January 2011 - Market Watch

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GTA REALTORS® Report Monthly Resale Housing Market Figures

TORONTO, February 4, 2011 -- Greater Toronto REALTORS® reported 4,337 transactions through the TorontoMLS® system in January 2011. This result was 13 per cent lower than the record result reported in January 2010.
“While off the record pace experienced a year ago, the GTA resale market has started the year on a solid footing. Home buyers in Toronto and surrounding areas continue to benefit from a diversity of housing types for sale at many different price points,” said TREB President Bill Johnston.

The average selling price for January 2011 sales was $427,037, representing an increase of over four per cent compared to the average of $409,058 reported in January 2010.

“The average selling price is expected to grow at a moderate pace in 2011. Growth rates in the three to five per cent range will be sustainable from an affordability perspective,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Greater Toronto REALTORS® are passionate about their work. They adhere to a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Serving over 31,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board. Greater Toronto Area open house listings are now available on www.TorontoRealEstateBoard.com.

October 2010 - Market Watch

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September 2010

GTA REAL TORS® Report Mid-Month Resale Housing Figures

TORONTO, September 16, 2010 - Greater Toronto REALTORS® reported 2,623 sales through the Multiple Listing Service® (MLS®) during the first two weeks of September

2010. This represented a 22 per cent decrease compared to the 3,361 sales recorded during the same period in 2009. Year-to-date sales amounted to 65,455, representing a six per cent increase compared to 2009.

"Sales remain below the record pace we experienced in the second half of 2009. The prospect of higher interest rates and new mortgage lending guidelines resulted in higher than normal sales in the first few months of the year. To balance this out, the pace of sales has slowed in the second half," said Toronto Real Estate Board President Bill Johnston.

"It is important to note that year-to-date sales remain above the number reported through the same period last year," added Johnston.

The average price for September mid-month transactions was $412,367 - up five per cent compared to the average of $393,818 recorded during the first 14 days of September 2009.

"Under current lending standards, the average selling price is affordable for a household earning the average income in the GTA. The annual price growth we have been experiencing has been justified by this positive affordability picture," said Jason Mercer, TREB's Senior Manager of Market Analysis.

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Broker/Manager
Coldwell Banker Terrequity Realty, Brokerage*

No Bubble to Burst

by Bill Johnston, President of the TREB

September 11, 2010 -- In August, there were 6,232 Multiple Listing Service® (MLS®) transactions through the Toronto Real Estate Board, which represented a 22 per cent decline compared to August of 2009. The average price for these transactions was $411,012 - up six per cent compared to last year. Through the first eight months of the year, sales were up by eight per cent and the average selling price was up by 11 per cent compared to the January to August period in 2009.

Since May, sales have been lower than last year's results. At the same time, the average selling price has continued to grow. This has led some individuals and organizations to suggest that a housing price bubble has emerged and that it is ready to pop at any time. An oft cited argument goes something like this:

"Average selling prices have been rising above the rate of inflation for the better part of the last decade, so we should expect the average selling price to fall."

I asked Jason Mercer, TREB's Senior Manager of Market Analysis to comment on whether or not house prices are currently in a bubble in the GTA. Here are some interesting points he put forth :

"Many recent analyses addressing housing markets in Canada have not fully examined the interplay between home prices, borrowing costs and incomes. In the past, home prices have dropped markedly when a household earning an average income could no longer afford to carry a mortgage on an average priced home," said Mercer.

"As a rule of thumb, lenders will often consider a mortgage affordable if the annual principal and interest payments coupled with property taxes and utilities are less than 32 per cent of a household's gross income. Average home ownership costs have been less than or equal to 32 per cent of the average household income in the GTA for 14 of the last 15 years.' It is no coincidence that home prices have grown at a sustained clip over this same period," continued Mercer.

"The last time we experienced a prolonged drop in home prices was in the early 1990s when high home prices and mortgage rates combined to push the average cost of home ownership to more than 50 per cent of the average gross household income. A large increase in home prices and borrowing costs coupled with flat or declining household incomes would have to take place before a prolonged drop in home prices was once again justified," concluded Mercer.

