Market Report

Chestnut Park Real Estate Market Report for September 2017

September marked a change in the Toronto residential market place. For the first time since April, the average sale price for all properties sold in the greater Toronto area actually rose.

The monthly average sale price had been on a downward spiral ever since the provincial government announced the introduction of a 15 percent foreign buyers tax on April 20th.

Whereas the overall market was o by more than 35 percent compared to last year, the 416 trading area had only declined by 29 percent. The 905 trading area did not fair as well, with sales o by almost 40 percent. The same is true for average sale prices.

As indicated above, the monthly average sale price for the greater Toronto area was $775,546, up 2.6 percent compared to last year. On an unweighted basis, the average sale price for all properties sold in the 416 region increased by almost 10 percent compared to last year. In the 905 the increase was slightly less than 6 percent. So clearly the numbers emerging from the 905 region are acting as a downward drag on the results of the overall resale market place.

But even within the 416 trading districts there are regional differences. Sales of detached properties were down by 41 percent in September. The volume of semi-detached properties sales was down by only 15 percent, and 23 percent for condominium apartments. Average sale prices for detached and semi-detached properties rose by 4 and 5 percent respectively compared to September 2016, whereas condominium apartment average sale price rose by 24 percent compared to last year.

Notwithstanding the negative press concerning the Toronto resale market place and its “collapse”, house prices in Toronto continue to be very expensive, but given prevailing interest rates, still sustainable. In September the average price for a detached home in Toronto’s 416 region was $1,355,234. The cost of a semi-detached home was not far behind at $935,467. Even condominium apartments are becoming pricy. In September, the average price for a condominium apartment was $554,069. In Toronto’s central districts, where most of Toronto’s condominium apartment towers are located, the average price for a condominium apartment was $615,654. There were 917 sales in this category, almost 1/6 of the total inventory of properties sold in September. Notwithstanding these elevated prices, all the condominium apartments sold for 100 percent (on average) of their asking price.

On the freehold side, the region just to the east of the central core, comprising the neighhourhoods known as Riverdale, Leslieville, and the Beaches, continues to trade as if the downturn experienced everywhere else in the greater Toronto area miraculously missed it. In September all detached properties in these areas sold for almost 104 percent of their asking price and in a mere 14 days. Semi-detached properties moved even faster. Semi-detached properties in these neighbourhoods sold in just over 8 days and for sale prices that exceeded the asking price by more than 105 percent. The average sale price of detached and semi-detached properties reported sold in these neighbourhoods was $1,286,000 and $928,000 respectively.

Over the last 5 months the market has moved from an insane seller’s market to a more nuanced, balanced market (except of course in Riverdale, Leslieville, and the Beaches). In September, 16,469 new properties came to market, an increase of more than 9 percent compared to the 15,050 that came to market last year. At the end of September there were 19,021 properties available to buyers, a stunning increase compared to the paltry 11,255 available last year. In percentage terms, availability has increased by 69 percent, year-over-year.

Needless to say, with an increase in supply, both average days on the market and months of inventory have increased dramatically. Year-over-year days on market have increased from 16 to 24 days. Months of inventory, calculated on a 12 month moving average is now 1.5 months for the greater Toronto area. Months of inventory, using September data, is more like 3 months, a much more accurate reflection of the market than the 12 month moving average.

The market is normalizing. It will continue to improve moderately, as year-end approaches. Sellers hoping for the heady days of January through April will be disappointed. In addition to assimilating the impact of the foreign buyers tax, the Toronto market has had to contend with two quarter-point mortgage interest rate hikes, and potentially more to come. There is also the looming threat of additional stress testing which the Office of the Superintendent of Financial Institutions has proposed. All of these factors will have a moderating effect on the residential resale market going forward.

Prepared by:Chris Kapches, LLB, President and CEO, Broker 


Chestnut Park Real Estate Market Report for August 2017

There were no surprises in the market data for the month of August. It was expected that as compared to last year the number of reported sales would be down, and that the average price from residential resale properties in the greater Toronto area would once again decline. There were 6,357 properties reported sold in August, almost 35 percent fewer than the 9,748 properties reported sold last August. It should be remembered the sales reported last August were record breaking in a record breaking year.

Last year 113,044 properties changed hands, by far more than any other year in Toronto real estate record keeping. The good news is that notwithstanding the size of the decline it was less dramatic than the months of June and July. The average sale price came in at $732,292, 3 percent higher than the average sale price of $710,978 achieved in August last year. Although August’s average sale price for all properties sold in the greater Toronto area is substantially less than the record breaking average sale prices achieved in April of this year, it would appear that the decline in prices may have plateaued.

Throughout the month weekly average sale prices were consistently around $730,000. In the City of Toronto detached properties have seen the sharpest decline in sales volume and in average sale prices. Sales volume on a year-over-year basis is down by almost 35 percent. (It should be noted that in the 905 region sales volume is down by almost 42 percent).

Average sale prices were o by just over 1 percent. 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 percent 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 132 properties having a sale price of $2 Million or more were reported sold.

Last August 233 properties in this category were reported sold. Almost all of these properties were detached homes. Clearly when fewer properties in the highest price categories are selling, the over-all average sale price will decline. It is not uncommon to see fewer high end 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 longer for properties to sell, the pace of sales was still brisk in August. All sales took place in only 23 days. Last year all sales took place in 18 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 13 days on average and for sale prices that exceeded the asking price on average by about 104 percent. Although condominium apartments sales have slowed year-over-year, condominium apartments average sale prices have not. Last August the average sale price for condominium apartments 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 percent. In fact, the average sale price for condominium apartments increased throughout the entire City of Toronto by more than 20 percent in August. Sales on the other hand were down by about 25 percent. The decline in condominium 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 2,950, a decline of 21 percent. This is contrary to the overall market trend which sees listings of all properties up an eye-popping 65 percent compared to the same period last year. Listing generally are beginning to decline. In August only 11,523 new properties became available for sale, a decline of almost 7 percent compared to the 12,346 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 percent which 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.

Prepared by:Chris Kapches, LLB, President and CEO, Broker

Chestnut Park Real Estate Market Report for March 2017

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March residential resale numbers were staggering, in every category. More than 12,077 homes changed hands in March, up almost 18 percent compared to the 10,260 that were reported sold last year. In comparing 2017 against 2016 it must be remembered that 2016 smashed all records for residential resales. (Click the image to the left for a pdf version)

The most daunting statistic emerging for March’s data is the average sale price for all properties sold. The cost of the average home in Toronto in March came in at $916,567, an eye-popping 33.2 percent higher than what the same home would have cost a buyer in March 2016. In absolute numbers a buyer looking to buy the same home he considered buying last year would now have to pay an almost impossible $228,000 more for the same property. Not only would that fictitious buyer have to pay substantially more, he would have to act quickly because all of the 12,077 properties that were reported sold in March were on the market for only 10 days (on average). Staggering is the only word for these year-over-year numbers.

Prices were even higher for detached and semi-detached properties. A detached home in the City of Toronto will now cost a buyer $1,561,780. A semi-detached home is not far behind, coming in at $1,089,605. In Toronto’s central districts the numbers are substantially higher. The average sale price for a detached property was $2,450,955, while a semi-detached property in Toronto’s central districts came in at $1,410,702. The 105 properties that sold in this category of homes in March sold in only 7 unbelievable days. Even condominium apartments in the central core of Toronto are beginning to reach lofty heights. The average sale price for condominium apartment sales in March was $615,880. Only a year ago their average sale price was only $484,000. And like their free-hold counterparts condominium apartments in March sold in only 11 days and at 108 percent of their asking price.

The greater Toronto area’s definition of what constitutes a luxury property may, at this pace, have to be augmented. In March, 632 properties were reported sold having a sale price of $2 Million or more. Once again the comparison to 2016 of properties sold in this category is staggering. Last year there were only 228 properties in this category, and in 2015 a mere 132.

The debate that is now consuming politicians, economists and real estate experts is all about the causes of this supercharged Toronto housing market. The real estate industry is strongly of the view that the problem can be distilled to one word – supply! March’s inventory numbers support this position. At the end of March there were 7,865 properties available to consumers to buy. That’s more than 35 percent fewer properties than were available to buyers in 2016. Although 17,051 new listings came to market in March, an increase of 15 percent compared to last year, the greater Toronto’s inventory levels remain perilously low.

Economists see Toronto’s real estate problems as being created and driven by demand. The frenzied demand, as it has been characterized, is being driven by, and in no particular order, foreign investors, primarily Asian, speculators, and local demand by those buyers who believe that if they don’t get into the market today they may never be able to do so. One shouldn’t forget mortgage interest rates. At only 2.65 percent (or lower) for a five year term, rates are at all time historical lows.

It is becoming clear that there will be political intervention, and it will be soon. At the time of preparation of this Report Ontario Premier Kathleen Wynne announced that the province intends to introduce a package of measures to address home affordability in Toronto. The following legislative tools are within the Province’s arsenal. It can impose a speculation tax on buyers who buy and flip properties within short periods of time, perhaps 2 to 4 years. This tax could apply to all properties or just non-principal residences. A tax on foreign buyers similar to that introduced in British Columbia in 2016, and/or develop a progressive property tax for foreign buyers requiring owners who own homes in Ontario but do not live or work in Canada to pay annual property tax surcharges. The Province could also prohibit non-residents of Canada from buying resale homes.

It is a certainty that the provincial government will expand rental controls. Currently rental properties built after 1991 are exempt from the rent controls embodied in the Residential Tenancies Act. But will provincial (or federal or municipal) intervention cool the Toronto housing market? Any regulatory intervention will, in the short term, cause the market to slow. Any legislation related to foreign buyers will deter some foreign buyers, perhaps deflecting them to other Canadian jurisdictions. Domestic buyers may also take a “wait and see” approach to the market. Ultimately, any measures taken by the provincial government will be temporary in nature and there is little likelihood that prices for homes in Toronto will decline.

The Toronto market place is being shaped by global factors as much as local factors such as supply and low mortgage interest rates. The world as we know it is shifting from being predominately rural to urban. Cities will continue to grow, and some more than others. The world is riddled with corruption and instability and uncertainty is at its highest level since 2007. In this environment of global uncertainty investors are less likely to invest speculatively. They will look to jurisdictions and locations where their investments will be safe and certain, even if their returns are minimal or even flat. Cross border capital is flowing into established, certain, and safe economies. The greater Toronto area satisfies all of the above-noted investor requirements. Combined with annual immigration of 100,000 people, Toronto and the politicians, economists and realtors who are constantly attempting to understand the current market, should anticipate that the residential resale market will continue to be driven by these geopolitical factors, notwithstanding government intervention.

