Tag Archives: sales of existing homes
Real estate prices up all over Toronto
If you had purchased a Toronto area home at the beginning of the year, what neighbourhood would have given you the best return on your investment? While prices for detached houses rose on average 5% in the first half of the year, some neighbourhoods have seen a much more significant appreciation. In contrast to the trend of higher returns in downtown Toronto, the best returns this year are in neighbourhoods outside the core.
“Downtown isn’t the centre of the universe any longer,” said Christine Martysiewicz. “Prices are such that people are now looking at points east, west and north to get more home and lot size for the dollar.”
Last year about half of detached homes reporting double-digit price increases were in downtown Toronto. This year increases are more evenly spread across the 63 districts surveyed.
One big reason is that the average price for a detached home downtown has hit a daunting $830,000.
Homeowners are now looking at areas such as the Scarborough Bluffs. The Bluffs is the top-performing area for the first half of the year, with prices for a detached home climbing 21.2% to $360,175. In second place was the nearby Beaches with values up 19.6% to $622,042.
The survey comes on the heels of a report yesterday by the Canadian Real Estate Association that shows the first half of the year with a record amount of activity in sales of existing homes.
A new annual record is expected to be set this year with 186,177 units sold in the first six months, up 3.6% from 2005, already a record year. With higher interest rates putting a crimp on affordability, the association expects sales to be about 1% more than 2005 by year end.
Toronto, which has a more mature housing market, saw activity increase by a more moderate 2.5% during the first half. More listings in the Toronto real estate market should give some relief to buyers who can expect a more temperate market with more modest price increases.
That’s certainly the case in Toronto, where the Swansea, South Parkdale and Roncesvalles communities saw prices appreciate by 19.25% to $640,132. The Bayview Village area, with large lot sizes and available bungalows, saw a jump of 17.7% to $602,211. The Lawrence Park area, popular with the financial community who want a family-friendly neighbourhood close to Bay St., saw a jump of 17.6% to a prohibitive $1,132,410 for the average detached home.With detached homes becoming less affordable, buyers have increasingly turned to Toronto condos in order to get a foothold in choice locations.
The top return for the first half of the year for condominiums is in the Yorkville-Annex area where condos have climbed 16%. The average price in this area is now a substantial $516,729 – the highest average price for a condo in the city.
In second place is the more affordably priced west end of Humber Summit, which saw prices increase by 14% to $173,238. Lawrence Park again made the top five with a 10.6% increase to $327,525.
———————————————————————————
Contact the Jeffrey Team for more information
Incoming search terms
Related posts:
- Some pockets still warm as real estate market cools Prices jump in Trinity Bellwoods, Leslieville and Old Mill, fall...
- New hunting grounds eyed as Toronto real estate market tightens Potential homeowners are searching harder to find overlooked areas that...
- Toronto Real Estate Forecast 2010 MLS® sales in the GTA will hit a record high...
- First-time buyers boost house and condo sales despite erosion of affordability Heated Spring real estate market forecast from coast-to-coast March 20/2007...
- Toronto real estate resilient in first half of 2009 In the midst of the recession, approximately 20% of single-detached...
Is There Toronto Condo Market Bubble?
Excerpt from an article by Tony Wong – Toronto
A correction in the red-hot Toronto condominium market “cannot be far away,” says a leading housing economist.
Buying for investment purposes in the Toronto condo market has been “far in excess of market needs” and buyers face “very high risks,” said economist Will Dunning in his most strongly worded analysis yet of the Toronto market, released yesterday.
Nearly a decade into a robust housing cycle, high-rise condo sales remain extremely strong, with second quarter sales at an annual rate of 20,800, a record high, said Dunning.
While other housing economists have expressed concern over what they see as a potentially frothy Toronto condo market, Dunning, a former Canada Mortgage and Housing Corp. economist, has been among the most conservative.
Price appreciation for condos continues at a good clip – 5.9% year over year – and the average condo rent has increased 2.1%.
“An onslaught of Toronto condo completions is just beginning and I expect that rents will start to fall late in the year with the possibility of price weakness to follow,” said Dunning.
Toronto condo buyers have lucked out so far only because the construction industry is at capacity, said the economist.
Some analysts have said the market is sustainable because prices haven’t gone up as far or as fast as in the 1980s, just before the market crashed.
They also say banks are much more stringent and developers have to sell most of their units before construction. Also, high house prices mean Toronto condos are now the only choice for some buyers.
He forecasts 15,910 condo starts this year, with another 16,623 for 2007 and more than 10,000 in subsequent years, meaning buyers will have a lot more Toronto condos to choose from.
He has revised his home price forecast upward for 2006, and expects the average home to increase by 5.7% this year (compared with a previous forecast of 4.3%) to $355,305. He expects resale prices to move 3.4% higher in 2007 and then level off at about the inflation rate in 2008 and 2009.
