Tuesday, May 31, 2016

$3 million benchmark price for a single family home in Toronto in 10 years if trends remain

As one of Canada’s best performing real estate market for several years now, Toronto has seen home prices grow to new levels.

As one of Canada’s best performing real estate market for several years now, Toronto has seen home prices grow to new levels.

Within a decade, however, these concerns might prove moot as benchmark costs could go as high as $3 million for each single-family home if present trends do not change, according to an analysis by Daniel Tencer and Jesse Ferreras of HuffPost Canada.

Taking current price growth rates into account, the duo’s predictions noted that the baseline price of a house in Toronto would be sitting between $2.26 million and $3.582 million by 2026.

Even going from a condo to a single-family home would become nigh-unaffordable for a significant proportion of would-be buyers within a decade.

"In Toronto today, upgrading from an average condo to an average house costs $758,000. By 2026, it will cost between $1.68 million and $2.95 million. Good luck."

The HuffPost analysts said that while continuous growth in the next ten years is unlikely, "The point of this is not to scare you into rushing out and getting a huge mortgage before prices get any worse, it's to illustrate that what's going on in Toronto and Vancouver today can't go on."

Monday, May 16, 2016

New detached homes in GTA break $1 million milestone

The average price of a newly-built single-family detached home in the Greater Toronto Area has exceeded $1 million for the first time. Figures from the Building Industry and Land Development Association reveal that the milestone was reached as of the end of March with prices up from $861,848 a year earlier.

The 21 per cent year-over-year surge has been driven by strong demand in the GTA which has not been met by supply. This, BILD CEO Bryan Tuckey says, is due to government intensification policies and a lack of suitable land.

"The demand for detached homes is far outpacing supply as the GTA's population continues to grow," said Tuckey. "Our region has record-low levels of new detached homes available for sale, which drives up prices and reduces housing choice for consumers."

In March, 905 new detached homes sold and inventory was at just 1,634. The building industry is meeting provincial requirements for townhouses and condos but Tuckey says there is strong demand for detached homes.

"New low-rise homes are being purchased faster than they can be brought to market," Tuckey said. "As long as demand for low-rise homes continues to outpace supply, we will continue to see rapid price growth."

Prices for all low-rise homes, including townhouses, semi-detached and detached, also set a new record in March - $849,312. High-rise homes averaged $459,231.

Thursday, May 12, 2016

Toronto heading for another record year in existing home sales

It’s early in 2016, but Canada’s largest city looks like it’s on pace to break another record in home sales.

The Toronto Real Estate Board Toronto Real reported there were 10,326 sales in March and 22,575 sales in the first quarter. March sales were up 16.2 per cent from a year ago while the first quarter activity grew 15.8 per cent from a year earlier with double-digit year-over-year rates of sales growth across all major home types.

“At the beginning of 2016, TREB’s outlook for the year pointed to a strong possibility of a second consecutive record year for home sales. This outlook was based, in part, on upbeat consumer survey results pointing to robust home buying intentions. It is clear that these upbeat intentions have translated into record first quarter results,” said Mark Mr. McLean, president of the board, in a statement.

Prices also continue to rise rapidly with the average detached home in the city of Toronto up 12.4 per from a year earlier, reaching $1.174 million. Across the Greater Toronto Area, the average detached home is now selling for $910,375.

The average selling price for all home types combined was up 12.1 per cent in March from a year earlier and 13.6 per cent in the first quarter in the same period.

“Demand was clearly not an issue in the first three months of 2016, regardless of the housing market segment being considered,” said Jason Mercer, director of market analysis for TREB, in a statement. “The supply of listings, however, continued to aggravate many would-be home buyers. We could have experienced even stronger sales growth were it not for the constrained supply of listings, especially in the low-rise market segments. The resulting strong competition between buyers has underpinned the double-digit rates of price growth experienced so far this year.”

Wednesday, May 4, 2016

GTA will lead luxury sales market

Toronto and Vancouver will continue to lead luxury home sales in Canada this spring in both volume and price, and mostly for the same reasons they dominated last year, says a new report released earlier this month.

Sotheby's International Realty Canada cites macro-economic trends including limited inventory and strong demand from both domestic and international buyers in making its prediction.

The realtor says the Greater Toronto Area will lead the $1-million-plus residential real estate market, with continued sales gains and price escalation.

Notable growth is also expected in Vancouver, especially its top-tier residential market, with increases anticipated in the $4-million-plus category.

"Luxury home sales in Toronto and Vancouver will continue to defy gravity this spring," Brad Henderson, president and CEO of Sotheby's International Realty Canada, said in a statement.

"Both markets have the potential for significant gains and we expect heightened demand and insufficient inventory to drive price escalation and sellers' market conditions."

The report said steady economic growth indicators in Quebec have contributed to market balance in Montreal, where sales of top-tier detached single-family homes, attached homes and condominiums are expected to remain comparable to 2015 levels.

But continued economic uncertainty in Calgary due to troubles in the oilpatch will increase the number of homes available and contribute to declining prices in both the top-tier and conventional markets in Alberta's largest city, it said.

The weak Canadian dollar has made real estate more attractive to domestic and foreign buyers. But Sotheby's says other market fundamentals have had and will continue to have greater impact on the $1 million-plus real estate market across Canada this spring.

In Vancouver, the first two months of the year saw sales of homes valued at more than $1 million increase 23 per cent year-over-year to 771 units, of which 557 were single-family home sales - a 16 per cent increase.

While the GTA remains attractive for foreign investors and immigrants, local and domestic demand will remain the primary drivers in that market, according to Sotheby's.

Already the Toronto market has seen a 63 per cent, year-over-year increase in sales of $1-million-plus homes - up to 1,646 units, of which 1,486 were single-family homes.

By comparison, the sale of homes priced $1 million or more rose 23 per cent to just 80 units in Montreal in the first two months of the year. That's the same number as in Calgary, where the figure represented a one per cent decrease from the same period in 2015.

Just Listed