Housing market trend-line bodes well
Stephen Dupuis – Yourhome.ca
I knew we were having a pretty good year as far as total new home sales go but I was amazed when it was pointed out to me that we’re actually well on the way to the second best year ever. We’re going to get there in quite a different way than we did in 2002 when the all-time record was set, but hold that thought.
A few weeks ago, I got my monthly e-mail from Steven Hurst, the VP of Analytics for RealNet Canada Inc., containing the sales statistics for June and the totals for the first half of the year. In that e-mail, Hurst drew my attention to a number of highlights in the data, including the record-setting pace of sales so far this year.
Let’s look at the month of June first, starting with high-rise sales which were up a whopping 62% compared with June, 2010. As Hurst pointed out, it was the second best June ever and the fourth best month of all for high-rise sales. Add in a 40% spike in sales of low-rise homes in the suburbs and total new home sales for June were up 53%, year/year.
On a year-to-date basis, the low-rise market is flat-line with 2010 while the high-rise market is running 39% ahead of 2010. This is where Hurst noted that the past three months amounted to the second best second quarter (April-June) and the best ever first half (January-June) for high-rise sales.
As Hurst further revealed, the nearly 24,000 new homes and condos sold so far this year represents a record in the making.
The all-time record for new home sales was set in 2002 when a mind-boggling 55,000 new homes and condos were sold, well above the average annual demand since 2000 of around 40,000 units. We’re on pace to hit 48,000 units this year, but we’re going to get there in a dramatically different way than we did back in 2002.
Back then, exactly two-thirds of all new home sales were of the low-rise variety, basically single-detached, semi-detached and town-homes in the 905 Regions while just one-third of the market was high-rise condominium suites, largely in the City of Toronto.
This year, the market mix will be almost the reverse of 2002, with high-rise condominium suites commanding the overwhelming share of the market. So far this year, high-rise home sales have accounted for 61% of the market, peaking at 65% in June.
As for prices, the RealNet low-rise price index currently sits at $549,371, up 12.6% or $61,531 since last June, while the high-rise price index sits at $461,692, up 8.3% or $35,440 year/year.
What is driving the market and will it continue? Thankfully, we have a solid Canadian economy with the unemployment rate at its lowest since January, 2009. Low interest rates have obviously been a helpful factor, particularly for first-time buyers, and of course net migration of people to the GTA has been fuelling local market demand.
Can sales continue at the current pace? I know for sure that there’s a slew of new condo projects that have either just come to the market or will be coming very soon. New openings tend to drive sales so I expect my next few monthly e-mails from Mr. Hurst to contain some very healthy numbers. As for the Fall, time will tell, but the trend-line bodes well.
Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.