Corinne McCabe , Broker

Bye, bye March! Welcome sunshine, warm weather, spring flowers and more listings! The March real estate update was released this week and housing sales suggests signs of some stability in Toronto’s market. The market is NOT posting declines in prices and the gains are modest. In fact, the average sale price for the City of Toronto is $830,043, up 1.5% from March of last year. We also saw new listings up 2% to 4,527 year-over-year, but the number of sales were down 9%. Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has receded. This means that in many neighbourhoods we continue to see fierce competition between buyers for available listings and plenty of bidding wars.

The freehold sector witnessed its biggest increase in sold properties last week up 69% across the downtown core. There is still a bit of catching up to do on the listings side with only a 21% increase week-over-week. It is still interesting to note that the number of homes sold at or above the list price has remained consistent at a staggering 65%.

In the market report the average condo came in at $603,969 up 2.3% compared to March of last year. Last week we saw a 12% drop in new listings in the downtown core, but sales saw a significant increase, up nearly 31% over the previous week and of those sold, 45% sold above the list price.

The rental market report was also released this week and the GTA reported 6,646 condo apartment rental transactions in the first quarter of 2019. The average one-bedroom condo apartment saw a 7.4% increase to $2,143 a month and the average two-bedroom saw a 6% increase to $2,811 a month.

Now that March is almost over and we seem to be easing into some warmer weather, it appears that Toronto’s real estate market has a bit more “spring” in its step. The Globe reported this week that Toronto has 104 construction cranes, the most tower cranes of any North American city. The next closest city was Seattle with 59 cranes. A tally of cranes in major cities provides a snapshot of economic sentiment. Based on this consulting firm’s findings, no North American city is healthier than Toronto. Just simply look up!

The freehold sector has witnessed its biggest increase of the year with listings up a whopping 117% throughout all neighbourhoods in Toronto. We aren’t surprised that would happen now that we are all back from spring break. Again, it’s the price range between $700,000 and $1,500,000 that dominates, although last week there were over 80 properties listed above $1.5M. There is still a bit of catching up to do on the sales side, however. Sold properties were down 14% week-over-week, but that should change next week now that we have more listings.

Again, a similar market exists in the resale condominium sector. Listings were up last week by 18% and the biggest jump happened in the central core’s first-time buyer’s price range of condos listed between $400K and $700K. Sales have been trending upwards as well, and we are still reporting close to 52% of condo transactions selling at or above the list price which points to continued strength in the high-rise market.

MARKET UPDATE FOR THE WEEK ENDING MARCH 22ND, 2019

Is buying a home a dream for first time buyers? In the new budget out this week the centrepiece of Ottawa’s housing plan is to help first time buyers with their new zero-interest loans on the following terms:

• CMHC will offer mortgage loans up to 10% of the purchase price of newly built homes and 5% of the value for existing homes. This incentive is in addition to the buyer’s own down payment. Your household income must be $120,000 or less. The overall value of the mortgage and CMHC loan won’t be allowed to exceed four times the household income. With that cap of $480,000 ($120,000 X 4) the highest-value home that could be purchased under the plan would be about $500,000. (Not much help for buyers in Toronto with average prices for homes and condos exceeding that amount.)

• Your household income must be $120,000 or less. 

• The deadline to repay the loan wasn’t specified but it was designed to be a long-term measure. The loans will be available starting in September.

• Also, first time buyers will now be permitted to borrow up to $35,000 from their RRSP’s, up from $25,000, the limit set 10 years ago. 

This program might be good for small cities across Canada, but from a market perspective it will not be a game changer for the housing market in the GTA. The freehold market continues to tighten with a further drop of 34% in available listings since the previous week because of the spring break. Given fewer listings, we weren’t surprised that the number of sales slipped by 24%. There is no surprise that of those properties sold, 45% sold at or above the asking price. The number of new condo listings saw no change from the previous week, but sales were up slightly by 3% and of those sold, 51% sold at or above the asking price. We are gearing up for what we believe to be an active spring market with plenty of qualified buyers waiting to find their dream home.

Without question the weather Toronto has experienced so far this year with unsightly banks of grey hardened snow and ice, has delayed the market action. The number of new listings and sales are slightly down compared to a year ago, but the good news is the average selling price for The City of Toronto is up 4.2% to $840,211 compared to last February which was $806,494. With March break upon us next week listings will be slim. Most sellers who are planning to list their properties have been instructed to wait until after the school breaks. Hopefully by then we can expect some balmy temperatures to arrive which will bring us the usual spring bounce.

As the days are getting longer, we are seeing more freehold listings come to market, up 45% from the prior week. There was a small blip in properties sold, up by 5%, and no surprise that of those properties sold, 66% sold at or above the asking price.