Chestnut Park Real Estate Market Report for December 2016

thumb Another record breaking year for the Toronto and area residential resale market. In 2016 113,133 properties were reported sold. This number shattered the previous record of 101,213 properties sold in 2015. That makes two consecutive years in which Toronto and area sales have exceeded 100,000. Prior to 2015 reported sales had not even come close to that number. The previous record was 93,193 properties sold. That was in 2007. (Click the image to the left for a pdf version)

Although the most recent sales results seem remarkable, given Toronto’s population growth throughout the early years of this millennium, they should have been anticipated. The Toronto and area population has been growing by about 100,000 new immigrants annually. Households have been increasing by approximately 30,000 annually. Since 2007, when the then record of 93,193 sales was achieved, at least 300,000 new households have been created in the greater Toronto area. These households need shelter, a place to live, either as homeowners or as tenants. The supply of new housing in the greater Toronto area has not come close to meeting household needs. Consequently almost everything that has become available for sale has sold, and as the supply dwindles, for higher and higher prices.

Even in December, which until the last few years has historically been a slow sales month, the resale data related to the market is startling. For example: in December 526 detached properties were reported sold in Toronto, a decline of 7.6 percent compared to December 2015. The decline in semi-detached property sales is even more shocking. A decline of 11.5 percent, with only 138 properties reported sold. However where the surprise and related concern arise, is in the inventory levels available to buyers in these two categories of housing types moving to January 2017. In the case of detached properties only 488 active listings are available to buyers. In the case of semi-detached properties only 77. In both instances the number of properties available to buyers is less than the number of sales that occurred in December. Translated into months of inventory that would equate to 0.9 and 0.6 of inventory respectively.

The only housing type that showed a positive variance at year end was condominium apartments. Condominium apartment sales were up by 19.5 percent in December on a year-over-year basis. But even in this category, there are troubling signs of inventory shortages ahead. In December, in Toronto, 1,238 condominium apartments were reported sold. However, moving into January there are only 1,277 active listings for condominium apartments, or roughly one month of inventory.

Under these circumstances it is not surprising that average sale prices sky-rocketed in 2016. December’s average sale price came in at $730,472 or 20 percent higher than the year-over-year average sale price of 608,714. Can you imagine the shock that one would experience if they had lived abroad since 2014 and had returned to Toronto and were looking for a house or condominium apartment to buy. That same fictitious house they could have bought in 2014 for $566,000 now costs $730,000, an increase of 29 percent, and these numbers include condominium apartments.

In December the average price of a detached house was$1,286,605. The average price for a semi-detached house, if a buyer could find one for sale, was $808,920. In Toronto’s central districts the numbers are even more dramatic. The average price for a detached house came in at $2,058,876, while the average price for a semi-detached house broke the $1 million mark at $1,058,544, and this was in December.

Overall 5,338 properties were reported sold in December. This number would have been much higher had inventory levels been higher, a 8.6 percent increase compared to the 4,917 properties sold in December 2015. Across the greater Toronto area there are only 1.1 months of inventory, and in some of Toronto’s trading districts there are less than 1 month of inventory. For example two of Toronto’s eastern districts comprising Riverdale, Leslieville and the Beaches have only 0.7 months of inventory heading in 2017. Overall, across the greater Toronto area, we enter 2017 with 48.1 percent fewer active listings than we had last year. The actual numbers are eye-popping. We enter 2017 with a paltry 4,746 active listings of all property types. To put this number in context it must be remembered that there were 5,338 sales in December, 12 percent more sales than the total available inventory.

Based on the resale data available at the end of 2016, the beginning, and perhaps all of 2017, might be a different market than we witnessed in 2015 and 2016. We may witness negative variance sales numbers as compared to past years. This would be the first time this has occurred since 2008, when the equity markets imploded. The reason for this negative variance can be summed up in one word: supply.

With the supply side of housing being so low, it is inconceivable that sales can outpace 2016, notwithstanding the demand. Unless a plethora of new listings come to market in the early part of this year, and there is no current reason to believe that this will happen, year-over-year sales will decline, even though prices will continue to increase. This may result, in time, in the market stabilizing to some extent. Prices may reach levels that make affordability a problem which in turn may cause properties to remain on the market longer, thereby increasing the supply. Over the longer term that might result in price stabilization.

But where are those 100,000 new immigrants locating to the greater Toronto area annually going to live?


Chestnut Park Real Estate Market Report for September 2016

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As the month of September comes to an end, the two major concerns about Toronto and area’s resale market are declining supply, to critical levels, and rapidly rising home prices. Both have been issues throughout 2016, but they have now become hot points that are attracting the attention of government and potential government intervention. (Click the image to the left for a pdf version)

As we enter October, the greater Toronto area had only 11,255 available properties for beleaguer buyers to find, inspect and purchase. This is a startling 36.6 percent decline compared to the 17,765 resale properties on the market at this time last year. Unfortunately, what has not waned over this same period is buyer demand. With about 100,000 people making their way to the greater Toronto area every year there simply is not enough existing and new housing coming to market to meet the need of Toronto’s growing population.