Ownership housing in the GTA is certainly more affordable today than in the early 1990s when we experienced a correction in home prices. During that period of time sales dropped dramatically, as affordability eroded, while listings remained very high . With a lot of choice in the marketplace, selling prices were negotiated downward . New listings spiked earlier in the year, but have Since dropped back off. This means that we continue to see enough buyers competing for listings to push home prices up year-over-year.

I will continue to discuss the different components of housing affordability in future articles as we progress through the fall market.

' Author's Note: The TREB affordability indicator assumes the purchase of an existing home for the average selling price with a 20 per cent down payment, a five year fixed rate mortgage at the average rate, a 25 year amortization period and the estimated average property taxes, utility costs and household income.

Information provided by
David Yunker, CRB (Click here to contact agent)
Broker/Manager
Coldwell Banker Terrequity Realty, Brokerage*

July 20,2010

Toronto house sales sink 23% in JuneToronto-area Realtors sold 8,442 resale homes in June, a 23 per cent drop from the level of the same month a year ago. Though down from recent highs, real estate sales remains high in Canada's largest city. Year-to-date sales through June were up 23 per cent to 50,455 compared to the first six months of 2009.

CBC Wed Jul 07 2010 - Toronto Star - National Post - Canada News Wire

Home sales continue to cool in June Statistics released by The Canadian Real Estate Association show that the number of newly listed homes and sales activity declined in June 2010. Seasonally adjusted national home sales activity via the Multiple Listing Service(R) (MLS(R)) Systems of Canadian real estate Boards receded 8.2 per cent in June from the previous month. Led by lower activity in Toronto and Calgary, sales declined in almost 70 per cent of local markets.

Canada News Wire Fri Jul 16 2010 - Financial Post - Financial Post (second article)

Q&A with TD Economist Pascal Gauthier: What's next for Canada's housing market?Canada's housing market is cooling off after its record-setting pace in the post-recession period. The Canadian Real Estate Association said Thursday that existing home sales fell 8.2 per cent in June from a month earlier, largely because of a slower pace in Toronto and Calgary. The national average resale price dipped 1.2 per cent, to $342,662, from May's record $346,881.

Globe and Mail Fri Jul 16 2010

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Frank Petriglia   (Click here to contact agent)
Coldwell Banker Terrequity Realty

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David Yunker, CRB (Click here to contact agent)
Broker/Manager
Coldwell Banker Terrequity Realty, Brokerage*

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Frank Petriglia   (Click here to contact agent)
Coldwell Banker Terrequity Realty

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Frank Petriglia   (Click here to contact agent)
Coldwell Banker Terrequity Realty

Fall Market Forecast

The GTA real estate market continues to outperform 2008 results in an impressive fashion.  In August of this year, the Toronto Real Estate Board (TREB) reported 8,035 house sales, up 27% from the 6,318 reported in 2008.  What is more significant is that this year, TREB has reported approximately 60,000 house sales in the GTA market to the end of August.  Even if we experience a conservative Fall with sales in the area of 20,000 homes, TREB would easily exceed last year’s total unit sales by at least 5,000 units.  TREB’s current estimate is that the market will achieve between 80,000 to 85,000 by the end of the year (versus over 76,400 transactions last year).

The average price in August 2009 hit $338,000, which represents a 6% increase over the 2008 average selling price of $318,000 in August of the prior year.  The increases in prices are to be expected given the significant shortage of inventory (1.9 months on hand).   The days on market (another measure of inventory) averaged 29 days in 2009 versus 36 days in 2008.

Yet, we have seen a distinct trend in the market from the peak in June where the average price of a GTA property hit $345,000 and almost 11,000 units (10,955 to be precise).  The big question is how does the Fall look?  Will this Fall be a repeat of 2008?  Or will the low interest rates continue to drive the real estate market?

