April 2017 Toronto Real Estate Market Report
Even though sales were slightly down (3.2%) year-over-year, the average sale price for every housing type was substantially higher. Detached properties in the city of Toronto came in at $1,578,542, up 25.2%. Semi-detached properties came in at $1,104,047, up by 22.4% , and condominium apartments came in at $578,280, up by almost 33% . In Toronto’s central core detached properties sold on average for $2,200,000 and semi-detached properties were not far off at $1,389,400.So what does all this data, some of it conflicting, say about Toronto’s residential resale market?
So what does all this data, some of it conflicting, say about Toronto’s residential resale market? Clearly, demand remains strong, and even though more properties came to market, inventory levels are still insufficient. If homeowners continue to bring properties to market at the pace and level that they did in April, supply levels might, for the first time in years, move towards a more balanced market. If that happens it will only be temporary. There simply isn’t enough supply to meet the growing demand in the greater Toronto area. With more than 100,000 net migration to the greater Toronto area annually, demand will remain high. Government legislation that was designed to curb urban sprawl has resulted in a severe shortage of low-rise housing, forcing buyers into high-rise condominiums at a pace that exceeds builders’ ability to deliver apartments to meet our housing needs.
The Ontario Fair Housing Plan measures, even if successful, are many years away from increasing the housing supply. The only economic change that will reduce demand is a substantial increase in mortgage interest rates. With the Canadian economy still struggling, that will not happen soon. And if it did, the newly expanded rent controls combined with the ongoing need for rental accommodation will be responsible for a rental housing crisis.
Consequently, with perhaps a “wait-and-see” lull that the new measures announced by the provincial government will create, we should anticipate that the Toronto and area market will remain robust, with average sale prices rising until they reach a point that simply renders them unsustainable. Until then, it is an arrogant and politically motivated government position, that it can deliver or control affordable housing. Toronto is not the only city in the world that no longer meets the long cherished, yet the unrealistically arbitrary figure of 3 times gross household incomes as a reasonable benchmark for affordable housing prices.
A review of housing prices in other parts of the world makes it clear that there is no particular reason why housing must be affordable for the average person. Residential real estate in many cities is even more expensive than Toronto. Simply stated, Toronto has moved into the category of one of the best cities in the world in which to live.
Prepared by: Chris Kapches, LLB, President and CEO, Broker
– Chip Barkel, MCNE, SRES, REDM, Toronto Real Estate. Extraordinary Service. Top Results.