With the combination of low inventories and buyer demand (and don’t forget about the historically low mortgage interest rates we are experiencing) the pressure on prices has been unprecedented. In September Toronto and area’s average sale price came in at an all time monthly high of $755,755, exceeding the previous record of $752,278 achieved in May of this year. What is even more significant is that this average sale price is 20.4 percent higher than the average sale price for all property sales reported in September 2015. In only one year the house that you could have bought for $627,867 last year will now cost you almost $130,000 more. Salaries have not increased by a comparative amount.

But $755,7555 is simply the average sale price. It includes all property types, including the less expensive condominium apartments. In the City of Toronto, a detached property sold (on average) for $1,294,482 in September. Semi-detached properties were not far behind coming in at $884,916. In Toronto’s central districts detached and semi-detached properties are even more expensive. A detached property (on average) now costs $2,214,998. A year ago that property could have been purchased for $1,688,581, an eye-popping difference of over $436,000. The average price for semidetached properties in Toronto ‘s central district came in at $1,181,647. Last year that same property was selling for $956,480.

It is not surprising that under these circumstances that detached and semi-detached properties are selling at lightning speed. Notwithstanding that detached properties throughout the City of Toronto were selling for almost $1,300,000, they all sold in just 13 days. Even Toronto’s central districts, where detached homes were selling for over $2,000,000, all detached properties sold in only 14 days after having been placed on the market.

In Toronto’s eastern districts detached and semi-detached properties sold even quicker, in 11 and 8 days respectively. These are rates of sale never before witnessed in the Toronto resale market place.

Although condominium apartment sales are also increasing, sale prices are not increasing at the same pace as detached and semi-detached properties. In September condominium apartments sales in the City of Toronto increased by almost 25 percent, a pace significantly higher than the overall increase of sales in September (21.5 percent). The average sale price of condominium apartments increased by 6.5 percent over the same period, far less than detached (23 percent) and semi-detached properties (19.7 percent).

The available stock of resale condominium apartments is dwindling quickly. As supply and prices of detached and semi-detached properties climb out of reach of most buyers, the only alternative, short of moving to another city, is a condominium apartment. The only problem is that their availability is shrinking even faster than that of detached and semi-detached homes. Last September there were 6,659 condominium apartments for sale in the greater Toronto area. This September there were only 3,965, a 40 percent decline. In the City of Toronto there were 4,818 apartments available to buyers in September 2015. This September the availability of condominium apartments is in free fall with only 2,819 on the market, a decline of more than 41 percent in only one year. As a result, the average days on market for condominium apartments dropped from 32 to 25 days in the greater Toronto area and from 31 to 24 days in the City of Toronto. If a buyer is prepared to go to the eastern reaches of Toronto, there are still apartments for sale for less than $250,000 and in some rare cases for less than $200,000.

At the other end of the market sales continued as brisk as ever. In September 297 properties having a sale price of $2 Million or more were reported sold. This compares with only 154 last year in this category, an increase of more than 90 percent. The bulk of this sales were detached homes. Ten of the reported $2 Million plus sales were condominium apartments.

As we head into October the months of available inventory have shrunk to record lows. In the greater Toronto area there are only 1.3 months of inventory. In the City of Toronto the number is higher at 1.6 months of inventory. Inventory levels in Toronto are higher due to the number of available condominium apartments, though more plentiful than detached and semi-detached properties, they are decreasing rapidly. At the end of September the Federal Finance Minister announced a number of measures that would have the effect of preventing Canadians from taking on more debt simply because mortgage rates are so low. Effective October 17, borrowers requiring insured loans will be stress tested not on the discounted rate available but on the posted rates. For a five year fixed term, the difference is slightly more than 2 percentage points. These new stress tests will only apply to borrowers with less than 20 percent deposits and for properties that have a value of less than $1 Million. Effectively the new mortgage guidelines will have their greatest impact on first time buyers. After October 17 they will either have to buy less expensive properties requiring smaller loans, or drop out of the market.




Chestnut Park Real Estate Market Report for August 2016

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As we enter the traditional fall market, the big story in Toronto is inventory shortage. At the end of August there were only 9,949 residential properties available to buyers, a number only slightly higher than the 9,813 properties reported sold in August. This is a historic low. For the past few years it was the historically low interest rates that were having the greatest effect on the re-sale market in the greater Toronto area. The inventory shortage has now been added to that mix. The information contained in this report is driven by these two factors: a lack of inventory and cheap borrowing. (Click the image to the left for a pdf version)

In August there were 9,813 reported sales of residential properties. This represents an eye-opening increase of 23.5 percent compared to the 7,943 reported sales last year. There was a time when sales slowed in July and August, the traditional summer vacation months. That is obviously no longer the case.

The dramatic rise of monthly sales, especially in 2016, has reduced the available inventory of properties for sale to a mere 9,949 houses and condominium apartments. This represents almost a 38 percent decrease in the number of available properties compared to the end of August in 2015. Last August there were 15,997 properties available for sale, and even that number was insufficient to meet buyer demand.

