The City of Toronto saw sold prices rise in the month of August with less properties reported sold as compared to the same time last year.
When reporting on the Toronto real estate market, many media outlets report on the sales statistics for the whole Greater Toronto Area that includes cities such as Mississauga, Markham & Oshawa.
In this fragmented real estate market of diverse areas and neighbourhoods its important to drill down to the property sales statistics for the City of Toronto rather than include all of the GTA as the more outlying areas of the 905 are seeing a greater slowdown with lower sale prices than that experienced in the 416.
In August 2480 properties were reported sold in the City of Toronto. This was 27% less than in August of last year when 3416 properties sold. However, the average sold price rose over 7% to $726,712 from last year’s $677,241.
Although August’s average sold price is substantially less than the record breaking average sold price of $943,947 achieved in April of this year, it seems that the trend of falling prices may have levelled off.
Since April, the segment of the market that has seen the sharpest decline in average sold prices and sales volume is detached houses in the City of Toronto. The number of detached houses that sold is down by almost 35%. However the average sold prices were off by just over 1% as compared to this time last year.
This means that on a statistical basis detached homes have given up all the price gains achieved leading up to the month of April and the province’s announcement that it would implement a foreign buyer’s tax of 15% of the sale price of properties.
It is not clear if all price gains achieved by detached properties have been lost. There just simply is not enough data to make this definitive determination.
In August 74 properties having a sale price of $2 Million or more were reported sold in the City of Toronto. Last August 120 properties in this category were reported sold. Almost all of these properties were detached homes.
Clearly when less luxury properties sell, the overall average sale price declines. It is not uncommon to see fewer high-end property sales in August.
The key question is were there fewer sales because these properties were not selling, or was it due to sellers not putting these properties on the market, and if they did, continued to hold out for higher prices. September’s data will go a long way in answering that question.
Although it is taking slightly longer for properties to sell in the City of Toronto, the pace of sales was still brisk in August. All sales took place in only 23 days. Last year all sales took place in 21 days.
Even detached properties in Toronto’s central core, which sold for an average sale price of $2,113,130, all sold in only 26 days. Semi-detached properties continued to move briskly selling in just 20 days.
In the case of semi-detached properties in Toronto’s east-end districts (Riverdale, Leslieville, Beaches) sales took place in only 15 days on average and for sale prices that exceeded the asking price on average by about 103%.
Although the number of condominium apartments sold has slowed year-over-year, condo apartments average sale prices have not. Last August the average sale price for a condo unit in Toronto’s central districts was a mere $493,324.
This August that same apartment will cost a buyer $600,781, an increase of almost 22%. In fact, the average sale price for condo apartments increased throughout the entire City of Toronto by more than 20% in August. Sales on the other hand were down by about 25%.
The decline in the number of condo apartment sales in August is due to two factors. Rising prices have made some units inaccessible to a growing group of first-time buyers, while shrinking inventories have lessened the choice available to those buyers that can afford to purchase Toronto’s ever more expensive condominium apartments.
In August there were only 2,353 units available for sale. Last August there were 2,850, a decline of 17%.
This is contrary to the overall market trend that sees listings of properties up 11% in the City of Toronto as compared to the same period last year.
Listings generally are beginning to decline in the City of Toronto. In August only 3603 new properties became available for sale, a decline of 20% compared to the 4480 properties that became available last year.
If this trend continues and if sales pick up there will be a rebound in average sale prices, not to the absurd price increases that were taking place in April, but annualized increases of 5% to 7% that are healthy and sustainable.
September’s performance will be a crucial month in providing some guidance as to how quickly the market will begin to see an increase in activity and healthy increases in average sale prices.
Now that two quarter point interest rate hikes have been factored into the market, it will simply be matter of seeing when buyers will take their finger off the pause button.
The fundamentals in the Toronto and area market remain sound and are growing stronger. Employment is growing, high levels of immigration to the region continue, consumer confidence is strong, and notwithstanding two interest rate hikes, by historical standards rates continue to remain low. All these factors point to a real estate market that should be stronger than what we are currently experiencing.
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.