The condo market is not showing any signs of slowing. The condominium sector was instrumental in the price growth we have seen. The average price for a condo in The City of Toronto is up 7.4% to $612,488 compared to last February which was $570,275. New listings last week were up 36% week-over-week and the number of sold condos saw a small 4% increase, and of those condos sold 47% sold at or above the asking price.

The rental market continues to operate in high demand. Low inventory and strong competition between renters resulted in average rents increasing well above the rate of inflation on a year-over-year basis. The average one-bedroom monthly rent was up by 8.1% to $2,145 and the average two-bedroom rent was up by 7.4% to $2,810.

Usually by this this time in February we are normally gearing up for the spring market to start. One problem however...Seller’s didn’t get the memo. Like most of last year we continue to struggle with low inventories, Is it economic uncertainty that is causing this or is affordability the likely culprit within the freehold sector? Despite a continued increase of listings over the last few weeks it is important to note that overall listings for freehold homes is down significantly from last year, despite the influences of a brutal winter of snow storms and freezing rain. This is not the news that buyers want to hear as they are still out there waiting to purchase.

The freehold sector last week saw a 29% drop in new listings but an increase in sales up by 7%. The good news is the number of sales is 20% higher than a year ago and the percentage of sales at or above the list price remains at a notable 54% which indicates that bidding wars are still happening in certain neighbourhoods. We are experiencing very localized market conditions. The number of new condo listings also continued to contract last week while demand and sales were up 7% from the week before. With fewer listings the increased competition resulted in 42% of available condos selling at or above the list price. We are still experiencing the impact of the “stress test” which varies by location, housing type and price.

Real estate disrupters come and go. Many of these new “disrupters”, some coming here from the USA will offer you a quick estimate using an algorithm without doing a market analysis. Are they overlooking the emotional aspect of selling a home and are they just order takers? The market in the last couple of years was booming. You would list a house and it would sell within days. Now in some areas, realtors need to brush up on their negotiating skills and a lot of that comes with experience and training.

Studies were done in the USA and those sellers not using traditional Realtors, sold on average 6-8% lower than an MLS sale for a similar property. American real estate and Canadian real estate are not the same. Through our nationwide listing system Realtor.ca homebuyers and sellers are able to see virtually all listings in the country. Go south of the border and you see only the company’s listings. It is no wonder that third-party, non-Realtor websites dominate America. The road ahead is going to be exciting as we adapt and respond to the changing times!

Freehold listings continued to climb last week by as much as 45% with the central core leading the way and the bulk of the new listings were listed between $1.5M and $3M. The number of sold freehold properties did not see an increase from the previous week, but of the properties sold 58% sold over the asking price. A similar market exists in the resale condo sector.

New listings were up 38% week to week but not much change in the number of condos sold. Sales happening at or above the list price seem to be hovering in the 40-45% range, which we consider to be healthy.

The Toronto Real Estate Board released its market outlook for 2019 this week and the forecast is all good news! It’s predicting the average sale price to be about 4% higher for 2019 and a moderate increase in total sales to come in around 83,000 ends, compared to 77,375 sale ends we had in 2018. It’s also encouraging to see a slight increase in the selling price for The City of Toronto in January, coming in at $777,674 up 1.4% compared to January 2018, and up 1.9% from December. Taking into account the entire GTA region the number of transactions edged upwards and inline with TREB’s forecast for higher sales in 2019.

The resale condominium market continues to lead the way in terms of price growth, up 8.8% on a year-over-year basis with the average sale price at $591,444 for the City of Toronto. The rental market in the GTA is expected to remain tight in 2019 with the supply of rental units still expected to be of concern.

The number of new freehold listings decreased last week but that could be because of the massive snowstorm Toronto had. 20% fewer listings week-over-week created increased competition with 45% of sales selling at or above the asking price. The busiest part of town is still the east end of the city where multiple offers are still the norm. More than 85% of the properties sold over asking.

The condo sector saw a small 6% uptick in new listings last week and no change in the number of sold condos from the previous week. TREB has based its predictions on a lpsos survey and 26% of those looking to buy this year are planning to buy a condo. The proportion of buyers who are planning to buy their first home are still finding it difficult to qualify for loans under the new mortgage stress test.

Toronto is digging itself out of a major snowfall this week and now a polar vortex of extreme cold has moved in. Looks like the spring market will start a little later this year. So far in January the market has been “slow”. In traditional years that was typical for the first month of the year, but we have been spoiled with the last couple of years where house hunters were eagerly pouncing on listings as they appeared in January. FOMO ‘fear of missing out’ has calmed a little. This is not the case for all of Toronto. Certain neighbourhoods are still crazy busy, especially Riverdale/Leslieville where 75% of the properties sold last week in a bidding war.