To answer this question we have to examine which direction the economy is going, and what impact will it have on the real estate market in the GTA.  The interest rate cuts by the U.S. and Canadian Federal governments provide a significant economic stimulus, which has continued to drive the market for big-ticket sales such as homes and cars.  These rate cuts have had a major impact on the Canadian market place. Nonetheless, the economic results in the U.S. continue to lag.  The demand for big-ticket items has seen no significant change in the U.S.  This lag continues to depress the Canadian manufacturing sectors, which export to the U.S. (i.e. autos).

In spite of Ben Bernanke’s recent comments, there are many indications that the recession in the U.S. has not ended, especially in the minds of the consumer.  Unlike Canada, consumer confidence is not strong, and this translates into a lack of manufacturing demand.  And this in turn affects job growth not only in the U.S., but here in Canada.  In fact, Canadian job growth is not expected to see any significant change until the second half of 2010, when economic forecasts predict a reversal of this trend and growth in Canadian employment numbers.  When the consumer price index (CPI) begins to show positive continued growth, we can expect tightening of the monetary policy and increases in interest rates to reduce the fear of inflation.  

What does all this mean to the real estate consumer?  Quite simply, mortgage rate increases impact home affordability, so when these increases come – and at some point they will – we can expect the market to slow down from the active pace we have seen in recent months.

In summary, the fourth quarter (the fall market of 2009) looks very positive from a real estate perspective.  Both governments will expect to continue to keep low interest rates, which provide a huge incentive for new buyers and move-up buyers to jump in the real estate market.  We expect this trend to continue until spring 2010.  At that point, forecasts call for positive job growth and the resulting growth in the CPI, which would change the government’s focus from reviving the economy to controlling the inflation through higher interest rates.  Don’t miss this six-month window of opportunity, especially as the typical November/December slow down approaches.

Andrew C. Zsolt, Ca, Mba, Fri, is the founder and Broker of Record of Coldwell Banker Terrequity Realty, Brokerage – the number one Coldwell Banker franchise real estate brokerage in Canada. Andrew has made appearances in The Globe & Mail as well as The Toronto Star as a notable real estate expert.

Info written by Andrew C. Zsolt, Broker of Record, (Click here to contact agent)

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David Yunker, CRB (Click here to contact agent)
Broker/Manager
Coldwell Banker Terrequity Realty, Brokerage*

September 2009

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Frank Petriglia   (Click here to contact agent)
Coldwell Banker Terrequity Realty

June 2009

GTA Resale Housing Sales Up 19 Per Cent in the First Half of June

TORONTO, June 17, 2009 - Greater Toronto REALTORS® reported 5,185 transactions in the first half of June – an increase of 19 per cent compared to the same period last year.

"Households in the GTA have become more confident in purchasing a home over the past three months," said TREB President Maureen O’Neill. "Affordability, due in part to very low borrowing costs, has played a key role."

The average price for MLS® sales was $407,716, up by two per cent compared to last year. "Heightened interest in ownership housing this spring has solidified resale home prices," according to Jason Mercer, TREB's Senior Manager of Market Analysis. “The number of home buyers has been high relative to the number of listings, pushing the average price above last year's level.”

Summary Of Mid-June Sales And Average Price

June June

2009 2008

Sales Average Price Sales Average Price

City of Toronto ("416") 2,023 $449,946 1,733 $439,469

Rest of GTA ("905") 3,162 $380,698 2,641 $371,686

GTA 5,185 $407,716 4,374 $398,542

Source: Toronto Real Estate Board

For a complete copy of the Market Watch Report visit www.TorontoRealEstateBoard.com

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Alena Gedeonova  (Click here to contact agent)
Coldwell Banker Terrequity Realty

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February 2009 

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Agnes Chaitas (Click here to contact agent)
Coldwell Banker Terrequity Realty 

GTA Resale Housing Stable in July

At $371,427 the average price increased slightly more than one per cent from $366,012 recorded in July 2007 and nine per cent from the $342,034 figure of two years ago. In the City of Toronto the average price of $395,342 increased less than one per cent from the July 2007 price of $395,044 and 10 per cent from the July 2006 figure of $360,409. In the 905 Region the average price increased three per cent to $355,401 compared to the July 2007 figure of $345,967. This also represents an eight per cent increase from the July 2006 average of $329,644.

