The residential resale market in the City of Toronto continues to pick up as April marked the fourth month in a row of higher sold prices. In January, the average sold price for a property in the City of Toronto was only $766,616 while in April it came in at $865,817. Toronto’s average sold price has increased by almost 13% in 4 months.
A year ago the average sale price hit an all time high of $943,947. While the market in the City has not recovered to where it was in April 2017, it is definitely showing signs of strong improvement.
The fundamentals that drove up the market in early 2017 still apply as the City continues to experience a low unemployment rate and a growing economy. People continue to migrate to Toronto which contributes to lower property supply and higher buyer demand.
What has changed since April 2017 is that we now have had 3 mortgage interest rate hikes and a new more rigid stress testing for mortgage qualification has been implemented. Yet despite these added pressures, the Toronto real estate market continues to recover.
The average sale price of $865,817 is for all types of properties sold in the City of Toronto, including condominium apartments. The cost of a detached property rose to $1,354,719, while semi-detached homes came in at $1,021,986.
These numbers are starting to approach the numbers that the market was producing last year. Year-over-year sale volumes are down by 34% and 16% respectively, but in the case of semi-detached properties this is a product of supply and not demand. In some of Toronto’s trading area there were no reported sales of semi-detached properties. That’s because there were no listed properties for buyers to buy.
The strength of the market is profoundly demonstrated by the short time periods that detached and semi-detached properties remained on the market. All detached properties sold in only 17 days and for an amazing 101% of their asking price. All semi-detached properties sold in an eye-popping 13 days and for a startling 106% of their asking price. These numbers are only slightly short of what was happening last year.
Condominium apartment prices have risen consistently, even through the downturn in the market following the announcement of the Ontario Fair Housing Plan in April of last year. In April, and for the first time, the average sale price for all condominium apartments sold exceeded $600,000 coming in at $601,211.
In Toronto’s central core, where more than 67% of all sales take place, the average sale price reached $667,345. Toronto’s most affordable housing form is rapidly becoming less affordable. Not only did condominium apartments sell with growing average sale prices, but they all sold in only 16 days and at 101% of their asking price. In the central core they also sold at 101% of their asking price and in only 15 days.
Condominium Apartment sale prices are, like other housing forms, being driven by a sever lack of supply. At the end of April there were only 2,130 apartments available to buyers, a little more than one month’s supply. Last year at the height of Toronto’s frenzied market there were 2509 condominium apartments on the market, a year-over-year decline of available inventory of more than 15%.
The high-end market has been the only laggard in Toronto’s resale market. Year-to-date only 445 properties having a sale price of $2 Million or more have been reported sold in Toronto. Last year 962 had been reported sold, a decline of more than 53%.
The Toronto marketplace is beginning to send out two powerful messages.
Firstly, the foreign buyers tax that was part of the Ontario Fair Housing Plan was directed towards a non-existent enemy.
There were no hordes of foreign buyers buying Toronto real estate. There were no barbarians at the gate. That has been subsequently verified by not only the provincial government, but by other sources, namely the Toronto Real Estate Board and CMHC.
Secondly, the Toronto resale market is being driven by local, domestic forces.
That being the case, governments should abandon any attempt to engineer the marketplace and focus on measures that will help the increase of supply.
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.