With so few properties available to buyers it is not surprising that residential properties sold quickly in August, and for strong sale prices. In August the average sale price for all properties reported sold in the greater Toronto area came in at $710,410, almost 18 percent higher than last August’s average sale price of $603,534. It is not surprising that buyers are frantic to get into the market. In only one year the same property that was available last year will now cost a buyer $106,876 more than if he purchased the same property last August.

The speed at which sales are taking place is astounding. In August all properties (on average) sold in only 18 days, a 21.7 percent decrease from the 23 days it took last year. Even at 23 days the pace is lightning speed. At 18 days, in real estate terms, it is practically the speed of light. Some housing types and some neighbourhoods saw sales take place at an even faster pace.

All detached houses in the City of Toronto sold in only 16 days. All semi-detached properties sold in 13 days. In the greater Toronto area all semi detached properties sold in only 11 days. Not only did all residential properties sell quickly, but for the most part sold in excess of their asking price. All properties sold in the greater Toronto area sold for 105 percent of their asking price. All properties reported sold in the City of Toronto, which includes condominium apartments, sold for 106 percent of their asking price. These statistics have become common place for Toronto and the G.T.A. but would be viewed as unbelievable in any other jurisdiction.

Even condominium apartments sales are taking place at a furious rate. Multiple and even pre-emptive (“bully”) offers are becoming common place in the condominium apartment sector. Once in plentiful supply, the condominium apartment inventory is also shrinking. In August there were only 4,043 condominium apartments for sale in the greater Toronto area. In the City of Toronto there were only 2,850. The reduction in condominium inventory in only one year is shocking. Last year there were 6,420 condominium apartments available to buyers in the greater Toronto area, and 4,608 in the City of Toronto. In percentage terms, the decrease in available condominium apartments in the City of Toronto in only one year is almost 40 percent.

Although condominium apartments are not selling as quickly as freehold properties, they are selling very close to their list price, namely 99 percent, and higher in some sub-districts. Days on market for condominium apartments has also dramatically declined, now down to only 25 days in the City of Toronto. With these numbers in mind, it is not surprising to note that condominium apartment sales were up 33.5 percent compared to last year, a much higher percentage than detached and semi-detached properties. This is due to the fact that there are comparatively more condominium apartments for sale as compared to detached and semi-detached houses, and they are also comparatively less expensive. In the City of Toronto, the average sale price for a detached house came in at $1,206,637, and if you could find a semi-detached house, at $774,700. By comparison the average price for a condominium apartment was only $446,612, and even less expensive in the 905 region.

At the other end of the housing scale, the number of high end property sales is also increasing, and dramatically. In August there were 233 properties reported sold that had a sale price of $2 Million or more. This represents a 111 percent increase over the 110 properties reported sold in this price category last year. Most of these properties were detached homes, although 10 condominium apartments also sold for $2 Million or more.

As we head into September with only 1.4 months of inventory in the greater Toronto area, and 1.7 months of inventory in the City of Toronto (thank heavens for condominium apartments), conditions will become even more severe for buyers. Buyers can anticipate continually rising prices, sales that take place at the speed of light, and competition for almost any property that becomes available for sale, particularly detached and semi-detached properties.




Chestnut Park Real Estate Market Report for April 2016

April’s market report could be a replica of March’s report. We continue to run out of superlatives in attempting to describe the Toronto area residential resale market. As they did in March, average sale prices continue to go up, days on market continue to decline, the inventory of available properties is evaporating, and buyer demand cannot be satisfied. Records in almost all categories are being broken monthly. Click on the image on the left for a pdf of the report. (Click the image to the left for a pdf version)

In April the average sale price for all properties sold in the greater Toronto area came in at a breath-taking $739,082, a new monthly record. That’s 16.2 percent higher than the $639,064 that the same house would have sold for in April 2015. Semi-detached and detached houses are substantially more expensive. The average price for a semi-detached house in the city of Toronto in April was $901,159, 23.8 percent more than a similar property would have sold for in 2015. A detached house will now cost a buyer $1,257,958, 18.9 percent higher than a similar property sold last April. In central Toronto the numbers are even higher. A detached house now costs $1,730,000, and buyers must now pay almost $1 Million for a semi-detached house. A semi-detached house in Toronto’s central core now costs $975,640. These are all new record highs.
Surprisingly, given the high prices that properties in Toronto are selling for, they are also selling in record time. All properties that sold in the greater Toronto area did so in only 15 days. That is a number that in almost any other jurisdiction throughout the world would be regarded as incomprehensible. Not in Toronto.
Semi-detached properties sold even faster. All semi-detached properties were reported sold in only 10 days. In central Toronto it took only 9 days for semi-detached properties to sell and although it may sound unbelievable, all semi-detached properties in the eastern districts sold in only 7 days. Detached houses sold just as quickly. Only 12 days on market for all detached properties sold in Toronto. All of these numbers are new records for sales in the Toronto resale market place.

List prices for properties in Toronto are apparently no longer relevant. They are merely a starting point. All detached properties reported sold in Toronto sold for 107 percent of their asking price. In some trading districts the sale price to list ratio was as high as 117 percent. Semi-detached properties in Toronto sold for 110 percent of their list prices. In Toronto’s eastern districts they sold for 113 percent of their asking price. Again, all these numbers are new record highs.

