I came across a very interesting article about Toronto Real Estate 2015 Predictions in the Huffington Post by Nathan Dautovich. Nathan has predicted that the housing price will peak in 2015 despite a tumultuous time. He also predicted that the Sold prices which were only accessible through Real estate Agent may become public. Currently, the Canadian Competition Bureau is in a lawsuit against the Toronto Real Estate Board in an effort to allow the public access to data that previously only agents had access to – in particular, sold data. Another major prediction is the-the Larger Condo units will be in higher demand due to changing preferences for homes in the Toronto area.
Toronto Real Estate Board TREB has reported another strong fourth quarter in 2014 with 8.3% higher sales than last year. The Board says the average selling price for a condo apartment through the Toronto Multiple Listing Service was $367,199, up 3.8 per cent in the fourth quarter of 2013.
“Demand for condominium apartments remained strong in the fourth quarter of 2014. While the supply of condominium apartments listed for sale grew in the fourth quarter, including a large number of newly completed units, the number of sales grew at a faster pace. Competition between buyers increased in the condo market over the past year,” said Mr. Etherington.
The breakdown is as follows: Fourth Quarter 2014
- Halton Region sold 138 compared to 140 in 2013
- Peel Region sold 676 compared to 657 in 2013
- City of Toronto sold 3,564 compared to 3,229 in 2013
- York Region sold 488 compared to 449
- Durham Region sold 98 compared to 111 in year 2013
The Market According to TREB’s Mercer – Quarterly October 2014
Hello! My name is Jason Mercer. I’m the Toronto Real Estate Board Director of market analysis. We are three quarters of the way through the 2014, so I think it will make sense to take a few minutes to look back and to see what we have had in terms of sales, average price growth, and how that is differed between different market segments.
At the same time, we also want to look forward both through the end of 2014, but also through 2015, as well. This first slide shows the sales through the first three quarters of the year for each year between 2004 and 2014.
Now, if we look at 2014 in green, we see we are more or less neck and neck with the record level of sales that we saw back in 2007 shown here in red. There is a key reason for this.
We continue to see an affordable situation in terms of housing cost, Mortgage Principle on Interest, property taxes and utilities. And so, we have continued to see a lot of would-be home buyers looking to purchase a home. In fact, if we had seen more listings in the market this year, we likely would have been on a pace for a clean record in 2014.
Moving on to the next slide, what we see here is year-over-year sales growth.
It is interesting to note that the strongest market segment in terms of the sales growth has been condominium apartments. This is a segment of a market where we have seen a lot of listings come online.
But at the same time, we have seen a lot of buyers who looks like have been waiting on the sidelines looking for some of these projects to complete. And when they complete and we see these units listed for sale on Toronto MLS, we have seen a lot of these buyers move in to the market and absorb these units.
Conversely, if you look at the low rise segment of the market, there are purple bars on this chart: detached, semi-detached, and town homes. We have not seen as strong a sales growth. That is not due to lack of demand. That is more due to lack of listings.
So, there are a lot of households out there that just have not been able to find a home that meets their needs. There has been a lot of competition between home buyers for those detached homes and some neighborhoods throughout the city of Toronto and the surrounded regions as well.
This discussion of competition between buyers brings us to price growth. If we look at this first slide dealing with price it shows us the average price through the first three quarters of the year, again between 2004 and 2014.
We see that over that span of time, we have seen enough competition in the market place to see steady upward pressure on the average price growth. Price growth this year has been even stronger. That is as a result of those conditions that we have seen in the low-rise side of the market.
So again, single, semis, and townhomes, where there has been a constrain supply of listings in some parts of the GTA region. As a result, we have seen more grasp upward pressure on the average selling price from that segment.
The next slide shows us the average year-over-year price growth through the first, three quarters. It is almost the exact opposite of what we saw in terms of sales. It is the low-rise segments of the market that are driving these grows.
High, single digit price growth for detached, semi-detached, and town homes, whereas if you look at condominium apartments, which has been the better supply segment of the GTA housing market. We are more, sort of the, mid-single digit mark.
That reflects again, the not quite as much competition between buyers, obviously because we have seen these units complete. That is a nice Segway into the condo segment of the market because I would like to cover that off in a little bit more detail.
Certainly, what we have seen in over the last three years is a lot of cranes in the sky and a lot of discussion of record number of units under construction. At the same time, certainly 2013 and 2014 as well, we are looking at record levels of new condominium apartment completions.
While it is true that we have seen a lot of completions in the condominium apartments segment over the last couple of years, it is important to know that while we have seen this supply come in to the market place as investors held units have been listed on the Toronto MLS system, it is important to know that market conditions have actually tightened over the last year. This is evident when we look at months of inventory.
