Good morning everyone;
The real estate market is still humming along in the GTA. Despite lower transactions (due to recent mortgage rule changes) it is still moving forward and will be a stronger market with stronger buyers. The freehold market especially in the 500-800k range will continue to see price growth as currently there is a lack of quality inventory. It looks like it can be setting up for another busy spring market.
GTA REALTORS® RELEASE MONTHLY RESALE HOUSING FIGURES (Full Report)
TORONTO, November 3, 2012 – Greater Toronto Area REALTORS® reported 6,896 transactions through the TorontoMLS system in October 2012 – a decrease of 7.1 per cent compared to October 2011. There were two more business days in October 2012 versus October 2011. On a per business day basis, transactions were down by 15.6 per cent.*
“Sales have decreased in the second half of this year compared to 2011, especially since the onset of stricter mortgage lending guidelines at the beginning of July. The prospect of higher monthly mortgage payments due to the reduced maximum amortization period has prompted some households to delay their home purchase,” said Toronto Real Estate Board (TREB) President Ann Hannah.
The average selling price for October transactions was $503,479 – up 6.2 per cent compared to October 2011. The MLS® Home Price Index composite benchmark price, which allows for an apples-to-apples comparison in terms of home attributes, was up by 5.1 per cent. Average Price in the 416 area code for a detached home is $780,000 / Rest if GTA is $574,000
“We continue to see price increases well above the rate of inflation. Active listings have remained low from a historic perspective, so substantial competition between buyers still exists, especially for low-rise homes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
“It should be noted, however, that the annual rate of price increase has been edging lower over the past few months as the market has gradually become better supplied,” continued Mercer.
*NOTE: The majority of transactions are entered into the TorontoMLS system on business days. There was a mismatch of two business days in September and October of 2012 compared to the same months last year. This is why sales on a per business day basis were noted in releases dealing with these months. The business day anomaly between the two months has now balanced out.
Multiple Offers – Although not occurring nearly as much they are still with us – This week I was involved in yet another bidding war. A very nice home (with good bones) in a great neighbourhood. It was priced a little high and was not actually marketed with an “offer night” presentation. The home had been on market for just a few days and after viewing it my clients’ decided to make an offer. By the end of the same day there were 2 more competing offers! It is still a sellers’ market for quality homes in quality neighbourhoods. That is why the average price of a home is still moving upward despite overall sales transactions being down.
The Condo Market
This week the Mr. Christies’ bakery/plant by the Lakeshore announced that it was shutting down after 60 years of operation. A development concept has already been shown featuring 27 condo towers on the 27 Acre property (Currently being re-zoned to residential).
Pricing in the condo market is not increasing nearly as much (and in some cases decreasing). The mortgage rule changes took many first time buyers out of the market. Many of these first time buyers would have been condo purchasers. Also, consider that there is much more selection and inventory on the condominium side of business. Prices are still stable but buyers should not have to feel rushed or pressured. It was quite different from the spring time earlier this year. Again, the mortgage rule changes took many first time condo buyers out of the market.
The last item, “Monthly Perspectives” is a financial outlook by TD. It talks about the recent US election and possible impacts. Featured are some financial planning “secrets” of Wayne Gretzky
Have a wonderful weekend, Anthony