Tag Archives: resale home
Toronto home prices gain 7% in 2012 even as sales slip
Condo prices decline, sales down sharply in all segments
CBC News
Toronto home prices continued their steady march higher last year, with the average price of a resale home coming in at $497,298 in 2012, an almost 7% increase over the previous year.
The Toronto Real Estate Board said Friday that 85,731 Toronto-area homes changed hands last year. That’s a 4% decline from 89,096 in 2011.
“The number of transactions in 2012 was quite strong from a historic perspective,” board president Ann Hannah said. “We saw strong year-over-year growth in sales in the first half of the year, but this growth was more than offset by sales declines in the second half.”
In July, Ottawa implemented another crackdown on the mortgage industry that made it harder to get Canada Mortgage and Housing Corporation (CMHC) insurance, limiting mortgages to 25 years.
That put a damper on activity in Canada’s largest housing market, the data showed.
Comment: Lower sales volume in every month since the new rules sure proves that.
Sales were down in all segments of the market, from detached and semi-detached homes, to townhouses and condos. But with the exception of condos – the average price of a condo in the Greater Toronto Area dipped almost 1% to $325,726 – prices were higher on average in 2012 than they were in 2011.
The value of condos in the downtown “416″ area slipped by a bit more, down 1.8%, to $342,847.
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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.
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New mortgage rules have affected home sales
Ann Hannah – Toronto Star
A moderate number of resale home transactions took place throughout the GTA in November, with 5,793 homes changing hands. This represented a 16% decrease from 6,908 sales in November 2011.
In Toronto, 2,308 transactions took place last month compared to 2,952 sales a year ago, a decline of nearly 28%. Meanwhile, 3,485 homes changed hands in the 905 regions, a decrease of more than 13% from 3,956 sales in November 2011.
A key factor that has influenced the dip in sales is because of the changes in mortgage lending guidelines that came into effect in July. The changes reduced the maximum amortization period from 30 years to 25 years and set a purchase price ceiling for government-backed insured mortgages at $1 million. These regulations have resulted in some households putting their decision to purchase on hold while they save up more money for a down payment and/or experience an increase in their income.
Adding to this situation in the City of Toronto is the additional Land Transfer Tax, which takes money from homebuyers that could otherwise be used to offset the high costs of home ownership.
While sales decreased year-over-year in November, a modest overall price increase was reported with the average price of a GTA home reaching $485,328. This represented an increase of 1.6% compared to a year ago.
The 905 regions, with an average price of $463,779, showed a price increase of 4% compared to a 0.5% decrease in the City of Toronto average home price, which was $517,866.
The pace of average price growth in November was slower than what was experienced for much of 2012, especially in the lowrise segment of the market. This was largely due to the fact that the mix of single-detached homes sold in Toronto in November changed relative to last year. Specifically, the share of homes that sold for over $1 million was down considerably.
While the mix of home types sold may have changed, market conditions remained tight for lowrise home types. This is evident when we consider the GTA’s MLS Home Price Index (HPI), which tracks the price change for benchmark homes – in other words, a home with the same attributes over time. When we look at price through this lens, we find that the benchmark price for major home types was up by 4.6% in the GTA as a whole and 3.9% in Toronto.
News on the employment front was positive in November, as the Toronto seasonally adjusted unemployment rate decreased to 8.2% from 8.6% the previous month. Interest rates remain largely unchanged, with a five-year fixed-rate mortgage of just over 3%.
At this time of year I am often asked whether it is prudent to list one’s home for sale and there are, in fact, many benefits to doing so. Consider that those viewing homes at this time of year are more likely to be serious buyers. As well, homes often look their best when they are decorated for the holidays and a favourable emotional response to a property often prompts an offer.
I encourage you to talk to a Greater Toronto realtor about the many other factors you should consider before choosing to make your next move.
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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.
—————————————————————————————————–
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Vancouver real estate cools — could Toronto be next?
CBC News
Prices continue to rise in Canada’s two largest real estate markets, but a closer look at the numbers shows two housing markets headed in different directions.
