Toronto’s real estate market has been seeing a mixed bag in terms of performance in recent times. TREB (Toronto Real Estate Board) has recently released its overall assessment of market performance in the GTA (Greater Toronto Area). Home sales volumes have come down in the GTA for February 2019 as compared to February 2018 although the average selling prices are higher going by TREB reports. TREB has noted 5,025 home units being sold in the GTA for February 2019 which is lower than February 2018’s tally of 5,148 units in sales volumes.
The average selling price for homes has gone up from $767,801 in February 2018 to $780,397 in February 2019 as per reports. There was a drop of 2.4% in the sales figures of homes for the Greater Toronto Area overall according to TREB while the number of new home listings came down by roughly 6.2%. The new listing count touched 9,828 units for February 2019 which is lower than 10,473 units listed in February 2018. TREB has stated that overall conditions in the GTA real estate market are much tighter at the moment as compared to last year and this may be the reason behind the lower number of listings and slight drop in sales volumes.
However, resale home prices went up by 1.6% in the Toronto area on a year on year basis for February 2019 to touch $780,397 as an average for multiple home types in spite of factors like ice and snow accumulation which led to lower listings overall. This may also be a reason behind the lower sales figures as per several experts.
Other key market trends worth noting
There was tangible growth observed in case of the semi-detached home category and also for condos which continue to be hot property in the GTA real estate market. Prices of semi-detached homes went up by around 7.5% to touch $794,978 as a regional average mark. For the City of Toronto, the average price for semi-detached homes touched around $1 million as per reports. Prices also went up by 6.9% on a year on year basis for the condo segment with the regional average pricing going up to $555,986.
However, detached home unit sales volumes lowered by 9.4% in the City of Toronto as compared to sales figures increasing by 5.2% in the 905 zone based communities nearby. However, detached home prices came down by 2.4% throughout the entire region to touch an average of $963,618. The average pricing for a detached home in Toronto came down by 3.3% on a year on year basis to touch $1.2 million. There is more competition for homes in the City of Toronto with multiple offers being seen for single housing units and there are pre-emptive bids which are also tailored to spur sales prior to the date for the listed offer. There is a lot to do with snow being cleared off the grounds in the entire region as per several experts, after which the momentum will naturally pick up in the entire property market. Inventory levels may witness a steep jump in the near future and there are home inspections and consultations going on in full steam at the moment and everyone is reportedly awaiting the conclusion of the March break.
There should also be a major increase in the buyer count since many people have been waiting it out to see whether prices will come down or not and they are now accepting the fact that this will not be happening as per expectations. Several buyers, according to experts, have also gained more confidence with no further increases in the rates of interest. In the meantime, property sellers are also accepting the fact that 3-5% annual increases are par for the course now in this real estate market as compared to increases in the double digits. There are now people who are selling homes based on several lifestyle factors. There are several people who are now deciding to renovate homes and reside within a 5-6 block radius from their current residences. These are people who are selling homes in larger numbers at present according to experts.
There are several buyers with ample disposable income to afford properties in downtown Toronto. Experts have also stated that in case the budget witnesses an extension of amortization durations to 30 years from 25 years, there will be a larger number of first-time homebuyers seen in the market and due to the subsequent higher sales volumes, prices may eventually increase in the entry level price band of roughly $700,000. This is the best performing market segment as per experts and once homes cross the $1 million threshold, they pose an entry barrier to first-time homebuyers according to them.
Growing costs in premier neighbourhoods are also a factor worth considering with several buyers moving towards neighbourhoods which are comparatively affordable. For instance, many buyers are looking at properties to the eastern zone of Victoria Park which are comparatively affordable than the western half. Bungalows located at East York are also comparatively more affordable as per experts than bungalows located at Scarborough. TREB has also stated that vacancy rates hover around 1% in the GTA (Greater Toronto Area). TREB has also stated that rentals for apartments on the MLS (Multiple Listing Service) have gone up by 8.1% to stand at $2145 as an average for a one-bedroom. Two-bedroom rentals have increased by 7.4% on a year to date basis to touch an average figure of $2,810 according to reports.