“Sales declined 12 per cent last month from the best-ever July 2007 record of 8,912 but increased 10 per cent from the 7,082 sales transacted in July 2006,” said Ms. O’Neill. “Comparing July 2007 with July 2006, sales increased by 26 per cent.”

In the City of Toronto 3,132 sales were recorded, down 14 per cent from July 2007’s 3,640 transactions but up 10 per cent from the 2,852 sales recorded two years ago in 2006. Comparing July 2007 with July 2006, a period before the Land Transfer tax went into effect in Toronto, sales increased 28 per cent. In the 905 Region there were 4,674 transactions, down 11 per cent from July 2007’s 5,272 sales but up 10 per cent from the 4,230 sales recorded in July 2006. Comparing July 2007 with July 2006, sales increased 25 per cent. From a year-to-date perspective, the GTA’s 51,249 sales in 2008 have declined 14 per cent from the 59,339 reached at this time a year ago.

Certain neighbourhoods throughout the GTA experienced increased sales activity in July. In Whitby (E15) sales increased 22 per cent from July 2007, based on strong sales in most housing types. Brampton East (W24) saw a 12 per cent increase, based primarily on semi-detached home sales. Strong detached home sales drove Uxbridge (N16) to a 23 per cent increase compared to a year ago. The Annex (C02) experienced a 29 per cent sales increase due to strong detached home and condominium apartment sales. In addition to stable prices, the list to sale price ratio, at 98 per cent, remains unchanged from a year ago.

“While homeowners continue to see healthy returns, it is taking slightly longer to achieve a sale; the average time on market has increased to 33 days compared to 31 days a year ago,” said Ms. O’Neill. “This may be due to that fact that there is now more choice available to homebuyers; there are currently 26,543 active listings, a 28 per cent increase from a year ago.”

Created: 08/06/2008 Modified: 08/06/2008

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Kristyn Wong-Tam (Click here to contact agent)
Coldwell Banker Terrequity Realty 

From RBC's Special Report on Housing Affordability across Canada published March 2008:
 
Toronto - more moderation in 2008

Affordability across Toronto deteriorated modestly for bungalows and townhomes and stabilized for condos and two-storeys. An overall improving affordability trend is expected in 2008 as new home and resale markets cool off amidst an increasingly lower mortgage rate environment. It is difficult to speak of the Toronto market without drilling into the different pockets of strength within the city. The core Toronto area remains tight and continues to bias the headline numbers up. Outside of the core, several other sub-regions will see a continued moderation in average house price growth in 2008. To date, the condo market has proved quite resilient with house prices still growing at a 10% year-over-year pace. However, a sizeable increase in supply coming to market over the next two years is expected to shave some of the excitement off price growth.

Mortgage Carrying Costs

House Prices

Resale Market 

Ontario - slower economy, improved affordability

As the province teeters on the brink of recession through 2008, we expect the impacts of slower growth (largely stemming from slower job growth and wage gains) to restrain housing activity in 2008. The annual pace of income growth for the fourth quarter of 2007 came in at the slowest pace among the provinces. Housing starts are still expected to remain elevated but should decline from 2007 levels. Affordability conditions deteriorated across all home segments but the pace of deterioration slowed. We expect this trend to continue in 2008 as some affordability relief materializes through a lower mortgage rate environment, softer price gains, and an overall slower economic growth profile.

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Jackie Scott (Click here to contact agent)
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Coldwell Banker Pinnacle Real Estate

September 2007

Toronto Stats for September 2007

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Nancy Thornton (Click here to contact agent)
Coldwell Banker Southlake Realty