So, the purple line on this chart represents months of inventory from the condominium apartments segment. The first thing we notice is indeed, the condo market segment is better supplied than the low-rise side, where we are seeing actually our record low in terms of months of inventory.
At the same time, moths of inventory for condos were higher. It is actually not at the highest point that it has ever been. As I said, things have actually tightened up in the market place over the last year.
We can look at the relationship between demand and supply, and price growth in another way. That is on this next chart when we look at the sales-to-new listings ratio juxtaposed against average annual price growth.
Again, when you see the sales-to-new listings ratio spike to the high side, we have seen very strong price growth in those periods of time. Of course conversely, when you see that sales-to-new listing ratio move lower, we see a more moderate pace of price growth. Or even in some situations, we have seen the average price go down on the year-over-year basis.
Right now, we are seeing a sales-to-new listings ratio, more or less in a balanced state. That is why again, we are seeing that average annual rate of price growth somewhere in sort of the mid-single digit mark.
Just a sort of cap off for the discussion on the condominium apartments segment, certainly we have seen more units come into the market place through a record level of completions, both in 2013. It looks like we are set for a new record in 2014 in terms of completions, as well.
But what we have seen is buyers were on the sidelines waiting for these projects to complete, and waiting for these listings to come on to the market place. In which case, they move off the sidelines and start to buy these units in order to live in them.
We have talked about the first, three quarters of 2014, both in terms of the market as a whole, all home types over that period of time. We have also talked about the condominium apartments segment, in particular.
Now, I would like to look forward to think about what we expect to see in terms of sales and price growth, both through remainder of this year, and also through 2015 as well. And so, when we are thinking about sales, it is important to think about affordability because most people purchase a home in Canada and indeed, the GTA through the use of a mortgage.
All the market consensus view is for a slight uptick and boring cost over the next year or so. It is important to point out that we have seen some heightened economical certainty, both on Europe and seeing through the United States as well over the last few weeks.
That could suggest the bond yields could in fact, move lower if this economic uncertainty is sustained. Again, while the consensus view is for a slight uptick. It also would not be surprising to see bond yields remain somewhat flat.
Of course, that would mean that we would not see much movement at all, in terms of mortgage rates. But let us go with the consensus view right now, and think about what that means in terms of affordability for home ownership and the Greater Toronto Area.
If we look at TREB’s affordability indicator, what we are calculating here is the share of the average household income that is going towards Mortgage Principle of Interest, property taxes and utilities, associated with the purchase of an average priced home.
Certainly over the last few years, we have seen the share increase, booth because of rising home prices and also because of an up-tech and boring cost, as well. If we look forward to what we expect to see for 2015, assuming that we do see that, say, 25 to 30 base point increase in boring cost, as well as a further modern increase in the average selling price, we are going to see that share inn around, say, 36 to 37 percent.
While that is higher than what we have seen over the last few years, it is still below the Federally mandated ceiling of 39 percent. On top of this, a lot of home buyers will be benefitting from a significant discount in boring cost off the posted fix rate.
Obviously, that would lead to a lower share of income going towards those major home ownership payments as well. At this is mind, we can now think about what we expect to see in terms of home sales through calendar of 2014 and calendar of year 2015.
I am quite optimistic about a strong fourth quarter of 2014, and so I am expecting to see sales level at or even a little bit of the record that we saw back in 2007. Again, that is just base on the solid affordability picture that we have seen so far this year.
Moving in to 2015, I do expect to see a slight uptick in sales to about 95,000. And so, we will see stronger sales in the first half of the year as we see the handoff from 2014. But then, we will see a bit of a pullback perhaps, in the second half of 2015, as the upward trending affordability indicator starts to have a bit of an impact with some households perhaps, moving to the sidelines.
Thinking about price growth, I am expecting to see both continued strong price increases through the fourth quarter of this year. We will finish off 2014 with an average price of $565,000, representing an eight percent year-over-year increase.
A lot of this increase, again, will be on the back of low-rice home types. Single, semis, and town homes were experiencing very strong competition between buyers. As we move in to 2015, I expect further price growth up to an average of $590,000 next year.
Now, that will represent about a four and a half percent increase on a year-over-year basis. A little bit more moderate than what we saw this year. And again, some of that will have to do with a little bit more supply of listings coming to the market, both on the condo side, but likely on the low-rise front as well.
Also, we may start to see a little bit of a flattening note in sales in the second half of next year, as some buyers move through the sidelines, and as affordability indicator trends upwards a bit further.
With that, our outlook is complete. I look forward to speaking with you again in the New Year. Thank you very much!
The homes in Canada are as diverse as the population of Canada. Here is a list of different types of houses available in Ontario Canada.