With the deterioration of affordability due to higher house prices and rising interest rates, Dunning estimates that sales of existing homes (both condos and low rise) should be 10% lower than current levels.
————————————————————————————————–———-
Contact the Jeffrey Team for more information – 416-388-1960
Incoming search terms
Related posts:
- Dissecting the Condo Bubble Instead of running out and selling your condo before it's...
- Canada’s Condo Market Remains an Opportunity For First-Time Homebuyers Condominium markets in Canada will continue to offer solid opportunities...
- Young buyers drive Toronto condo boom The Toronto condo building boom that began several years ago...
- Toronto condos set to evolve Toronto condo market is secure Derek Raymaker – Globe and Mail...
- Toronto condos tighten their grip By Derek Raymaker – Globe and Mail High-rise condominiums not only...
Toronto and Canada Housing Forecasts Getting Rosier
Each month, our local home builders’ association receives several market intelligence reports from the Canadian Home Builders’ Association. This month’s newsletter contained a number of items that I thought would be of interest to new-home buyers in the GTA.
Economic Update
Dr. Peter Andersen, CHBA’s consulting economist, notes that this year will be much busier than expected for construction activity of all types. Housing starts have surged and residential construction has picked-up again. Non-residential construction, always a second-half cyclical performer, is in a solid expansion. A strong office leasing market and a declining office vacancy rate are signaling the onset of an office tower construction cycle.
Housing starts averaged 248,000 at annual rates in the first quarter – an increase of 17% from the same period a year earlier. This is far above the 2005 housing starts total of 225,481 units and also the annual cyclical peak of 233,431 units set in 2004.
The March starts figures were striking – 252,300 at seasonally adjusted annual rates. The first-quarter surge reflected both single-detached and multiple-unit starts. Housing start forecasts for 2006 are being revised upwards as a result of the monthly performance through the first three months of the year.
The resale market is always a good indicator for new-home demand. It is still hot and shows no sign yet of affordability stress. First-quarter sales were at an all-time record high, after adjusting for seasonality. Sales of existing homes and condos in March continued at close to record levels. This is also good news for renovation demand as the stimulus to renovation from resale housing activity, which works with a lag, shows no sign of slowing down. The national average resale price in March in major markets was up by 11.5% year over year.
RBC affordability index
High home prices and utility costs in the last three months of 2005 pushed home affordability to its highest level in 10 years, according to the Royal Bank of Canada.
RBC’s affordability index measures the proportion of pre-tax household income it takes to service the costs of owning a home. Despite the fact that incomes continue to rise, this increase does not match the hikes in mortgage rates, house prices and utility costs.
Income growth in Canada is starting to accelerate, wages are rising, but the increase in house prices has been faster. Add to it higher interest rates and overall size of rising mortgages, so affordability is going down.
Vancouver and Calgary were hit the hardest as housing prices soared in the last quarter of 2005. Affordability is expected to get worse in the first half of this year, but should level off by year’s end.
Labour shortage
The construction industry is concerned after hundreds of construction workers from Portugal and other countries have been deported as the new Conservative government moved away from Liberal government promises of an amnesty plan.
Promises of an amnesty gave hope to underground workers who came forward to file refugee claims as a result. Their attempts to stay in the country legally ended up getting many of them deported. Canada’s current immigration system is tailored to educated immigrants, and blue-collar workers often do not qualify.
“This is insanity,” says immigration lawyer Lorne Waldman. “We have an immigration system that is supposed to supply workers for jobs, but these blue-collar workers who are needed cannot qualify to get in.”
There is a major labour shortage in the construction industry – an industry that accounts for 9.5% of Canada’s total gross domestic product and 7.5% of Ontario’s alone. It is estimated that there are between 10,000 and 15,000 illegal immigrants working in southern Ontario’s construction and hospitality industries, and 200,000 undocumented workers across the country. Deportations are therefore a major threat to the construction industry.
The Canadian Home Builders’ Association wrote a letter to Immigration Minister Monte Solberg, supporting the work foreign workers do in the homebuilding industry and urging him to resolve the labour shortage.
Solberg says the government is working with the provinces to ensure labour needs are met. “We understand the process doesn’t work well for a lot of people. We’re trying to fix that. The ideal situation is for people to go through the process.” He ruled out an amnesty, he said, because he doesn’t want to encourage people to come to Canada illegally.
————————————————————————————————–———-
Contact the Jeffrey Team for more information – 416-388-1960
Incoming search terms
Related posts:
- Canadian housing market not in recovery yet The Canadian market is not at risk of collapsing, as...
- Housing toughest sector on the block Sales of existing homes in June were up a seasonally...
- Canada’s housing market to spring forward in the early part of 2007 before falling back Solid early-year housing starts, home resales and price appreciation Western...
- Easy credit, soaring prices raise new housing fears Canadians are in the midst of a mortgage binge,...
- Toronto Real Estate Forecast 2010 MLS® sales in the GTA will hit a record high...
