make it through a northern winter? And will that impact demand in 2021?

 

DETACHED HOUSES

993 sales took place
295 fewer homes than the previous month (24% decrease in sales)
145 more homes than the previous year (18% increase in sales)
The average price of a detached home was $1,477,226
An increase of $6,369 compared to the previous month (0.4% increase in price)
An increase of $116,980 compared to last year (8.6% increase in price)

 

SEMI-DETACHED HOUSES

336 sales took place

80 fewer homes than the previous month (19% decrease in sales)

89 more than the last year (36% increase in sales)

The average price was $1,160,911

An increase of $6,824 compared to the previous month (.59% increase in price)

An increase of $93,884 compared to last year (8.8% increase in price)

 

TOWNHOUSES

362 sales took place

47 fewer homes than the previous month (11.5% decrease in sales)

68 more homes than the previous year (23.13% increase in sales)

The average price was $819,752

decrease of $8,338 compared to the previous month (1% decrease in price)

An increase of $56,454 compared to the previous year (7.4% increase in price)

 

CONDOS

1,375 sales took place

63 fewer condos than the previous month 4.4% decrease in sales)

more condos than the previous year (.5% increase in sales)

The average price was $640,208

decrease of $27,953 compared to the previous month (4.2% decrease in price)

decrease of $19,647 compared to the previous year (3% decrease in price)

 

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Monthly Market Updates

Toronto Real Estate Market Report – October 2020

As we enter the third quarter of pandemic activity in the city, one thing is becoming abundantly clear – houses are in high demand… and condos, not so much!

The average price in the city hit a new all-time high of $968,318 – largely thanks to the surge of prices in both the detached and semi-detached house markets. Condos continued to trend down in price with an average price of $668,161 nearly unchanged from last year’s monthly average.  

As rent prices continue to decline for condos (down 15 – 20%), and supply continues to increase, buyers have ample options to choose from. With the holidays around the corner, we’ve advised many clients to hold off on plans to sell (if possible), and revisit listing in the second quarter of 2021.

Three Trends to Watch

  1. a second lockdown may be looming in the city, and with it could come a further hit to consumer confidence. Could this impact all housing styles?
  2. with rent continuing to decline, will condo prices continue to soften?
  3. What impact, if any, will this have on the pre-construction market?

DETACHED HOUSES

1,228 sales took place
67 more homes than the previous month (5.77% increase in sales)
194 more homes than the last year (18.76% increase in sales)
The average price of a detached home was $1,470,857
A decrease of $16,265 compared to the previous month (1.09% decrease in price)
An increase of $147,842 compared to last year (11.17% increase in price)

SEMI-DETACHED HOUSES

416 sales took place
5 fewer homes than the previous month (1.19% decrease in sales)
94 more than the last year (29.19% increase in sales)
The average price was $1,154,087
An increase of $8,528 compared to the previous month (.74% increase in price)
An increase of $54,285 compared to last year (4.94% increase in price)

TOWNHOUSES

409 sales took place
7 more homes than the previous month (1.74% increase in sales)
69 more homes than the previous year (20.29% increase in sales)
The average price was $828,090
A decrease of $39,915 compared to the previous month (4.60% decrease in price)
An increase of $32,975 compared to the previous year (4.15% increase in price)

CONDOS

1,438 sales took place
111 fewer condos than the previous month (7.17% decrease in sales)
137 fewer condos than the previous year (8.7% decrease in sales)
The average price was $668,161
A decrease of $18,030 compared to the previous month (2.63% decrease in price)
A decrease of $5,530 compared to the previous year (.83% decrease in price)

 

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Monthly Market Updates

Toronto Real Estate Market Report – July 2020

So much for a Summer slowdown!

Sales in the city were red hot in July – with a record-setting 11,000 + sales recorded for the month. We haven’t seen that much activity since April 2017. The average price of real estate in the city followed a similar trend hitting a new high (second month in a row) of $943,000. This represents an increase of nearly 17% compared to the same time last year… in a pandemic (crazy, I know).

You can thank the detached housing market for the increase in prices and sales – with a 2020 high of $1,540,000 up 1.3% from June and a whopping 25% from July 2019!

The price of semi-detached homes came down from last month’s high $1,287,000 to $1,181,000 – still up an impressive 20% from last year’s average of $981,000.

