Tag Archives: bidding wars

What’s driving the demand?

Toronto home prices 2016

Each new year tends to mark a fresh beginning in real estate, but 2016 is clearly something special. Take a look at the chart above, and you’ll see how the gap in year-over-year prices started widening in March and April, 2015. Since then, double-digit increases have been reported in various categories of the market, both in the 416 and 905 areas.

Which kinds are going up the most?

By 2015, price increases outside the City of Toronto started to be steeper than those within the city. And as of the first half of this month, it’s clear that the greatest percentage increases are in the most affordable categories. In the 416, the average townhouse is 22% up over this time last year. In 905, semi-detached homes are up 15%, and detached homes are up 19%. These are all categories where first-time buyers can hope to purchase a home on the ground, in the broad range of $500,000 to $800,000.

Condo apartments are somewhat different. The mix is changing to include more new units, often smaller than the older ones. Even so, lower prices are drawing more buyers to condos in parts of the 905, with the result that average apartment prices are now rising four times faster in the suburbs, compared to the 416.

In this context, the price increases for detached homes would appear to be levelling off. There are parts of the city, however, which are experiencing the most explosive price increases ever in 2016. Inner suburbs like Don Mills, with bungalows built on large lots in the 50s and 60s, are seeing price increases of over 20% this year. Meanwhile, a shortage of resale homes in the core neighbourhoods of the old city has guaranteed bidding wars on just about any listing.

You need a plan

Whether you’re in the market for a house or a condo, you need a smart team to plan and execute a winning strategy. We’re available to talk… If you’re ready to start a conversation you can email us, or ask for James and Joanne at 416-483-8000.

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Where the homes are

GTA Housing Supply 2005-2015

Our real estate board just published a report that outlines a dramatic shift in GTA housing patterns. Here are some of the highlights:

Fewer houses, more condos

Back in October 2005, there were a total of 28,852 low-rise homes available for sale in the GTA. This October, there were just 14,994 low-rise homes for sale. (These figures combine resales on MLS, along with inventory from new-home builders.)

Over the same time period, the total number of condo apartments for sale grew from approximately 16,000 a decade ago, to around 27,000 today. (These figures are approximate because some condos under construction are duplicated in the MLS listings.)

Adding the figures up, there were around 45,000 new and resale homes on the market in 2005, and a similar, probably smaller number this October. Meanwhile, the GTA population has risen, from around 5.5 million in 2005, to around 6.5 million today.

It’s clear that builders have shifted their resources: this October, only 19% of the new-construction inventory was in low-rise homes. Ten years before, new low-rise homes were almost half of the total that builders had available.

Condos are the affordable (but shrinking) option

Another striking detail from the study: the average price of a builder’s new low-rise home in October 2005 was $387,369. The average price of a new-construction high-rise apartment today is $440,382. (The price for a new low-rise is of course much higher, at $802,376.) And just as packages of ice cream, coffee and detergent have gotten smaller, so have condos:  The average new high-rise unit in October 2015 was 767 square feet, compared to 908 square feet in 2005.

Condos appreciate less (usually)

Over the past decade, we’ve observed that prices of resale low-rise homes have risen at about twice the rate of high-rise condo prices. This trend will likely continue (bidding wars, so common for low-rise homes, happen far less often with condos.)

One exception: in the past two years we’ve seen prices in older condo buildings increasing sharply, when nearby new construction has prompted a re-evaluation of the older buildings, which often have good space and amenities. This could become a counter-trend.

There’s lots more…

If you’re in the market for a house or condo, there’s lots you should know. We’re available to talk… If you’re ready to start your home-buying campaign, let’s have a conversation! You can email us, or ask for James and Joanne at 416-483-8000.

Snapshot of the Fall Market

Toronto home sales

Toronto’s fall housing market started right after Labour Day. By early October, the weekly price averages were on a par with those from last May and June.

It looks like a record number of properties are changing hands this year… and yet we still see many areas where there is a “shortage of product.” This housing market is driven by growing demand from buyers.

How much are prices rising, and where?