Both cities have been singled out by the Canadian Real Estate Association for either skewing the national numbers higher and lower in recent months. And both cities remain among the hottest real estate markets in the country.
And the similarities don’t end there.
Resale prices move higher
On the surface, new data from real estate boards in the two markets shows prices for resale homes are indeed still rising. In Toronto, the average price of a resale home was $517,556 in April — an 8.5% increase from the same month a year earlier.
The average price in Vancouver, meanwhile, was $683,800 in April, up 3.7% compared to a year ago.
Rising prices are broadly perceived to be the surest sign of a buoyant housing market, but the number of homes sold — and the number of homes listed for sale — tell a different story.
In Vancouver, there were 2,799 sales on the Multiple Listings Service last month. That’s a 13.2% decline from the 3,225 homes sold the same month a year earlier. Indeed, the number of homes sold in April in Vancouver is the lowest total for that month since 2001, the Real Estate Board of Greater Vancouver (REBGV) noted in a release this week.
“Although April sales were below what’s typical for the month, we continue to see… a balanced relationship between buyer demand and seller supply in our marketplace,” REBGV president Eugen Klein said.
Others are not so sure. Real estate analyst Ben Rabidoux with M Partners says the drop-off in sales even as more homes come on the market is a trend worth noting. New Vancouver listings totaled 6,056 in April, more than double the number of homes sold and a 3.6% increase on the level a year earlier.
The new listings figure is 6.7% above the 10-year average for the month.
Comment: So Vancouver has the opposite problem as Toronto. Listings are up – increasing supply – while sales and prices slow down. In Toronto, we have low levels of listings, pushing sales and prices up.
“This is something I’ve been watching for a while,” Rabidoux said. “Inventory is ratcheting up even as sales are falling.”
An increase in listings can sometimes be a sign of a market top, as people are eager to sell to lock in gains they’ve earned in a widely acknowledged strong housing market.
If the level of willing buyers for all those new listings can’t keep up, it can create a buyer’s market with more sellers than buyers. Prices are still in positive territory but that’s unlikely to continue if such a large gap between buyers and sellers persists.
Contrast that with Toronto, where the number of sales continues to increase at a rapid pace — up 18% to 10,350 in April. Yet the number of listings was up by almost as much, nearly 15% to 16,436.
Comment: But that is only one month, taken out of context. Month after month, year after year, listings have lagged behind sales. That is why there are 10 buyers for every listing. If sales were up 5%, listings were up 4% – or even down. That gap has been growing for a LONG time.
An increase in listings is a relatively new trend in Toronto, and it mirrors what happened in Vancouver about a year ago, Rabidoux notes. “It hasn’t been substantial enough to make a dent yet, but it’s noteworthy because that’s what happened in Vancouver,” he said. “Listings took off before sales died.”
Comment: One month, people, one month.
To be sure, a change in the market’s overall direction isn’t showing up yet in prices. The numbers suggest there’s still ample demand for housing in Canada’s largest city.
“Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions,” Toronto Real Estate Board president Richard Silver said. Prices for detached homes in the GTA were up 9% in the month, TREB noted in a release this week.
If there’s any weakness in the Toronto market, it’s likely in the condo sector, Rabidoux said. The average price of a condo across the 416 and 905 area codes was $339,978 in April, up 4%.
Comment: Yes, because supply is not limited in condos. There are more for sale, so less pressure on prices. Never mind all of the new developments.
Finance Minister Jim Flaherty noted the city’s condo market was one of the government’s primary concerns in wanting to rein in control of Canada’s national housing agency last week.
Comment: And yet it is slowing down, of its own volition. He needs to be worried about the houses in trendy areas!
On a square-foot basis, new condo prices actually declined in Toronto in the first quarter of 2012. That’s the first time that’s happened since 2009, Rabidoux said.
“Condos are usually the canary in the coal mine,” he said. “The whole Toronto story feels like it’s been recycled from Vancouver 18 months ago.”
Comment: Except for the prices – which are more than 32% lower in Toronto than Vancouver. We have a LONG way to go to get to their lofty levels.
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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.
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