The bungalows have been a popular choice amongst Canadian residents given the ease of use as this type housing style lack of stairways with the primary living area contained on one floor and are predominantly low rise home . In Ontario, the bungalows dates from the early 1900’s, but gained its greatest popularity during the post war years of the late 1940’s.
One and one-half Storey:
The one and one half storey was popular post war era but now not very popular unline 2 storey home. Typically, about 60% of the total living area is contained on the first floor. From a cost perspective, this style is more cost effective than the bungalow, by providing more square footage on the same building coverage (or foot print) on the land.
The two storey home is arguably the most popular Home Style in Ontario. This type of home offer a mix of large living area combined with a separate level for sleeping areas. Two storey designs are very popular in the Greater Toronto Area especially the suburbs of Toronto such as Mississauga, Vaughan, Milton, Oakville, Markham and Brampton. These homes offer a vast variation in terms of interior design, roof design and floor layouts.
The split level home is also called Tri-level home is mix of bungalow, split entrance bungalow and the two storey. The most common split-levels built at that time were the side split and the back split. The main level typically contains common living areas (a living room, kitchen, dining room, and/or family room).Side and back splits can involve three or more levels of living area depending on size; e.g., lower family room, main level living room, dining room and kitchen, and upper-level bedrooms.
Attached or Dettached
Attached homes in Ontario are more preferred and have the highest valuation in terms of price and demand. Lot of immigrant population prefer to buy fully detached homes. Detached homes as the name says are detached homes without sharing all wall with neighbours.
Semidetached homes are another popular home style where homes are attached to neighbours home on one side while the other side is detached.
Row housing has also become a popular alternative in which three or more units are joined together by common party walls. Each townhouse unit typically contains a full basement, main level living area and upper level for bedrooms. Many variations exist in the marketplace. Town houses are attractive from a developer’s perspective given higher densities available. Two examples are illustrated. Townhouses are normally grouped in sets of three to six units. Townhouses are either offered as freehold (the owner holds title to the structure and the land) or condominium (the unit owner owns the structure as defined in the condominium documentation) and shares the land as a common element with other unit owners.
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Toronto Condo Market is not slow. Going against the speculations, the Toronto condo sales have registered an impressive growth of 12.9 per cent year-over-year in the third quarter of 2014. he average selling price for Q3 condominium apartment sales was $359,352 – up by 5.7 per cent compared to the average of $339,878 in Q3 2013. The average selling price was highest in the City of Toronto, at $382,210, representing a yearover- year increase of 6.1 per cent.
Total registered sales stood at 5,954 out of which City of Toronto had the Lion’s share at 4,233 followed by the Region of Peel at distant 807 units. Toronto had a Condo Vacancy rate of 1.7% while region of Durham had the rate of 0.5%.
So lot to cheer and good new for investors and buyers looking to invest in lucrative Condo Market.
TREB announced it’s report for August 2014 showing an impressive surge of 7.6 per cent compared to the same period in August 2013. There were
3,504 sales reported through the TorontoMLS system during the first 14 days of August. Tight market conditions, especially for detached and semi-detached houses, drove strong price growth in
the first half of August. The overall average selling price was up by 9.4 per cent year-over-year to $538,530. The strongest price growth was experienced in the detached market segment, with the
average detached price up by 12.3 per cent year-over-year.
Here is the list of sales per City:
City of Toronto : 1,285
Rest of GTA: 2,219
In 2012 the sales in “Toronto condo market” looked like this: Toronto condo market represented 51% of the sales and detached homes represented 26% of the sales. There are numerous reasons behind the popularity of Toronto condos. The topmost reason among them is the affordability factor and then comes the lifestyle choices for the younger generation as they lead very busy lifestyles and perhaps don’t have sufficient time to devote towards the maintenance issues that a house entails plus condominiums provide a great sense of community and security.
What are people actually buying when they are buying Toronto condos?
The primary preference for investors remains one bedroom and dens i.e. 1+1 and this preference clearly dominates by a large margin. This is because of the obvious reason that they can rent the unit as a 2 bedroom solution which would appeal greatly to students. In the recent years there is tremendous increase of foreign students coming to Toronto for various studies. The secondary preference is the 1 bedroom unit followed by the 2 bedroom units. In the present scenario there is not a great demand for 3-bedroom units but probably as the years pass on and affordability becomes more of an issue it is estimated that families will turn to 3 bedroom units as a feasible choice.
Experts say that there are some strong market fundamentals for 2013. There are total 237 new high-rise builds under construction which represents 60,713 new units approximately. There is another surprising statistics which reveals that by the end of 31st Dec 2013, 88% of all those units are expected to be sold out. Statistical research highlighted some important aspects of the Toronto Condo market which says that if the housing needs keep pace with our population growth, then housing supply is not sufficient to meet this growth.
