Two more market records were broken by the performance of the Toronto resale market. Toronto area realtors were responsible for 7,385 property sales in November. This result represents the highest number of reported sales ever achieved for the month. By comparison only 6,476 sales were reported in November 2014, an increase of more than 14%. This is an incredible achievement at a time normally associated with the beginning of the holiday season, when buyers in particular are focused on matters other than real estate. Secondly, and perhaps more importantly, by month-end the Toronto Real Estate Board had reported 96,401 residential resales for 2015. This number shattered the previous annual record of 93,193 sales achieved back in 2007, with one more month to go before the greater Toronto’s annual sales totals are finally calculated. Last December there were 4,418 reported sales. If this December’s results are equal to last year’s, and the anticipation is that they will be even higher, 2015 will close out with almost 101,000 sales. This would be a 8.4% increase over the record year of 2007.
The growth in sales can be attributed to the increase in condominium apartment sales since 2007. Over the past eight years numerous condominium projects have reached the registration stage, and consequently have become available for resale. In November there were 1,198 detached and semi-detached properties reported sold in Toronto’s 416 districts, and 1,351 condominium apartments were reported sold, almost 13% more than the total number of freehold properties sold.
The average sale price for condominium apartments was $415,316, much lower than the average sale price for detached and semi-detached properties. In November, the average price for a detached house in Toronto was $1,018,621, and for semi-detached properties the average was $750,608. It is clear that for many buyers the only affordable alternatives are condominium apartments. The average sale price for all properties sold in the greater Toronto area was $632,685, almost 10% higher than the $577,502 achieved in November 2014. The average sale price for 416 area sales was $654,221, about 4% higher than the broader greater Toronto area. The number of listings coming to market has been increasing over the last few months, but still too low to meet demand. In November, 9,609 new properties came to market, a 10.2% increase compared to the 8,716 properties that came to market last year. Notwithstanding this increase, at month-end the Toronto market was still almost 9% short of the number of listings it had in 2014. Last year there were 14,717 active listings at the end of November. This year we enter December with only 13,454 active listings.
In November, 130 properties were reported sold having a sale price of $2 million or more, a very healthy number for November. As we near the end of the year, the concern remains that Toronto’s average sale prices have reached levels that might not be sustainable. The historically and exceptionally low mortgage interest rates have been the primary reason for the record-breaking sales that have taken place throughout this year. Fortunately there is no immediate risk of rates rising. If average sale prices continue to rise at their recent double digit pace, any increase in mortgage interest rates will see sales stall and prices level off. Continued rising inventory levels will help ease this potentially-dangerous situation from developing.
— Written by Chris Kapches, LLB, President and CEO, Broker
– Chip Barkel, MCNE, SRES, Toronto Real Estate. Extraordinary Service. Top Results.