Good morning everyone;
Another high pace setting month for Toronto home sales. On a positive note for buyers, the average detached home sale (for July) dipped to under $1 million. But an overall price increase year over year was experienced.
Market Watch /July – New Record for July Home Sales [Download the report]
August 6, 2015 — Toronto Real Estate Board President Mark McLean announced record home sales for the month of July. Greater Toronto Area REALTORS reported 9,880 sales through TREB’s MLSA System, representing an eight per cent increase compared to July 2014. The number of transactions were up for all major home types, including a double digit year-over-year increase in condominium apartment sales.
“As we move towards a new record for home sales this year, it is important to point out that home ownership demand has been driven not only by low borrowing costs, but also by the fact that the GTA economy has been performing quite well, with the unemployment rate lower compared to last year. Home buyers remain confident in the long-term benefits of owning a home,” said Mr. McLean.
The MLSA Home Price Index (HPI) Composite Benchmark, which accounts for benchmark home prices in communities throughout the TREB market area, was up by 9.4 per cent yearover- year in July 2015. Over the same period, the average selling price was up by a slightly greater amount, growing by 10.6 per cent annually to $609,236.
Detached homes continued to lead the way in terms of price increases, with annual growth in the average selling price outstripping growth in the MLSÂ® HPI detached benchmark. This suggests that there continued to be a greater share of high-end homes sold this year compared to last.
“With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers. Not surprisingly, this supported further price increases well-above the rate of inflation. Assuming similar interest rate and economic environments over the next five months, strong price growth will remain the norm for the rest of 2015,” said Jason Mercer, TREB’s Director of Market Analysis.
Toronto sales set new record except one category by Jordan Maxwell | 06 Aug 2015
Yet another record has been set for home sales in July, an eight per cent increase compared to July 2014 — however the price for a detached home dropped below $1 million for the first time in months.
“…Ownership demand has been driven not only by low borrowing costs, but also by the fact that the GTA economy has been performing quite well, with the unemployment rate lower compared to last year,” Mark McLean, president of the Toronto Real Estate Board, said in a release. “Home buyers remain confident in the long-term benefits of owning a home.”
The comments reflect confidence that the market is nowhere near a slowdown yet and the Toronto Real Estate Board expects that the city is still on pace for a record year.
The average price for a detached home in 416-neighbourhoods fell under $1 million; however the price increased 13.3 per cent year over year. Overall, including the 905, the average price for a detached home in the GTA is $787,607.
At the same time, the condo market has been taking off as TREB reported 2,429 sales, a 14.4 per cent increase year over year. The average price for a condo is $372,263, a 4.1 per cent increase.
For all property types, there were a total of 9,880 sales at an average price of $609,236, compared to 9,152 sales for an average price of $550,625. What’s more, listings were down to 14,699 from 15,081.
“With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers,” McLean said. “Not surprisingly, this supported further price increases well above the rate of inflation.
“Assuming similar interest rate and economic environments over the next five months, strong price growth will remain the norm for the rest of 2015.”
’25 per cent crash’ economist revises forecast – upwards!
HomeMarket Update – by Steve Randall29 Jul 2015
The economist who predicted a yet-to-happen price crash of 25 per cent for Canada’s housing markets back in 2011 now says he expects the correction to be even larger.
David Madani, an economist with Capital Economics, says that low mortgage rates could lead to a correction of 30 per cent in Vancouver and Toronto as the labour market softens and mortgage rates rise due to higher bond yields.
In a client note Tuesday Madani wrote: “Lower mortgage rates have enabled Canada’s key housing markets to defy gravity for the past few years.
“But with prices rising dangerously high relative to household incomes, there is the potential for a large correction down the road.”
He notes that in the short term mortgage rates could be lower but the longer-term outlook is for a reversal in rates, boosting the chance of a housing correction.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage.
The wrecking crew showed up on the morning of July 30th. Within 2 days most of the demolition was done. Now begins the real stress. Everyone that I have talked to that has gone through a similar experience tells me that this scope of project will test many things. Your relationships (friends, family, professional) , your mental and physical strength and of course finances.
Everyone also has told me (and I knew this) that no matter your budget you will surpass it! My wife and I decided to undergoe this project for several reasons
- Our children are young – We wanted to max out the enjoyment of such a major job and expense over the longest stretch before we become “empty nesters”
- Necessity – Our old home although pretty to look at suffered from many issues. Foundations all the way up to the roof. It seemed like we had it nicely staged for the 12 years that we have been there. We love our neighbourhood, neighbours and our property. It felt like home from day 1. So we decided to undergo this construction rather than move.
- Cheap money/interest rates – We are taking on significant (huge actually) debt to complete this and today’s interest rates make it financially feasible for us. This type of debt, to me, is not terrible because we are adding value and worth to our property. So, we should have accomplished much more value than the money spent. We just have to pay for it.
There will be many hick-ups, hurdles and surprises to come I’m sure and I hope that most of the surprises will not be too scary. We target about 1 year before we can move back in.
Cheers and have an awesome weekend/week, Anthony