After a light breather in August, the Toronto residential resale market bounced back with some vigour in September. It would appear that August was Toronto’s vacation month with buyers and sellers focusing on seasonal matters rather than real estate sales. That was not the case in September. There were 8,051 reported sales in September, up almost 11 percent compared to the 7,257 sales last September. This double digit positive variance was consistent with the positive variances experienced by the market prior to August.
It is not surprising to note that the resurgence in sales also resulted in a spike in the average sale price. In September the average sale price for all properties sold in the greater Toronto area was $573,676, almost 8 percent higher than the September 2013 average sale price of $532,455. The average sale price for property sales in the City of Toronto (416 Area) was $624,851, or 9 percent greater than the average sale price for the broader market. The highest monthly average sale price to date has been $584,925. That high was achieved in May of this year.
The central districts in Toronto continue to be the Greater Toronto’s most expensive real estate. The average price for all sales in the central districts was $739,657. This number would be substantially higher if condominium apartment sales were extracted.
Most of Toronto’s condominium apartment sales are located in the central districts. The average sale price for detached properties in the central districts was $1,498,788 (a slight declined from August, which came in at $1,505,877.) Semi-detached properties sales came in at $ 874,719. Detached homes in the central districts sold for 99 percent of their asking price. Semi-detached homes sold for an eye-popping 106 percent of their asking price, and they did so in a breathtaking 12 days.
On the whole the market was rapid, with all sales taking place within 25 days after properties were listed for sale (on average). Last year it took 27 days for all properties to sell. This is not record speed. There have been months when all properties sold in 21 days, but September’s was still a very rapid pace, making it extremely difficult for buyers to react.
The city’s eastern districts, no doubt because of their lower price points, continue to be in most demand. Sales of all detached homes took place in only 17 days, at 102 percent of the list price. Sales of semi-detached homes took place in a shocking 13 days at a startling 106 percent of their original asking price. Buyers hoping to purchase a house in Riverdale, Leslieville, North Danforth and the Beach essentially have to be prepared to pounce as soon as a listing hits the market.
Condominium apartment sales are becoming a considerable force in the Toronto market place, again no doubt because of their accessible price point. Although sales are not taking place as quickly as Toronto’s detached and semi-detached properties, the pace of sales is relatively brisk. In September it took 33 days for condominium apartments in the City of Toronto to sell. There were 82 percent more condominium apartments for sale in Toronto than the combined number of detached and semi-detached properties (4,579 condominium apartments as compared to 2510 detached and semi-detached properties). As a result buyers have the benefit of both time and selection. Notwithstanding, condominium apartment sales surged by almost 16 percent compared to sales in September 2013, and average sale prices rose by 9.2 percent to $395,505. In Toronto’s central districts (where 66 percent of all of Toronto’s condominium apartments are located) the average sale price came in at $453,922 in September.
Inventory levels continue to be a concern. Although the number of new listings is increasing every month, these new listings are being quickly absorbed. In September 15,692 new listings came to market, 5.8 percent more than the 14,828 new listings that came to market last year. As a result, beginning in October there were 19,165 properties available for buyers to purchase in the Greater Toronto Area, 5.1 percent fewer than the 20,194 properties available in 2013. These listings represent only 2.2 months of inventory, far less than what would be required for a balanced market. We would need closer to 4 months of inventory to achieve a balanced market.
It is not surprising that with average sale prices rising as quickly as they have that sales of properties having a value exceeding $1 Million have grown dramatically. In September 669 properties with a sale price in excess of $ 1 Million were reported sold. There were 120 properties with a sale price in excess of $ 2 Million that sold, 7 of which were condominium apartments.
Expect more of the same in October. As indicated in the August report, there have been no economic changes that would have a negative impact on the resale market. Mortgage interest rates are historically low (2.75 percent is currently available), buyer demand remains strong, and inventory levels remain low. The perfect storm, with sellers safely on shore, and buyers in leaky boats on the turbulent sea. The only dark cloud on the horizon is the equity markets.
prepared by: Chris Kapches, LLB, President and CEO, Broker
Chestnut Park Real Estate Limited, Brokerage | chestnutpark.com