Market Report_Infographic_October2014

Toronto Real Estate Market Update October 2014

The Toronto residential market continued its strong performance in 2014 with a stellar month in October, breaking a number of records in the process. There were 8,552 sales reported in October, a substantial increase from the 8,051 reported in September. Compared to October 2013 the increase was even more dramatic. In October last year there were only 7,941 properties reported sold. Year over year this represents an increase of almost 8 percent. This performance raises the possibility that 2014 may be the best year on record for the greater Toronto market place.

Average sale prices followed in the path of increased sales. In October the average sale price for all properties sold in the greater Toronto area came in at $587,505, almost 9 percent higher than last year’s average sale price of $539,286. October’s average sale price of $587,505 breaks the record for the highest average sale price previously achieved. That occurred in May of this year when the monthly average sale price came in at $584,925. The average sale price for the City of Toronto, (the 416 region), was substantially higher at $633,078. This number includes condominium apartment sales which sell for substantially less than freehold properties. Detached and semi-detached homes in Toronto are becoming very pricey, vaulting Toronto prices into the international sphere, ahead of cities like Rome and Milan, and only behind powerhouse international centers like London, Paris, New York and Vancouver.

Toronto’s central districts continue to be Toronto’s priciest neighborhoods. In October the average sale price came in at $748,532, increasing from September’s $739,567. Needless to say, this number would be even higher if condominium apartment sales, which represent more than half of all central district sales, were extracted.

Ironically the price for Toronto’s most expensive real estate, detached homes in the central districts, experienced its second monthly decline in a row. In August the average sale price for detached homes in the central districts achieved a record price of $1,505,877. In September the average price declined to $1,498,788. In October there was a further decline to $1,451,623. Although declining, detached homes in central Toronto remain expensive. Semi-detached sales in central Toronto also declined as compared to September, from $874,719 to $843,602 in October. This decline is inventory driven, not demand. The semi-detached properties that did sell sold in only 13 days and at 103 percent of their asking price.

In October there were 803 properties reported sold having a sale price of $1 Million dollars or more, also a record. Even more impressive was the fact that these 803 sales represented 9.3 percent of the entire market place. Again illustrating how pricey Toronto real estate has become.

The speed at which properties sold remained constant with the speed of sales in September. All sales (including the 905 region) sold in just 25 days, matching September’s pace. Last October it took 27 days (on average) for all newly listed properties to sell. October’s pace was not a monthly record, but still remarkably fast by historical standards.

As has been reported in past monthly reports, Toronto’s eastern districts remained the most difficult market place for buyers to find homes. Sales of all detached homes took place in an astonishing 15 days. Semi-detached sales were even faster. It took only 13 days for all semi-detached homes to sell. Not only was the speed exceptional, but the fact that they all sold for 104 percent of their asking price is beyond remarkable. Not long ago this phenomenon could be explained by the fact the eastern district properties were the least expensive in the City of Toronto. The average price of detached properties sold is rapidly closing in on the western districts, and in October the average price of semi-detached properties sold in the eastern districts exceeded the average price of western districts sales by almost 15 percent.

Condominium apartment sales continue to impress. Compared to October 2013, sales in the City of Toronto increased by 8.2 percent to 1,455 sales. The average sale price also increased by 1.5 percent to $390,430. The speed at which these sales occurred also improved. Although not as fast as detached and semi-detached property sales, at 30 days, condominium apartment sales took only 5 days longer. The pace at which condominium apartments are selling has increased dramatically since last year. In Toronto’s central districts the average sale price of all condominium apartments came in at $452,508, a number basically unchanged as compared to September.

Sellers have not brought a sufficient amount of property to meet market demand. In fact, at the end of October there were fewer properties available for buyers to purchase than there were last year at this time. Last year there were 18,557 properties available for sale, this year only 17,497, a decline of almost 6 percent. These numbers are reflected in the market’s months of available inventory. For the entire greater Toronto market place there is only 2.2 months of inventory, at least 2 months less than what would represent a balanced market.

October’s sales bring year-to-date sales to 81,974 residential properties. The record for sales in the greater Toronto area was achieved in 2007, when 93,193 properties were reported sold. As a side note, in 2007 the average sale price was only $376,236. Although not a certainty it is conceivable that 2014 will become the year that exceeds 2007 for reported sales. If the market achieves 7,000 sales in November and 4,500 in December the six year old record will be at an end. These numbers are not unrealistic.

prepared by: Chris Kapches, LLB, President and CEO, Broker
Chestnut Park Real Estate Limited, Brokerage | chestnutpark.com