The Toronto Real Estate Board President’s Col­umn as it appears in the Toronto Sun’s Resale Homes and Con­dos section

Through­out the next year, I will be bring­ing you news on the Toronto real estate mar­ket and there couldn’t be a more excit­ing time to be tak­ing the reins as Pres­i­dent of the Toronto Real Estate Board.

Greater Toronto Real­tors reported 10,955 sales last month, mak­ing it the best June on record. Com­pared to June 2008 when 8,600 homes changed hands, last month’s sales increased an incred­i­ble 27%.

The news with respect to house prices is also favourable. The aver­age price of a home in the GTA was $403,972 last month, up two per cent from a year ago when the aver­age price was $395,866.

In the City of Toronto there were 4,362 sales com­pared to 3,481 trans­ac­tions a year ago. The aver­age price mean­while, was $441,703 com­pared to $433,082 last June.

In the 905 Region there were 6,593 trans­ac­tions in con­trast to 5,119 sales a year ago, while the aver­age price was $379,008, up from $370,559 a year ago.

With 18,704 prop­er­ties avail­able for sale, June’s active list­ings were down 30% from a year ago when 26,697 prop­er­ties were on the market.

Com­ment: It is this dearth of list­ings that is dri­ving the upward pres­sure. With­out more choice, peo­ple are not tak­ing their time to look around and are jump­ing on prop­er­ties almost as soon as they come out. And sell­ers know they have a valu­able com­mod­ity, so they are set­ting offer dates and encour­ag­ing bid­ding wars. I checked the stats for last week, in both Midtown/Leaside and in East York. The aver­age sale prices were 105% and 102% respec­tively. And that is for all prop­er­ties sold in those two areas from July 5^th to 10^th.

Lim­ited avail­abil­ity can have a pos­i­tive effect on the mar­ket but it is only one fac­tor in the equa­tion. Most sig­nif­i­cantly, low bor­row­ing rates con­tinue to make home own­er­ship more afford­able. Cur­rently the five-year fixed rate remains at about five per cent.

Com­ment: But mort­gage bro­kers are offer­ing 5-year rates as low as 4.09% and vari­able rates down to 2.5%. And since bond yields ended the week lower, there is a chance that we will see another mort­gage rate drop as early as next week.

As we move into the autumn months, we may see some sea­sonal mod­er­a­tion how­ever; June’s num­bers demon­strate the Toronto real estate mar­ket has weath­ered the global eco­nomic cli­mate with remark­able resiliency.

From a broader per­spec­tive the news is also encour­ag­ing. In Ottawa the province’s sec­ond biggest city, hous­ing sales increased 12.5% in June and the aver­age price grew three per cent com­pared to a year ago.

On the national front, the Cana­dian Real Estate Asso­ci­a­tion reported 49,521 sales in May, within one per cent of last May’s total. The aver­age house price in Canada mean­while, peaked to a monthly record of $319,757 in May.

The Orga­ni­za­tion for Eco­nomic Co-operation and Devel­op­ment, a British based think tank, also expressed cau­tious opti­mism with respect to the world econ­omy recently.

Its lat­est report, which cov­ers more than 80% of the world econ­omy, is the first in two years to see pre­vi­ous pro­jec­tions for eco­nomic growth revised upwards rather than down­wards. After the deep­est decline since WWII, global eco­nomic activ­ity is show­ing signs of sta­bi­liza­tion and in fact, Gross Domes­tic Prod­uct is expected to increase mod­er­ately in all of the G7 nations in 2010.

Com­ment: It makes me won­der… if we did as well as we did over the past year, through the worst of the eco­nomic prob­lems, are things going to get that much bet­ter when the rest of the world recovers?

One key con­cern at home and abroad is employ­ment. Canada’s unem­ploy­ment rate in May was 8.4% – the high­est rate in 11 years, and some fore­casts project it to rise to 9.3% by the end of the year. This is favourable though, com­pared to esti­mates of a 10% global unem­ploy­ment rate at the year’s close.

Given that we’re all inex­tri­ca­bly linked, the most sig­nif­i­cant fac­tor from a global per­spec­tive will be the tim­ing that world lead­ers choose to scale back econ­omy fuelling mea­sures; doing so too soon could cut off growth while leav­ing it too late could cause gov­ern­ment deficits to skyrocket.

From nearly every per­spec­tive, the road ahead won’t be com­pletely free of bumps but it can be stated with rel­a­tive cer­tainty that we can look for­ward to a much brighter pic­ture in real estate and the econ­omy in gen­eral in the months ahead.

Tom Lebour is Pres­i­dent of the Toronto Real Estate Board, a pro­fes­sional asso­ci­a­tion that rep­re­sents 28,000 Toronto Real­tors in the GTA.

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