A drought in inventory is having a direct impact on sales. At the end of April there were only 12,554 properties available for sale in the entire greater Toronto area. This is almost 27 percent fewer properties for sale than there were last year at this time. This is only 1.6 months of inventory. A balanced market is approximately 4 months of inventory. It’s not an easy market for buyers.
The only available, accessible shelter for buyers is condominium apartments, and even that market sector is becoming tighter. In the city of Toronto condominium apartment sales increased by 17.4 percent compared to April 2015. The average price for condominium apartments has increased throughout 2016. In Toronto’s central districts the average price for condominium apartment increased to $484,482. It is interesting to note that the average days on market for condominium apartment, is also dropping. In April average days on market for condominium apartments was only 25, a dramatic decline from the 35 plus days on market only a year ago.

Luxury property sales increased dramatically in April. In April 353 properties having a sale price of $2 Million or more were reported sold by Toronto area realtors. That is an 81 percent increase compared to the 195 properties reported sold in this category in 2015. In early May Christie’s International Real Estate, Chestnut Park’s exclusive Toronto area and Muskoka affiliate, produced an international luxury market study. It reported that Toronto was the second hottest luxury market place in the world, behind only Auckland, New Zealand, but well ahead of cities like Paris, London, New York and even Hong Kong. Not only was Toronto the second hottest luxury market in the world, but the fastest selling. All luxury properties in Toronto sold in only 28 days in 2015, substantially faster than any other luxury market place in the world.

Overall 12,085 properties were reported sold for the greater Toronto area market place. This was a new record for sales, and not surprising that it was 7.4 percent higher than the 11,254 properties reported sold last year. On a year-to-date basis, 34,623 properties have been reported sold. This is a 13 percent increase compared to the 30,752 properties reported sold in the first third of 2015. At this rate the Toronto area market place will deliver approximately 115,000 residential resales by year end. Another record. Stay tuned.


Chestnut Park Real Estate Market Report for January 2016

thumb In January only 8,957 new properties became available for sale in the greater Toronto area. This compares poorly against the 9,547 new listings in January 2015, a decline of over 6 percent. The number of new listings combined with the properties that sold in January means that at the beginning of February there were only 9,966 properties available for buyers to purchase. This is a decline of almost 15 percent compared to the 11,600 properties available last year and an even bigger decline than 11,903 properties available for sale in February 2014. (Click the image to the left for a pdf version)

These numbers are exceptionally low. They translate into only 1.8 months of inventory in the greater Toronto area and 2.1 months in the city of Toronto.The difference is due to the larger supply of condominium apartments available for sale in the city, predominately in the central core. In early 2015 there was 2.2 months of inventory in the greater Toronto area and 2.4 months in the city of Toronto. These numbers favor sellers but create a troublesome imbalance in the market place. In same trading areas the lack of inventory has reached serious levels of concern. For example in the trading area that encompasses the Riverdale and Leslieville neighbourhoods, there are only 1.1 months of inventory, a record low.

The problem with these low inventory levels, aside from the fact that they leave buyers frustrated and prevent first time buyers from becoming homeowners, they are placing incredible upward pressure on sale prices.

In January the average sale price for the Toronto area came in at $ 631,092, more than 14 percent higher compared to January 2015’s average sale price of only $ 552,929. In the city of Toronto the number is even higher, and the average sale price in the central core, including all condominium apartment sales which took place in January, is now $ 731,243. If inventory levels stay low the continued pressure on prices will put sustainability in question.

Activity was not restricted to the lower priced properties in January. For example, 88 properties having a sale price in excess of $2 million sold in January. This compares with only 44 such sales during the same period last year, an increase of 100 percent. The tight market conditions have driven the average sale price for a detached home in Toronto to $1,061,789 and a semi-detached home to $ 713,972. The problem with semi-detached homes is that there are hardly any available to buyers. There were 10 trading districts in Toronto that had no semi- detached properties listed for sale in January.

Activity was not restricted to the lower priced properties in January. For example, 88 properties having a sale price in excess of $2 million sold in January. This compares with only 44 such sales during the same period last year, an increase of 100 percent. The tight market conditions have driven the average sale price for a detached home in Toronto to $1,061,789 and a semi-detached home to $ 713,972. The problem with semi-detached homes is that there are hardly any available to buyers. There were 10 trading districts in Toronto that had no semi- detached properties listed for sale in January.

Report written by LLB, Chestnut Park Real Estate President and CEO, Broker of Record Chris Kapches


Toronto Real Estate Market Report for May 2015

Prepared by Chris Kapches
LLB, President and CEO, Broker

Tthumbhe Toronto residential resale market posted new records for sales in May, as it has in previous months this year. Historically low mortgage interest rates, extremely low inventory levels, especially for detached and semi-detached properties, are the dominant drivers of the market. At the end of May there were 18,858 properties available for sale, more than 10 percent less than the 20,679 that were available at the end of May 2014. As of the date of preparation of this Market Update buyers can secure a 5 year fixed term mortgage with an interest rate of 2.54 percent, with even lesser rates available for shorter terms. With little likelihood that new listings will increase over the next few months, and mortgage rates holding firm with increases unlikely for the remainder of 2015, expect this market to remain a seller’s market for the foreseeable future. (Click the image to the left for a pdf version)

In May 11,706 residential properties were reported sold for the greater Toronto area. This compares to 11,013 that were reported sold last year, a 6.3 percent increase, and a record month for the greater Toronto area. In April there was a 17 percent increase compared to April 2014. Although there was a pullback from the highs of April, the 11,706 properties sold in May is still very impressive, especially for a market place that has already produced over 30,000 sales in just the first four months of the year. Last month I reported that the speed at which these properties were selling was unprecedented. In May sales took place at an even faster pace.