Freehold listings across the 416 where down 23% last week and this continues to be a source of concern. Sales on the other hand have doubled from the week before. In the central core, there were no new listings below $700k, 29 between $1.5M and $3M, and 28 new listings over $3M. The east core continues to be a hot district where sales are outpacing new listings by a 3 to 1 margin.

The condo market has an equal share of heat this week as well. Sales of existing suites has outpaced listings. It is evident that the contraction of listings (down 32% from the previous week) and a small increase in sales (up 8%) is having an impact on pricing, with over 50% of condos sold last week at or above the list price. The majority of sales that occurred were in the $400K to $700K price range.

We are almost a month into 2019 and it feels like the Toronto real estate market is getting a fresh start. As we enter a more balanced market, the discussion is still about the lack of inventory. We are all watching for signals that buyer sentiment will heat up. In recent months home price growth has faltered, mortgage rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.

The long-term prospects for housing are good because demographics are going to continue to support demand. The largest cohort of millennials will be turning 29 this year entering peak home-buying age and contributing to the increase in first-time home buyer demand. Older millennial move-up buyers will have more options in the mid to upper price point and will make up the majority of millennials who close in 2019. Toronto’s housing market might be in an uneven slump, but experts are saying don’t expect a major decrease in house prices, because the city is seeing accelerated growth in its adult population which will keep the market humming!

The freehold market is starting to build up some steam. We are starting to see an uptick in new listings and a surprising amount listed above $3 million. Buyers are circling and they are willing to move quickly when they see a property that ticks all the right boxes. In the resale condo market, we saw a small 12% increase in new listings from the prior week while sales were up a whopping 68%, and of those sales more than 50% sold at or above the asking price which is a solid indicator that the condo market is trading well.

Ah January. The month of new beginnings as we all wait for the real estate market to take off. Generally speaking January is a slow month for new listings and the weather has been kind to us, but research indicates that listings in the freehold sector have backed off substantially from a year ago while demand has not wavered. The Bank of Canada decision to hold its benchmark interest rate steady, and RBC lowering its mortgage rate 15 basis points yesterday with likely more cuts to come, has given some people hope they'll be able to buy or trade up.

In the freehold market listings continue to be a source of concern. Compared to the same time last year the east end of the city (E01-E03) is way down in listings. But we are seeing multiple offers starting up again. A listing in the east end listed for $649K attracted 14 offers and sold for $853K. Are potential sellers reluctant to list their properties for sale in this uncertain market? The buyers are out there waiting.

The resale condo market on the other hand has started off with a boost in new listings, almost 50% more than a year ago. The sales are virtually the same but 2019 is starting off strong with 58% of the condos sold in the downtown core selling at or above the list price. As many as 25,000 finished condo units will be delivered this year. That's a big supply jolt for a market that has delivered fewer than 15,000 finished units over the past two years.

Bosley Real Estate Ltd. is a full service boutique brokerage operating in Toronto, Niagara-on-the-Lake, Port Hope and Cambridge Ontario since 1928. We have four centrally located offices and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.

As with each passing year, 2018 was filled with its fair share of ups and downs. As we move forward into 2019, what will be in store for the real estate market in the GTA? Will there be calm and chaos? The big question now is how much will interest rates rise and will there be a correction in 2019?

This year the Toronto real estate market was heavily influenced by the mortgage stress test and rising interest rates. Affordability has also become an issue for first time buyers, with the average sale price for the City of Toronto coming in at $842,483 at the end of November. Renters are also struggling for accommodation. The average one-bedroom condo rose 9.5% to $2,163 and with rent controls and builder discouragement, new construction will dry up leading to higher rents and lower vacancy rates.

Low housing supply will continue to be an issue in the new year. At the end of November, TREB posted 73,677 sales year-to-date, and with one month to go we will be lucky if we hit 78,000! The last time we saw levels in this range was 2003 and 2008. Whether the banks raise interest rates in the new year, the uncertainty appears to be making consumers hesitant. Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for a much healthier and sustainable growth in the future. Predictions are the housing market will maintain the status quo or could experience a slight growth in prices and sales in 2019. A return to a more balanced market that sees properties listed for a duration of time, we might need to go back to a more conventional way of approaching a deal and using the concept of negotiating.

People will continue to move for the usual reasons — whether they are downsizing, retiring, leaving town, and if incomes, jobs and population growth evolve stably, the housing markets are expected to respond accordingly. The spirit of optimism in Toronto will conquer all. Happy New Year!

Bosley Real Estate Ltd. is a full service boutique brokerage operating in Toronto, Niagara-on-the-Lake, Port Hope and Cambridge Ontario since 1928. We have four centrally located offices and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.