Condominium apartments had a lot more activity in July, with a 31% spike in activity than June. However, the increase in activity didn’t translate into much of a price jump, with average prices up only 1.5% compared to the previous month. Year over year, condos saw an 8.7%, which may sound good on its own – but was significantly less than the double-digit appreciation semis and detached houses recorded.

Demand for low rises (detached and semis) seems to be the trend during COVID. We suspect lower interest rates and backyards being the most significant driver to those looking to make a move.

DETACHED HOUSES

1,102 sales took place

208 more homes than the previous month (23% increase in sales)

236 more homes than the last year (27% increase in sales)

The average price of a detached home was $1,541,000

An increase of $17,000 compared to the previous month (1% increase in price)

An increase of $314,000 compared to last year (25% increase in price)

SEMI-DETACHED HOUSES

372 sales took place

109 more homes than the previous month (44% increase in sales)

96 more than the last year (34% increase in sales)

The average price was $1,181,000

A decrease of $106,000 compared to the previous month (8% decrease in price)

An increase of $199,000 compared to last year (20% increase in price)

TOWNHOUSES

393 sales took place

29 more homes than the previous month (8% increase in sales)

65 more homes than the previous year (20% increase in sales)

The average price was $852,000

A decrease of $3,000 compared to the previous month (.3% decrease in price)

An increase of $96,000 compared to the previous year (12% increase in price)

CONDOS

1,689 sales took place

402 more condos than the previous month (31% increase in sales)

72 more condos than the previous year (4% increase in sales)

The average price was $682,999

An increase of $10,500 compared to the previous month (1.6% increase in price)

An increase of $55,000 compared to the previous year (8.8% increase in price)

TRENDS TO WATCH

  1. July saw a lot more activity in the condo market, however, prices continued to hold near levels seen in late 2019/early 2020. If you’re a buyer, this is a great time to be looking at condos as competition is way down.

  2. With most universities and colleges offering online classes only, and out of country students not returning for the September semester, we’ll be watching the impact this has on the already hampered rental market. 

  3. Semis and detached continue to be the most desirable styles of housing in this post COVID world. We’re not seeing this change any time soon!
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Monthly Market Updates

Toronto Real Estate Market Report – May 2020

May traditionally marks the busiest month for real estate in Toronto… this year – not so much. Self-isolation,  social distancing, and the overall uncertainty of the future reduced much of the activity we typically see in May. However, activity did start to pick up towards the end of the month!

April marked the first month of full lockdown, and really set the benchmark for comparison purposes. It’s important to distinguish market activity with pre and post COVID-19 numbers to get an accurate pulse of where the market is heading.

In May – sales, listings, active listings and prices posted much higher numbers than in April. Sales and new listings doubled (over 50%), month over month, and the average price increased to $863,000 (an increase of more than 5%). Speaking from my own experience, I also witnessed a huge uptick in emails, calls and showings on my listings. 

Because context is important, now more than ever, it has to be said that May typically records the highest numbers of the year… but not so in 2020. 

On a year-over-year (YOY) basis: sales were down by over 75% and new listings by 54%. We also saw a 68% increase in days properties sat on the market – a clear indication of a much cooler May. Prices did see a small gain of nearly 3% compared to May 2019, but still much less than the double-digit appreciation we saw in Q1 (January, February and March) of this year!

Detatched Houses

  • 432 sales took place during the month of May
  • 119 more homes than the previous month (38% increase in sales)
  • 748 fewer homes than the previous year (63% decline in sales)

  • The average price of a detached home was $1,422,273
  • Up $172,543 compared to the previous month (13% increase in price)
  • Up $37,280 compared to the previous year (2.7% increase in price)

Semi Detached Houses

  • 164 sales took place during the month of May
  • 38 more homes than the previous month (30% increase in sales)
  • 244 fewer homes than the previous year (59% decline in sales)

  • The average price of a Semi-Detached home was $1,143,322
  • Up $46,000 compared to the previous month (4% increase in price)
  • Up $92,790 compared to the previous year (8% increase)

Town Houses

  • 164 sales took place during the month of May
  • 56 more homes than the previous month (51% increase in sales)
  • 202 fewer homes than the previous year (55% decline in sales)

  • The average price of a Town House was $794,626
  • Up $9,727 compared to the previous month (1% increase in price)
  • Down $1,463 compared to the previous year (0.18% decrease in price)

Condos

  • 727 sales took place during the month of May
  • 245 more sales than the previous month (50% increase in sales)
  • 1,102 fewer condos than the previous year (58% decline in sales)

