For the first time in many months January’s performance did not exceed the performance for the same month from the year before. Since the spring of 2013 each month has produced a positive variance, in some months exceeding more than 20 percent, compared to the same month the year before. Notwithstanding that we witnessed a negative variance in January, the reason for that variance was not due to a lack of demand. Rather it was due to a terrible inventory shortage which is delighting those that are placing their properties on the market for sale, and tormenting the many buyers with too few options in Toronto and area’s residential resale market.
 
In January 4,135 properties were reported sold. Last January 4,229 properties were sold, a decline of 2.2 percent. The only property type that produced a significant positive variance was condominium apartment sales. Detached home sales declined by 6 percent, and semi-detached property sales declined by 7.7 percent. These declines were noticeable both in the City of Toronto and in the 905 region. Condominium apartment sales were up by 7.4 percent in the City of Toronto, with a not so pronounced increase in the 905 region. The reasons for this fractured market is simple: availability and affordability of condominium apartments as compared to freehold properties. At the end of January there were 4,871 active listings of properties for sale in the City of Toronto. Of these properties 3293 were condominium apartments, or almost 70 percent of the total available supply of resale housing inventory.
 
February is not likely to see an improvement on the supply side. In January 8,822 new properties became available for sale in the greater Toronto area. That’s almost17 percent fewer than the 10,577 that became available in January of 2013. That number of new listings is far less than the properties need to meet demand. The beginning of February will see only 11,903 active listings, 16.4 percent fewer listings than were available last year at this time. Toronto’s current supply of available properties equates to only 2.6 months of inventory, for less than a balanced market. It is not surprising therefore that average sale prices are increasing at levels that are creating concern.
 
In January the average sale price for all properties sold in the greater Toronto area reached $526,528, 9.2 percent higher than the average sale price in January 2013. Last year the average sale price was only $482,080. The average sale price for the greater Toronto area is high, but somewhat deceptive. The average price of a detached house in the City of Toronto came in at $888,210, 14.8 percent higher than last year. The average price for semi-detached properties rose to $622,319. Although this represents only a 6.1 percent increase, the smaller increase was due to supply, not demand. In the City of Toronto only 134 semi-detached properties were reported sold out of an active listing supply of only 152 properties, an alarmingly low number of available properties.
The most affordable housing type available on the market was condominium apartments. The average sale price for condominium apartments in January was $366,020, almost half the cost of a semi-detached home. Yet even in this sector there were substantial price increases. In January the average price of a condominium apartment rose by 7.6 percent in the City of Toronto, and a stunning 11.2 percent in the 905 region. The Toronto resale market is now predominately composed of condominium apartments. Almost 70 percent of all sales and all available inventory in the City of Toronto are condominium apartments. That number will only continue to grow. Thousands of new units are being registered annually, and many of those will, as first time buyers look to larger move up space, become available for resale. The infusion of new freehold properties into the City of Toronto market place is practically at a standstill.
 
It would appear that the higher end of the market is becoming more active than previous months. In January 266 properties having a sale price of $ 1 Million or more were reported sold. This compared favourably with only 208 reported sold in 2013, and 201 in 2012, increases of 28 and 32 percent respectively. The bulk of these properties were detached houses, although 14 condominium apartment sales also fell into this category of sale prices.
 
Looking forward, February’s results are likely to be similar to January’s. Supply will be the concern. Detached and semi-detached properties that become available, particularly in desirable areas, will see competing bids and sale prices exceeding the asking price. In fact competing buyers are now venturing into neighbourhoods that were historically not regarded as desirable locations. A Toronto journalist recently referred to this phenomenon as the “Brooklynization” of Toronto.
 
From this corner we continue to be concerned about the continual rise of average sale prices and how they affect affordability. Employment income is only increasing by about 2.5 percent annually, disproportionally low compared to average sale prices. Historically low interest rates have bridged this divide, but even low interest rates are incapable of overcoming affordability issues if average house prices continue to rise as they did in January. The only way this problem can be resolved is more inventory. Unfortunately more properties for buyers to purchase are not making their way to the market place. If you can’t find a place to buy you are unlikely to list your current home for sale.
 
