In October the Federal Finance Minister implemented new “stress testing” for buyers looking for high ratio loans. A buyer seeking a high ratio loan normally has less than 20 percent of the purchase of the property. The new “stress testing” rules require borrowers to be qualified at banks’ posted rates, and not the discounted rates, the rate of interest they will actually be paying.
The new lending restrictions came into effect on October 17th. The concern was that these lending restrictions would freeze a large portion of first time buyers out of the market place. The resale data available to the real estate community for the month of October indicates that there was no appreciable change in the activity of the residential resale market after October 17th. There were 9,768 properties reported sold for the month. Almost 12 percent higher than the 8,759 properties reported sold in October 2015. Sales were about the same before and after October 17th.
The 9,768 reported sales brings the total sales for 2016 to 99,354. If the year had ended at the end of October it would have been the second best year on record, only behind the 101,212 reported sales in 2015. With two months still to go, it is safe to forecast that total sales for 2016 will come in at approximately 112,000 properties.
1820 Concession Rd. 6 – Uxbridge – $2,488,000
With sales continuing as briskly as ever, it is not surprising to find that a new average sale price record was established in October. The average sale price for all properties sold in October in the greater Toronto area came in at $762,975. This number surpassed the previous monthly record high of $756,080 achieved in September of this year. October’s average sale price was 21 percent higher than the average sale price of $630,254 for October 2015. The average sale price includes all property types, including condominium apartments, which are substantially less expensive than detached and semi-detached properties.
In October, the average price for a detached property in the City of Toronto came in at $1,303,339. In Toronto’s central districts the average sale price for detached properties established a new high of $2,086,362. Semi-detached properties were not far behind coming in at an average sale price of $902,137. In Toronto’s central districts a semi-detached property will now cost a buyer $1,236,673. In both cases, detached and semi-detached properties are more than 20 percent higher than they were a year ago.
Rising sales coupled with rising prices normally means fewer days on market for listed properties. October was no exception. All properties sold in just 16 days (on average), the same pace at which they sold in September, but almost 30 percent faster than properties were selling last year. Last year, which was a record breaking year, all properties took 22 days to sell. Needless to say for certain types of properties and neighbourhoods the pace of sales was, as surprising as this is, even faster.
PH 427 – 3170 Erin Mills Parkway, Mississauga – $598,000
Detached properties in the City of Toronto sold in only 13 days. Semi-detached properties, if you could find one, sold even faster at 11 days. East end semis sold in only 8 days, literally a breathtaking pace. Not only did detached and semi-detached properties sell at lightning speed, they consistently sold for substantially more than their asking price – 105 and 109 percent over the asking price, respectively.
The number of high-end property sales (those properties having a sale price of $2 Million or more) grew dramatically on a year-over-year basis. In October 2015 there were only 140 reported sales in this category. This October that number increased to 325, an increase of 132 percent. The bulk of those sales were detached homes. There were 11 condominium apartments in this category of sales.
#6003 – 180 University Avenue – $2,585,000
Chris Kapches, LLB, President and CEO, Broker