The May real estate sales stats reveal that property sales in the City of Toronto continue to remain strong while the regions of the 905 are not faring as well. Given this discrepancy in market performance between these two distinct market places it becomes extremely important to separate out and focus on the sales data for the City of Toronto rather than look at the Greater Toronto Area as a whole.
In May the average sold price for property in the City Of Toronto was $862,000. This is down only slightly from the same time last year when it was $899,000.
All properties (including condominium apartments) sold in only 16 days, and impressively, sold for 101% of their list price. In the eastern districts located closest to the central core (Riverdale, Leslieville, Beaches) all properties sold in just over 8 days, at more than 110% of their asking price. These are some remarkable statistics that are generally ignored by the daily newspapers and articles related to the Toronto and area marketplace.
The one weakness of the real estate market in the City Of Toronto is property sales over $2 Million. Sold prices for high-end properties have not yet returned to the levels we saw in early 2017.
This May was marked by lower sold prices and fewer sales of luxury properties. The average sold price for a luxury property in May was $2.832M, down 11.3% from May 2017 when it was $3.194M.
173 properties having a sale price of $2 Million or more was reported sold. This compares poorly with the 265 luxury properties reported sold in May last year and represents a 35% reduction in year-over-year sales volume.
The explanation for this decline is many-fold. Last year, on the obsessive belief that house prices would continue to skyrocket, high-end average sales prices reached unsustainable levels. Since then here have been 3 mortgage interest rate hikes, and banks are now applying more restrictive stress testing on all properties. The 15% foreign buyers tax is playing some role in this scenario, but less significant than the provincial government’s perception.
All of these factors have had a strong psychological impact on buyers. They are clearly waiting to see if prices will continue to fall at the high end. That hesitation has resulted in the sharp drop in sales in this price category. However, as May’s results for the City of Toronto indicate, the market is improving which will have an ameliorative impact on the psychological hesitation of buyers in this price category.
Inventory levels are becoming a concern in the City of Toronto. Last year there were 5,779 active listings at the end of May, a period of severe inventory shortages. This year there are only 5,797. Although the difference is marginal, it represents a pattern that has been emerging. Declining inventory will lead to rising prices and hyper competition for good properties in desirable neighbourhoods.
Condominium apartment inventory is also declining. Last year there were 2,509 active listings at the end of May. This year there are 2,552. Again, the difference is insignificant but a declining pattern is emerging. This is very concerning because condominiums apartments remain the most affordable housing in Toronto, at least for the time being. Prices for condominium apartments have been increasing. The average sale price for condominiums apartments in Toronto is now $602,000 and a stunning $671,000 in the central core. Considering that 64% of all apartment sales in Toronto are in the central core, affordability is now becoming a concern, even for condominium apartments.
Looking forward to June, it’s possible to see a market place that once again can be favorably compared to last year. The initial impact of the Ontario Fair Housing Plan measures will be history and next month’s chart will look much smoother than the one below.
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.