February 2016 Toronto Real Estate Market Report
January’s exceptional start paled in comparison to February’s results. February set a new high water mark for sale prices in Toronto. This speaks to the power of the Toronto resale market. In the past when records for average sale prices have been set it’s usually in the months of April and May, the months that are most active. This year it occurred in February. In February, the Toronto and area resale market reported an average sale price of $685,278, the highest ever recorded. The previous record was achieved in May of last year, with an average sale price of $649,648. The average sale price in the City of Toronto (416 districts) came in at $719,843. This average sale price is particularly startling in that it includes condominium apartment sales, which form the bulk of the sales in the City of Toronto. The average sale price achieved in February exceeded last February’s average sale price of $596,320 by almost 15%.
It is not surprising that the number of sales achieved in February was also a record. There were 7,621 sales reported, the highest number of sales ever produced by Toronto area realtors in any February. Last year there were only 6,294, an increase of more than 21%. This is an unprecedented increase for the month of February. The increase in sales was across all housing types.
In the City of Toronto detached property sales increased by almost 12%. Semi-detached property sales increased by almost 22%. But the biggest increase in sales was in condominium apartments. In February condominium apartment sales increased by more than 25% compared to February 2015. Given the steep increase in prices in Toronto, condominium apartments are the last resort for many buyers, especially first time buyers
Prices for detached and semi-detached properties have increased dramatically in the last few months, once again breaking records in February. The price of the average detached house in Toronto is now $1,211,459. The price for semi-detached properties is not far behind at $848,835. Condominium apartments look very attractive at only $435,579. In Toronto’s central districts, where many of the city’s condominium apartments are located, the average sale price is $488,518.
In February, all sales took place in only 21 days (on average), and much faster in some of Toronto’s trading districts, and for detached and semi-detached properties. If you were fast enough to find one and offer on it, in most cases you found yourself in competition. Last year, which was a record-breaking year for sales, it took 23 days for all properties to be marketed and sold.
Of special note are Toronto’s luxury sales. These are properties that had a sale price of $2 Million or more. In February 187 properties in this category were reported sold. This represents an incredible 82% increase compared to the 103 $2 Million plus properties sold in February 2015. Most of these sales were detached properties, however there were 5 condominium apartments that were sold in this category.
The focus, as we head into March, is Toronto’s inventory of properties available for sale. At the beginning of March there were only 10,902 active listings in the entire greater Toronto area. This compares with 12,793 in 2015, a decline of almost 15%. In the City of Toronto there were only 5,070 available properties, including 3,432 condominium apartments. In the greater Toronto area there are only 1.7 months of inventory. In January there were 1.8 months of inventory. February’s inventory levels are the lowest that have been seen since the Toronto Real Estate Board began providing months of inventory data. We are a long way from a balanced market. That would require 3 to 4 months of inventory.
Looking forward it is unlikely that inventory levels will improve. Coupled with today’s historically low mortgage interest rates, there will be a mad scramble for properties becoming available for sale, which in turn will cause Toronto’s already high average sale prices to break new records.
prepared by: Chris Kapches, LLB, President and CEO, Broker