January was a strong month for Toronto's real estate. TREB reports an 11.8 per cent increase in sales compared to last year. Condos lead with 26.7 per cent increase in sales over low-rise home types.
The inventory shortage is a serious problem and it just keeps pushing the prices further up. The number of active listings dropped by 49.5 per cent of what was reported last year. The average price for all major home types was up by 22.3 per cent, amounting to $770,745.
It's not surprising that sales are up again this month over last year, especially with the number of listings available being half of what it was last year. This lack of product will certainly keep the prices rising and activity sharp, but contrary to popular belief, it is not a market that REALTORS like. Nightly our team is out on multiple offers and when we are the listing agents, it is great for our sellers, but most of them are selling to buy.
One piece of advice that I give is: always try to buy and sell in the same market, high or low, just focus on the difference in price between the sell and buy, and you will be fine.
The basic laws of economics is kicking in, we have a lack of supply and an overwhelming amount of demand causing an upswing in price. Frustrated buyers have started giving up on freehold and are opting for larger 2 bedroom condominiums. This shift is pushing condominiums into multiple offers and record sale prices. Do not let this dishearten you, the best thing is not to wait but to enter the market and start swimming. If you decide to wait you will soon realize that you will always be chasing the market.
TREB reported that at the end of January there were only half the amount of active listings than this time last year. So, we are still experiencing a serious supply issue. We have noticed in the last couple of weeks that condominiums are selling in some cases 5-10 per cent over asking as buyers are realizing and being reminded that there is no point chasing this market. Canada will outpace most G7 economies through 2017. Therefore, not just foreign buyers but local buyers are investing in what is a strong market here in the GTA. However, it is a Catch 22 for most of our clients as they are unable to sell until they buy in most cases.
If you thought it was a tight market in 2016 (that is, a "sellers' market" with more buyers than sellers), watch out for 2017! So far this January I have been on two offer presentation dates for a buyer client of mine - the first one had 11 offers (there was going to be 12 but one of the buyers rescinded their offer when they learned how many offers there were) and the second one had 22 offers!! Well, they both sold way over asking as you can imagine.
With even less inventory so far in 2017, this appears to be an even more competitive year for buyers. But, on the flip side, this is going to be the BEST year ever if you are selling and an ideal time to profit from this sellers' marketplace (remember: selling your primary residence is capital gain exempt!).
I have been showing higher price properties to my clients. Even 3M+ market is moving fast. Two properties over 5M were listed last year and relisted last week, both sold in a week. The supply shortage is a serious problem in this market.