All properties (on average) sold after only 18 days on market. In April all properties sold in 20 days. Last May all properties were reported sold in 21 days. In some trading districts the pace of sales can only be described as blistering. For example all properties in the eastern trading districts sold in only 13 days. That represents 1,132 properties. It is difficult to find superlatives for this market. In Toronto’s central districts all detached properties, 490 of them, sold in just 13 days, and for an eye-popping average sale price of $1,731,998, and 102 percent of the asking price. Sales of semi-detached homes in the central districts were even faster. All semi-detached properties sold in just 10 days at an average sale price of $966,948, and for prices that were 106 percent of their list price.

Breathtaking results. In the eastern districts, because of lower price points and even fewer properties available for sale, sales for detached and semi-detached properties were even faster. It will be of no surprise to anyone following these market statistics that average sale prices continue to rise.

In May the greater Toronto area market place established a new record for monthly average sale prices, coming in at $649,599, and eclipsing the previous record of $635,899 which was only achieved in April. May’s average sale price of $649,599 was more than 11 percent higher than the average sale price of $584,946 that we saw in May 2014. Ironically, at that time, it was also a record average sale price for the greater Toronto area. The average sale price for homes in the City of Toronto (416 area) is even higher, coming in at $718,350. Currently Toronto’s least expensive area to live in is the eastern districts. The average sale priced there is only $584,567, but a buyer will have to go quite a ways east to find the average priced home. The eastern districts closer to the city’s central core are averaging over $800,000. As I have indicated in previous reports, these numbers would be even higher if condominium apartment statistics are not included. As the market progresses we are seeing even condominium prices also increasing, and fairly dramatically.

In the City of Toronto, where most condominium apartments are located, condominium apartment sales increased by almost 13 percent compared to May of 2014. This 13 percent increase represented 1,762 sales, which in turn represents 42 percent of all sales that took place in Toronto. Not only were volumes up, but so were average prices. In May the average sale price for condominium apartments came in at $422,947. It was only a few months ago that the $400,000 threshold was exceeded. In Toronto’s central core the average price for a condominium apartment is rapidly approaching $500,000. In May the average sale price came in at $492,100. It should be noted that notwithstanding rising volumes and sale prices for condominium apartments, the pace of sales, though improving, lags behind freehold sales.

In May it took 27 days for all condominium apartments to sell in Toronto, 15 days slower than detached properties and an incredible 18 days longer than semi-detached properties. Unlike detached and semi-detached homes condominium apartments are not selling for more than their asking prices. In May condominium apartments on average sold for only 98 percent of their list price. Properties selling with a sale price of $1 Million or more are now becoming the norm in Toronto.

In May 1,412 properties having a sale price of $1 Million or more were reported sold. Million dollar plus property sales now represent more than 12 percent of the overall market place. It should be noted that 240 properties were reported sold having sale prices exceeding $2 Million. New records are being created monthly. At this pace the record for the most sales in a year is very likely to be shattered. In 2007 93,193 properties were reported sold. At that time the average sale price was only $379,347, 73 percent less than it is today. Short of an economic catastrophe, 2015 will end with reported sales exceeding 100,000 properties.


Toronto Real Estate Market Report for January 2015

Prepared by Chris Kapches
LLB, President and CEO, Broker

The Toronto residential resale market ended 2014 in strong fashion achieving sales that exceeded December 2013's results by 9.6 percent. That momentum continued into 2015, with January posting 4,355 sales, 6.1 percent greater than the 4,103 sales reported in January last year. Although the overall results were robust, primarily due to the availability of inventory, they varied by housing type and location. If the Toronto market maintains this early momentum throughout 2015 it will shatter the 2007 record of 93,193 for property sales.

Once again in January the demand-inventory problem drove results. For example in the City of Toronto sales of detached and semi-detached properties actually declined when compared to sales achieved in 2014. In January sales of detached properties declined by 2 percent. Semi-detached properties declined by 3.8 percent. In the 905 region sales of detached properties increased by 10 percent and semi-detached properties increase by a more modest 2.8 percent, highlighting the disparity in inventory and price point between the City of Toronto and the 905 region. Detached properties in the 905 region were $ 300,000 less expensive than similar properties sold in the City of Toronto. Semi-detached properties were more than $ 200,000 less expensive in the 905 region. In January the average sale price for detached houses in Toronto came in at $ 948,713, 7 percent higher than last year, notwithstanding that sales were off by 2 percent, a clear indication of an inventory shortage. The same was true for semi-detached properties. The average price for semi-detached properties was $ 667,452, 7.2 percent greater than last January's average sale price, despite sales being lower by 3.8 percent.

Average sale prices for detached and semi-detached properties were substantially higher in Toronto's central districts. The average sale price for central district detached homes came in at $ 1,422,382. For semi-detached properties it came in at approximately $ 800,000. High end sales generally have increased fairly dramatically in the last three years. In January 313 properties having a sale price of $ 1 Million or more changed hands. In 2014 that number was 236 properties, and in 2013 only 195. Since 2013 the number of high-end property sales has increased by more than 60 percent.

