Toronto Real Estate Market Report for November 2011
Prepared by Chris Kapches
Senior Vice-PresidentIn November 7,092 residential properties were reported sold by the Toronto Real Estate Board. This compares to 6,384 reported inNovember 2010, an 11 percent increase. November extends the string of consecutive months that have witnessed substantiallyimproved results compared to the same month in 2010. This improved market remains driven by historically low mortgage interestrates, strong buyer demand, and an under, though improving, supply of available properties for sale.
With only December's results to tabulate, it is a safe prediction that 2011 will be the second best year on record, behind only the 93,193residential properties reported sold in 2007.As at the end of November 84,859 properties were reported sold. Typically between 4,200and 4,500 properties are reported sold in December. This means that in 2011 over 89,000 (and more likely closer to 89,500) propertieswill be reported sold. The next best year to 2007 prior to this year was 2009 when 87,308 properties were reported sold. It does notappear that this year will break the 90,000 property plateau for the second time in record keeping by the Toronto Real Estate Board.
In November 9,786 new listings came to market. This represents a 14 percent increase compared to the 8,586 new properties that cameto market in November 2010. The new properties that came to market in November bought the total number of properties available forsale at the end of the month to 15,551. By historical standards 15,551 available properties remains insufficient to meet buyer demand.For example, at the end of November last year, there were 18,305 properties available for sale, 15 percent more than this year.An inven-tory of 15,551 properties represents a little more than 2 months supply, far from a balanced market. A balanced market would have 3to 4 months of supply.As a result, well priced properties in sought after neighbourhoods continue to attract competing offers.Althoughan increase in inventory levels is forecast for 2012, it is unlikely to be sufficient to create a balanced market.
It is no surprise that average days on market continues to be exceptionally low. In November all new properties (on average) comingto market took only 29 days to sell. This is for the entire greater Toronto area. The market in the City of Toronto was even faster, aver-aging only 27 days for all sales. In November 2010, it took 34 days for all properties to sell in the greater Toronto area. The tradingareas just east of Toronto's central districts (Riverdale, Leslieville, the Beach) remain the most in demand neighbourhoods. Sales inthese neighbourhoods are averaging about 16 days on market. In fact eastern Toronto as a whole remains the most popular trading areaaveraging only 24 days. Central properties took 27 days to sell, while west properties appear slightly less popular at 30 days. It shouldbe noted that at 29 days on market for the greater Toronto area, this marks the slowest month since the beginning of the year. Averagedays on market for October was 26 days, while September and August were both 27. This slight slow down may be due to seasonalchanges, but more likely reflects the increase in available inventory (as slight as it was) coupled with continually rising house prices.
In November the average sale price for all properties sold was reported as $480,421. This represents the second highest monthlyaverage on record, only behind the $485,436 achieved in May of this year. This is an interesting development given that average saleprices historically fall off in November. The increase in average prices was driven by 365 sold properties that had a sale price of morethan $1,000,000. Of those 365 sold properties 55 had an average sale price of more than $2,000,000, 6 of which were condominiumapartments. November's average sale price of $480,421 represents almost a 10 percent increase compared to the average sale price of$457,494 achieved in November 2010.
As we head towards 2012 forecasts (Toronto Real Estate Board, Canada Mortgage and Housing Corporation) for next year are mainlypositive. The view is that the Toronto market will moderate slightly, with sales slightly lower than 2011, and average price increasesdeclining to about 4 to 5 percent from 2011's almost 10 percent increase. A moderate decline in average sale prices is most welcome.Markets that have suffered severe declines in average prices (Ireland, Spain, United States) saw precipitous average price increasesbefore dramatic declines. Moderate increases support affordability and insure that severe price declines will be avoided if marketschange.