  • The average price of a Condo was $674,028
  • Up $61,728 compared to the previous month (10% increase in price)
  • Up $31,137 compared to the previous year (4% increase in price)

TRENDS TO WATCH

  1. In April, the Government put a ban on short-term rental services (think AirBnB). As a result, we saw a lot more rental units come to market in the condo sector.  With an oversupply of available units, we saw rent prices come down significantly. The government has lifted its short-term restriction, so we’ll see the impact this may have on the supply of condo rentals.
  2. Canada Mortgage and Housing Corporation (CMHC) is in the process of announcing stricter lending criteria for anyone purchasing with less than 20% down. This could create a mini push for buyers into the market before the new rules take effect.
  3. Bidding wars are back. I’ve seen several houses sell way over asking (and market value) in the last few weeks. Much of this can probably be attributed to the pent up demand from months prior – curious to see if this continues into the traditionally quieter summer months!
Categories
Advice for Landlords

A Summary of Kathleen Wynnes Changes to the Real Estate Market in Toronto

Premier Kathleen Wynne, Finance Minister Charles Sousa and Housing Minister Chris Ballard announced plans to cool Ontario’s housing market.  We’ve summarized the proposed changes, and included our thoughts on how it we feel it impact the market:

Rent Control For All Tenants

Current rent controls, only apply to properties built prior to 1991 leaving many of Torontos downtown condos exempt from increase limits (currently set at the rate of inflation). The new proposals will now cover all properties regardless of when they were built.  

They are also looking into unlocking provincially owned surplus lands that could be used for affordable and rental housing development and a $125-million, five-year program to encourage the construction of new purpose-built rental apartment buildings by rebating a portion of development charges. 

These steps won’t really do much to add to the current lack of supply, and with the introduction of rent controls, will probably deter developers from ever actually building new rental stock.

I do think that rent controls are needed, but at rate higher than just inflation – something as simple as inflation plus 5% would result in only a $140 rate increase/month on a $2000 rental.  I was hoping the Liberal government would have introduced some controls on Hydro and Heat costs to help with monthly affordability for all!

Standardized Lease Document for all Tenants

This was briefly mentioned in todays announcement – Its purpose was to ensure “illegal terms and conditions” were not included in leases. I’m not entirely sure how they plan on handling this one as the Landlord and Tenant Board already has pretty specific guidelines that cover what can and can’t be included in leases.  Also, every rental provides its own unique set of challenges that require the crafting of pretty specific clauses. To have a standardized lease could leave both sides unprotected!

An Assignment Ban

The government wants to ban speculators from assigning their pre construction purchases before completion. It’s not clear how they plan on qualifying someone as a speculator vs. a buyer who’s outgrown their space before the project completes.

A typical project takes about 2-5 years to complete and in that time things can change.  I’ve worked with several buyers that have outgrew their initial purchase and wanted to sell before the project closed.  When buyers take this route, the often sell at less than market value, but for more than their original purchase price.

We don’t see very many properties sell by way of assignment as they are often tricky to complete and require builders approval before the sale can be finalized.  Those that do sell, often sell for less than market value (which helps those trying to get into the market)- so I’m not really sure how this will help with affordability.

Speculation Tax for Non-Resident Foreigners

Several reporters at todays announcement asked the officials for data to back up the claim that foreigners are buying up all these properties – but each time the question was avoided.  In reality, the government doesn’t currently collect this information. As part of todays announcements, all purchasers will now have to reveal their citizenship and where they live. Buyers will also have to disclose if the property will be used as primary residence or investment (something we already have to do when applying for a mortgage)

They also planned to introduce a 15 per cent tax on home purchases by non-resident foreigners… but of course, since they currently don’t have any real data on exactly how many foreigners are actually buying property at the moment – it’s hard to say if this actually take any competition out of the market.

Final Thoughts

I’m a bit relived that these aren’t the catastrophic changes some have speculated may happen. “This plan balances those needs to stabilize the market and prevent a sharp correction that would be harmful to everyone,” said Wynne. My take is that ultimately these measures won’t bring much change to Torontos real estate market. 

If you’re a buyer, things won’t be getting any easier anytime soon. You’ll still be faced with 5-20 people bidding for your “dream home”, with or without the foreigner tax.

Sellers, the climb continues (unless you’re trying to sell an assignment). Economics 101 teaches us that this price increase is fueled by a lack of supply and a ton of demand.  

Renters of properties built after 1991 who haven’t received a rent increase in the last 12 months – expect a price bump in the coming weeks.