Research has revealed Canada as the most urbanized country in the world. Canada is 30% ahead of the United States and just ahead of Australia in terms of urbanization. Predictions for bank interest rates for 2013 are that interest rates will remain low for the foreseeable future. For the 5th consecutive year Canada’s banks have been rated as the most sound in the entire world. There are number of Toronto condo projects seem to be coming up to the market this spring accelerating the demands on the construction industry. 2007 (beginning of 2008) was remarkable year in the history of the Toronto condo market. This year had record breaking sales numbers week long line ups to purchase preconstruction condo units. With the current state of the economy south of the border it is inevitable that the Canadian economy will be affected by the United State’s slowdown. Investors are wondering what this means for the Toronto Condo market and are we in a condo bubble ready to pop?
Undoubtedly Toronto Condos make a smart Investment due to the following reasons –
- Lending Institutions – Most of the Canadian banks has tighten up terms and conditions for lending than U.S. counterparts to ensure that the borrowers can truly afford their financial obligations. In the year 2006 and until June 2007 only 1 in 400 mortgages went into arrears in Toronto. It is interesting to note that the Interest rates remain low and are expected to decrease in the near future, keeping Toronto condos affordable.
- Affordability – Majority of fresh buyers and young families are turning towards condos as the price of single detached homes continues to rise. In Feb 2008, the average selling price of a detached resale home in the central regions of downtown Toronto and North York was over $800,000. This price made it virtually impossible for first time and young buyers to become home owners in the core areas. It is said that Condos remain the most affordable ownership option for central urban living.
- Diversified Labour Market – Toronto has diversified and stable employment market offering numerous jobs in finance, professional, insurance, scientific and technical services out numbering those in the manufacturing units. Toronto also has remarkable employment levels with unemployment levels at about 6.8% in 2007. This diversified and stable employment market is less vulnerable to widespread job loss than surrounding suburban cities.
- Population Changes – Toronto being the capital of Canada is among the largest city having population of over 5 million residents in 2006 which is constantly growing and changing day by day. In 2007-2010 its population is expected to increase by an average of 1.9% annually creating a demand for new housing. This changing population is creating a demand for different types of housing. Households already exists are downsizing as the children of the baby boomers are leaving the home.
Hence Condos remain the most affordable ownership option for urban living. Recent demographic changes along with a growing population will continue to create a healthy demand for Toronto Condos. Number of construction companies has helped to fuel a condominium construction boom in “Greater Toronto Area” with the Toronto condo market.
The real estate market in Toronto is still going already strong. The huge influx of quality immigrants coupled with the strong faith of the foreign investors is really helping the Canadian real estate market. As per the latest stats, Toronto real estate market is going at the rate of over 7% over the year which is by far one of the best markets not only in Canada but also in North America. The average selling price was $523,036 across the GTA, compared to $497,130 in 2012. Neighboring municipalities such as Vaughan, Markham, Mississauga, Brampton, Milton, Ajax, and Kitchener Waterloo area has also seen unprecedented growth in the recent years. Investors consider real estate market in Canada as one of the hottest investment trend and therefore a lot of money is being poured into this market. Some investors are even reporting as much as 20% growth over the year which is really healthy sign that the market is booming. Immigration is one of the biggest factors to drive this growth. Immigrants from countries such as China, India, Middle East, Mexico etc. are pouring in a lot of money from back home into the Canadian real estate market. Considering the overall trends now is the best time to buy property in the GTA. Contact us if you’re looking to invest or buy a home for yourself. We promise to help you secure the best property with the maximum return on investment.
Toronto is one of the best cities in the world to live in. Toronto is the largest city in Canada and the fourth most populous city in North America having a population of over 2.6 million people coming from various parts of the World. Toronto can be called a true Cosmopolitan city as it is one of the most popular immigration destinations of the world. Why Toronto is considered as one of the best cities to live in:
Economic Super Power: Toronto is an international center for business and finance having offices of all major International corporations and banks. The Toronto Stock Exchange is the world’s seventh-largest stock exchange by market capitalization which tell of it’s an economic superpower. The economy of the city is something to write about. Big companies, head offices, numerous law firms, atmospheres for trading etc all are present in the city.
Safety: Toronto despite being one of the largest cities in the world has one of the lowest recorded crimes. The city is also blessed with a population that is heterogeneous with diverse culture living together in peace. Since a lot of people travel into the city, they bring in a different culture but the most thrilling of all these is that although the city is heterogeneous, they all live together harmoniously.
Good Transportation: Toronto is well connected to all major world destinations via Air route. There are a number of municipal expressways and provincial highways that serve Toronto and the Greater Toronto Area.
Who would not like to live in a city with a favorable and stable climate? Of course, the weather comes with a cold winter and humid summer but natural disasters like earthquakes, tsunamis, hurricane, tornadoes etc are actually alien to those living in Toronto.