 
Prepared by: Chris Kapches, President & CEO
 
(Image provided by http://torontoluxuryrealestatelistings.com/)

  

For the first time in many months January’s performance did not exceed the performance for the same month from the year before. Since the spring of 2013 each month has produced a positive variance, in some months exceeding more than 20 percent, compared to the same month the year before. Notwithstanding that we witnessed a negative variance in January, the reason for that variance was not due to a lack of demand. Rather it was due to a terrible inventory shortage which is delighting those that are placing their properties on the market for sale, and tormenting the many buyers with too few options in Toronto and area’s residential resale market.
 
In January 4,135 properties were reported sold. Last January 4,229 properties were sold, a decline of 2.2 percent. The only property type that produced a significant positive variance was condominium apartment sales. Detached home sales declined by 6 percent, and semi-detached property sales declined by 7.7 percent. These declines were noticeable both in the City of Toronto and in the 905 region. Condominium apartment sales were up by 7.4 percent in the City of Toronto, with a not so pronounced increase in the 905 region. The reasons for this fractured market is simple: availability and affordability of condominium apartments as compared to freehold properties. At the end of January there were 4,871 active listings of properties for sale in the City of Toronto. Of these properties 3293 were condominium apartments, or almost 70 percent of the total available supply of resale housing inventory.
 
February is not likely to see an improvement on the supply side. In January 8,822 new properties became available for sale in the greater Toronto area. That’s almost17 percent fewer than the 10,577 that became available in January of 2013. That number of new listings is far less than the properties need to meet demand. The beginning of February will see only 11,903 active listings, 16.4 percent fewer listings than were available last year at this time. Toronto’s current supply of available properties equates to only 2.6 months of inventory, for less than a balanced market. It is not surprising therefore that average sale prices are increasing at levels that are creating concern.
 
In January the average sale price for all properties sold in the greater Toronto area reached $526,528, 9.2 percent higher than the average sale price in January 2013. Last year the average sale price was only $482,080. The average sale price for the greater Toronto area is high, but somewhat deceptive. The average price of a detached house in the City of Toronto came in at $888,210, 14.8 percent higher than last year. The average price for semi-detached properties rose to $622,319. Although this represents only a 6.1 percent increase, the smaller increase was due to supply, not demand. In the City of Toronto only 134 semi-detached properties were reported sold out of an active listing supply of only 152 properties, an alarmingly low number of available properties.
The most affordable housing type available on the market was condominium apartments. The average sale price for condominium apartments in January was $366,020, almost half the cost of a semi-detached home. Yet even in this sector there were substantial price increases. In January the average price of a condominium apartment rose by 7.6 percent in the City of Toronto, and a stunning 11.2 percent in the 905 region. The Toronto resale market is now predominately composed of condominium apartments. Almost 70 percent of all sales and all available inventory in the City of Toronto are condominium apartments. That number will only continue to grow. Thousands of new units are being registered annually, and many of those will, as first time buyers look to larger move up space, become available for resale. The infusion of new freehold properties into the City of Toronto market place is practically at a standstill.
 
It would appear that the higher end of the market is becoming more active than previous months. In January 266 properties having a sale price of $ 1 Million or more were reported sold. This compared favourably with only 208 reported sold in 2013, and 201 in 2012, increases of 28 and 32 percent respectively. The bulk of these properties were detached houses, although 14 condominium apartment sales also fell into this category of sale prices.
 
Looking forward, February’s results are likely to be similar to January’s. Supply will be the concern. Detached and semi-detached properties that become available, particularly in desirable areas, will see competing bids and sale prices exceeding the asking price. In fact competing buyers are now venturing into neighbourhoods that were historically not regarded as desirable locations. A Toronto journalist recently referred to this phenomenon as the “Brooklynization” of Toronto.
 
From this corner we continue to be concerned about the continual rise of average sale prices and how they affect affordability. Employment income is only increasing by about 2.5 percent annually, disproportionally low compared to average sale prices. Historically low interest rates have bridged this divide, but even low interest rates are incapable of overcoming affordability issues if average house prices continue to rise as they did in January. The only way this problem can be resolved is more inventory. Unfortunately more properties for buyers to purchase are not making their way to the market place. If you can’t find a place to buy you are unlikely to list your current home for sale.
 
 
Prepared by: Chris Kapches, President & CEO
 
(Image provided by http://torontoluxuryrealestatelistings.com/)

  

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