GTA Home Sales Shake Off "Very Dark Period"
The Toronto area’s high-priced housing market is climbing again, with double-digit sales gains this summer expected to continue through the fall.
The Fall luxury market will run “at full throttle” now that the Toronto region has shaken off the malaise of “a very dark period” following the Ontario Fair Housing policy and new mortgage rules.
It is expected that the market is going to continue to get stronger. After we head into 2019 you’re going to see year-over-year comparisons continuing to be very strong.
It's expected upward pressure on prices to continue in the Toronto area, gaining in the range of 3 to 4 % through the fall.
The Toronto Real Estate Board reported year-over-year price increases of nearly 5 % across all re-sale home categories in July & August.
Luxury homes defined at more than $1 million, which is actually below the City of Toronto’s August average detached house price of $1.24 million. The number of single-family homes that sold for more than $1 million in the City of Toronto in July & August rose 12%. Across the Toronto region, sales climbed 20%. The number of sales may have been hampered by a shortage of listings, particularly in the $1 million to $2.5 million price range.
High single-digit or low double-digit year-over-year growth in 2018, particularly in the more costly downtown areas where Buyers are again competing for properties.
A lot of people are wishing they had bought towards the end of spring this year because now as the demand is continuing to rise & price pressure is continuing to rise with it, finding prices are starting to move in the upward direction. It’s moving away from what people might have thought was a "Buyers’ Market”.
It isn’t the kind of bidding frenzy common in early 2017. Back then 5 or 10 offers on a house were common compared to 2 or 3 offers now. It is enough to prompt the 2 or 3 people who didn’t win that bidding war to bid higher on the next one in order to try & secure the property.
Even the relatively small super-luxury category — defined as homes $4 million & up — is gaining ground, with 72 sales in that range moving this summer. That is a 35% increase in sales in the Toronto region & 50% above last year in the City of Toronto.
High-priced condos also saw significant sales gains in the summer as Buyers favour urban lifestyles with a 28% rise in sales over $1 million in the Toronto area & 21% in the City of Toronto.
Entry-level detached houses priced between $600,000 & $900,000 also saw 22% sales growth since June. It suggests that the shortage of inventory for those homes in the City of Toronto could push some Buyers to expand their search to the 905-area communities, where the housing recovery has been slower. Move-up Buyers ready to cash in their equity are expected to take advantage of softer conditions at higher price points.
The Toronto Real Estate Board warned earlier this month that tight market conditions could lead to accelerated price gains as there is a shortage of homes to buy in some Toronto neighbourhoods.
A shortage of new construction homes in the Toronto area is contributing to the tight resale housing market, said Henderson.
The Toronto activity is in direct contrast to Canada’s other high-priced housing market in Vancouver, he said. That city’s “fragile recovery... got knocked on its back,” by an expanded foreign Buyers tax & a speculation tax, said Henderson. Vancouver sales in homes over $1 million dropped 24% year-over-year this summer and $4 million-plus sales were down 33%.
Source: The Star – Tess Kalinowski, Real Estate Reporter – Wed Sept 26/18
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