Due to inventory shortages and the price points of detached and semi-detached properties in Toronto, more and more buyers are looking to condominium apartments as alternative housing options. In January condominium apartment sales posted an increase of 6.2 percent compared to sales in 2014. The 809 condominium apartment sales recorded in January were 40 percent more than the combined total sales of detached and semi-detached properties. The average sale price of condominium apartments increased by 4.5 percent to $ 382,458. In the central districts of Toronto the average sale price recorded for condominium apartments came in at $ 435,441.

All sales, on average, took place in only 31 days. Last January it took 36 days. Although 31 days on market is not a record it is an indication of a very fast marketplace. In January 2010 sales took place in only 28 days. The slowest January over the last few years was January 2009 when deep in the recession it took 49 days on average for all properties to sell. As has been the case for a number of years, the eastern districts remain the most speedy, with all sales taking place in only 24 days, with detached and semi-detached properties selling even faster. Although there are more condominium apartment sales they are slower than the freehold market. Condominium apartment sales took 40 days in the City of Toronto.

An analysis of inventory indicated that at the end of January there was only 2.2 months of inventory for the greater Toronto area, and 2.4 months for the City of Toronto. The number is higher in Toronto due to the number of condominium apartments available for sale. Needless to say, properties available for sale in Toronto's eastern districts are very low, resulting in only 1.4 months of inventory.

January did see an increase in new listings coming to market as compared to January 2014. The first month of the year witnessed 9,596 new listings, a 9.5 percent increase compared to the 8,762 listings that sellers put on the market last year. This increase helped with inventory levels, but at the end of the month buyers still had less choice than last year. At the beginning of February there were 11,600 properties available for buyers to purchase, 2.3 percent fewer than last year's 11,903 properties.

It is no surprise that the average sale price once again rose in January. The average sale price came in at $ 552,575, 4.9 percent higher than last January's average sale price of $ 526,965. A concern expressed in these reports throughout 2014 was the impact that these constantly increasing prices will have on affordability. Monthly increases have consistently exceeded wage increases by 200 to 300 percent. It has been the historically low interest rates that have bridged the affordability gap.

In January mortgage interest rates became even lower, reaching levels never seen before. The Bank of Canada cut the overnight bank rate by 0.25 basis points, reducing it to 0.75 percent. Canada's big banks reduced the five year mortgage interest rates to as low as 2.69 percent. Borderline buyers are now capable of qualifying for mortgages. No doubt demand will be even further inflamed, particularly if further rate cuts follow, as the Bank of Canada has indicated it will do if the impact of falling oil prices negatively impacts Canada's economy and further stimulation is deemed necessary.In January only 8,957 new properties became available for sale in the greater Toronto area. This compares poorly against the 9,547 new listings in January 2015, a decline of over 6 percent. The number of new listings combined with the properties that sold in January means that at the beginning of February there were only 9,966 properties available for buyers to purchase. This is a decline of almost 15 percent compared to the 11,600 properties available last year and an even bigger decline than 11,903 properties available for sale in February 2014.

These numbers are exceptionally low. They translate into only 1.8 months of inventory in the greater Toronto area and 2.1 months in the city of Toronto.The difference is due to the larger supply of condominium apartments available for sale in the city, predominately in the central core. In early 2015 there was 2.2 months of inventory in the greater Toronto area and 2.4 months in the city of Toronto. These numbers favor sellers but create a troublesome imbalance in the market place. In same trading areas the lack of inventory has reached serious levels of concern. For example in the trading area that encompasses the Riverdale and Leslieville neighbourhoods, there are only 1.1 months of inventory, a record low.

The problem with these low inventory levels, aside from the fact that they leave buyers frustrated and prevent first time buyers from becoming homeowners, they are placing incredible upward pressure on sale prices.

In January the average sale price for the Toronto area came in at $ 631,092, more than 14 percent higher compared to January 2015’s average sale price of only $ 552,929. In the city of Toronto the number is even higher, and the average sale price in the central core, including all condominium apartment sales which took place in January, is now $ 731,243. If inventory levels stay low the continued pressure on prices will put sustainability in question.

Activity was not restricted to the lower priced properties in January. For example, 88 properties having a sale price in excess of $2 million sold in January. This compares with only 44 such sales during the same period last year, an increase of 100 percent. The tight market conditions have driven the average sale price for a detached home in Toronto to $1,061,789 and a semi-detached home to $ 713,972. The problem with semi-detached homes is that there are hardly any available to buyers. There were 10 trading districts in Toronto that had no semi- detached properties listed for sale in January.

Activity was not restricted to the lower priced properties in January. For example, 88 properties having a sale price in excess of $2 million sold in January. This compares with only 44 such sales during the same period last year, an increase of 100 percent. The tight market conditions have driven the average sale price for a detached home in Toronto to $1,061,789 and a semi-detached home to $ 713,972. The problem with semi-detached homes is that there are hardly any available to buyers. There were 10 trading districts in Toronto that had no semi- detached properties listed for sale in January.

Report written by LLB, Chestnut Park Real Estate President and CEO, Broker of Record Chris Kapches