The tale of two cities continues, as GTA remains polarized by its real estate market. The 905 area has seen a decrease in price and increased days on market compared to 2017. But the City of Toronto area is doing great and homes are still selling, buyers are interested and always eager to look on a property.
Overall, Toronto and the GTA is not doing bad at all if we take into consideration more than just last year's record sales and crazy market. Great example is the average price, when we compare it with years before 2017. Current average price for a home is $805,320. It might be 6.6 per cent less than in 2017 when the average price was $862,149, but it's considerably higher than $752,100 in 2016 or $649,599 in 2015.
Current average sales might be down by 22.2 per cent, with "only" 7.834 sales in May 2018, but it's stabilizing relatively successfully since 2017 and 2016 were record years when it comes to sales and nothing stopped the crazy market, not even summer slump. In fact, the sales are so much higher than at the beginning of the year, when there was only 4,019 sales in January and 5,175 sales in February 2018. Seems like Toronto is finally shaking off the "stress test" psychological impact.
The big problem for Toronto, however, remains the same, no matter the sales or prices. May supply of new listings was down by 26.2 per cent, creating a problem of finding ideal home that will meet all the buyer's needs. TREB's current president Tim Syrianos reported this situation creates an over-housing issue with so many spare bedroom going unused and so many buyers not being able to find a home that would fit their need. According to TREB, there might be more than 5 million extra bedrooms across Toronto, that go unused. Yet, potential sellers don't list these homes for sale, because they feel like there are not enough alternative housing types for them across Toronto. This way, the "missing middle" problem, that might bridge the gap between condominiums and detached homes, remains unsolved for now, as builders across Toronto focus mostly on condo buildings.
But it's no wonder, investors and developers love condominiums so much. Currently, it remains the strongest segment of the real estate market. With 1,745 re-sale condo apartments sold only within the city this month, and many more sold as new developments, pre-construction or inside the 905 belt, the sales of Toronto condos are doing great, despite being slightly down by 15.5 per cent. The average condo price, however, remains the only segment where average price keeps rising. You can now buy an average Toronto condo for $562,892, which is 5.7 per cent more than last year. Not mentioning 2016, when the average price for a condo apartment was only $413,925. Based on these numbers and the current condo-craze, that doesn't seem to stop, new condos might still be a very wise investment.
Jim Burtnick, Broker, SVP-Sales
The May real estate numbers again point to a "tale of two markets". Houses in the old city of Toronto continue to sell, often in multiple offers if they are in AAA locations. Yet, in the 905 belt surrounding the city, it is entirely a different story with listings sitting on the market much longer and prices declining. Condominiums in the city are continuing their upward trajectory in price appreciation as 1st-time buyers choose city living over long commutes to the suburbs. We expect to see the number of sales and prices continue to build going forward, albeit at a more moderate pace and with the 416 city centre leading the way. You really want to work with a Realtor(R) who is experienced and has navigated a fluctuating market such as we are in now.
Rizwan Malik, Sales Representative, SVP-Sales
The Toronto market is still strong and correctly priced properties are selling quickly and often in multiple offers. I was personally involved in a multiple offer situation last week and the unit had 15 offers!!! To even suggest the sky is falling would be a mistake. The shift from last year to this year had been more supply and a change in the mindset of the buyers. There are a lot of different forces at play. Be sure to contact us and it would be our pleasure to help you navigate this market.
Stephanie Peralta, Sales Representative
The 905 belt has seen a decrease in price and increased days on market compared to 2017. However, since the beginning of 2018, the average price in peel has gone up on average 2.4% month over month and the average days on market has gone down from 32 days in January to 19 days in May. Key locations in Peel, are seeing high turnovers and in some cases multiple offers. Townhouses and Semi Detached properties with basement apartments are flying off the market. Even with the new stress test rules introduced at the beginning of the year, the market has responded well, with qualified buyers entering the housing market without hesitation.
Richard Silver, Sales Representative, SVP-Sales
What is really interesting is when you look at the latest TREB Market graphs which show the last 4 years. If you take 2017 out of the equation you see that the market has had a good increase and the sky is not falling: