As forecast in the June Market Update, July’s numbers declined compared to June. This is a common seasonal adjustment. Having said that, 9,880 residential property sales were reported by the Toronto Real Estate Board, a record for the month of July. Last July 9,152 properties were reported sold, an increase of 8 percent.
It should be noted that July’s market results were not even. For example, sales by volume for detached, semi-detached, and townhouse in Toronto’s 416 trading districts were actually down compared to last year. Sales of detached, semi-detached and townhouse sales in the 905 trading district were up substantially, by 13.3, 12.7, and 8.3 percent respectively. Condominium apartment sales were up in both the 416 and 905 trading districts, by 13.7 and 4 percent respectively.
This means that July’s record-breaking month of 9,880 sales was driven by condominium apartment sales, and the sale of detached, semi-detached, and townhouse sales in Toronto’s 905 region. The explanation is two fold. The Pan Am games caused an exodus of 416 residents to cottages and vacations, coupled with a shortage of available inventory in the 416 trading area. Notwithstanding the difference in freehold sales between the 416 and 905 trading areas, average sale prices rose fairly uniformly across all housing types and in both regions. Overall July’s average sale price came in at $609,236, 10.6 percent higher than the $550,625 achieved last year. The highest monthly average sale price was achieved in May of this year, coming in at $649,769. It is conceivable that that record could be broken before the end of 2015.
Inventory levels remain low. There are 1.9 months of inventory in the entire Greater Toronto area. In the city of Toronto there are 2.2 months of inventory. The higher inventory level in Toronto is due to the high concentration of condominium apartments for sale in the city, especially in Toronto’s downtown core. Low inventory levels led to sales occurring in record speed times for July. All sales in the greater Toronto area took place in (on average) only 22 days. In the city of Toronto all sales took place in 24 days. The discrepancy between these trading areas is once again due to the high concentration of condominium apartments in the city of Toronto. As has been the case for more than two years, the fastest trading area remains Toronto’s eastern trading districts. All sales took place in only 17 days, and even faster in the case of detached properties (11 days). In the area known as the Beach in eastern Toronto, all sales (and there were 22 of them) took place in an astonishing 7 days. It is almost physically impossible to place a listing on the market, market it, negotiate an offer, and then report it sold, all in 7 days, but apparently not. Condominium apartments continue to be a dominant factor in the city of Toronto. Of the 3,480 reported sales in the city, 1,730 of them were condominium apartments, or approximately 50 percent. Most of these units are located in Toronto’s downtown core.
Although condominium apartment sales dominate Toronto’s market place, because of their abundance they do not sell as quickly as detached and semi-detached properties. Condominium apartments took 30 days to sell in July. This pace is slower than freehold properties but still an exceptional speed, a speed that qualifies condominium apartments as being in a Seller’s market. As a result, the average sale price for condominium apartments has improved continually during 2015. In July the average sale price for all condominium apartments sold in the city of Toronto was $394,504, an increase of over 4 percent. In January of this year the average sale of a Toronto condominium apartment was only slightly more than $380,000.
As is typical for this time of the year there was less activity at the upper end of the market place in July. In July 840 properties sold having a sale price of $1 million or more. High-end sales are less frequent during the summer months. In May more than 1,250 properties having a sale price of $1 million or more were reported sold.
Inventory levels have not improved throughout 2015. In July 14,699 new properties became available for sale, 2.5 percent fewer than July 2014. As a result heading into August there were only 16,673 properties available for buyers to purchase, almost 15 percent fewer than the 19,549 available in 2014. More listings will come to market as August progresses and sellers return from vacations.
After seven months of sales, 2015 is clearly on its way to being the best year for re-sales in the greater Toronto area. At the end of July 64,262 residential properties were reported sold. At this pace approximately 102,000 properties should be sold by Toronto area realtors by the end of the year, easily eclipsing the previous record of 92,859 sales achieved in 2007. With no mortgage interest rate hikes in sight, this is a reasonable forecast for 2015.
Report prepared by Chestnut Park’s CEO Chris Kapches
Image via BlogTO
– Chip Barkel, MCNE, SRES, Toronto Real Estate. Extraordinary Service. Top Results.