In September, the number of detached homes sold was virtually unchanged from last year, and sale prices for those rose about 11%. The number of resale condos that sold was up over 5%, and prices for those still went up, more than 5% over last year. Prices for all types of housing rose just as sharply in the 905 areas, as they did in the City of Toronto.

Strategies for buyers

Buyers need to have a game plan. Unless you have an unlimited budget, you’ll need a strategy to get the best possible property that your financing will allow. You need a team on your side, including smart agents who can help you create and carry out your campaign!

That’s where we come in… If you’re ready to start your home-buying campaign, let’s have a conversation! You can email us, or ask for James and Joanne at 416-483-8000.

September takes off

Percent of GTA houses sold over asking.

Two weeks after Labour Day, and the Toronto market has been its typical, irrepressible self! Average prices are up as predicted, and home buyers are out in full force.

The chart tells a simple story. Across the GTA, house buyers are competing for properties. Overall, about half of the houses reported sold in the last seven days went over asking. In the central core neighbourhoods, our sample showed a remarkable 71% of sales where the buyers paid over the asking price.

Bidding wars spread

Toronto’s inner suburbs have been experiencing strong price growth for several years, and increased interest from multiple buyers. And most of the 905 area has felt an increase of “downtown-style” bidding wars this year. Figures from Vaughan and Richmond Hill above show that 48% of houses sold last week went over asking.

Based on comments from many agents, both at Sage and other brokerages, there were anywhere from three to ten bids on a large number of houses this month. Even some condos were receiving multiple offers. Meanwhile, a few listings were ignored by buyers, including well-priced houses where buyers may have simply assumed that the final price would be too high.

The right time to sell
There will continue to be a shortage of listings this fall. Do you know someone who may be ready to sell their home? Do them a favour and put us in touch. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.

GTA Market Update – Sept. 12, 2015

Toronto home prices 2015

Watch the dotted line
No, this is not an optical trick! Each month, as we update this chart, our first instinct is to look at the latest price point (the black line). While this is useful to know, our dotted line (in gray)  actually packs a lot of data…

We call it “projected.” The dotted line is actually made up of two components – the shape, and the placement. The shape comes from a calculation of month-to-month changes in the Toronto market, going back about 20 years. The placement is more art than science: In January, we position our dotted line to represent approximately what an average yearly increase would represent for the coming year. Historically, this works out to around 6% for the GTA.

Seasonal behaviour is real
We like the dotted line because it represents a confirmed behaviour: home prices really do fluctuate during the twelve-month period, in a predictable way. At the same time, each calendar year is a bit different, and the dotted line helps us to spot those trends.

This year’s trend sticks out a mile! In early 2015, the average home price in Toronto and the 905 area shot up by $100,000. In August it was down again, by around $50,000. By October, the dotted line is saying, that number could be up another $30,000. The black line suggests that could be the full $50,000 again. We’ll know soon enough.

The right time to sell
There will be a shortage of listings this fall. Do you know someone who may be ready to sell their home this year? We’d like to hear from you. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.

GTA Market Update – July 8, 2015

Toronto Home prices June 2015

Two things that stand out…
There are two interesting facts buried in the latest Toronto home sale figures: First, the majority of houses in these figures are outside the City of Toronto. Second, the price increases throughout the 905 region are actually steeper than those in the City.

Price increases highest in York Region
Our real estate board’s composite price index for the City of Toronto is up 6.58% (year over year) for June 2015.  Peel Region is up 8.62% and Halton Region is up 8.99%. Higher still, Durham Region is up 12.35%, and York Region is up 12.83%. Even when you isolate the figures for detached houses only, the price increase for the City is still lower than those for the surrounding regions.

Most houses are in the suburbs
About two thirds of the low-rise family homes sold in the GTA this year are in the 905 area. This proportion is reversed for high-rise condos: about two thirds of the apartments sold are in the City of Toronto (but the proportion of condos in the 905 has been increasing.)

Demand is regional
These statistics show that the demand for housing is not limited to the trendy downtown areas; it affects the entire GTA. Reports from cities including Hamilton and Kitchener-Waterloo suggest that increased demand for housing is being felt in those centres also.

Toronto is a global city
Thanks primarily to immigration, Toronto and the GTA are known in every part of the world. Our quality of life is a magnet that will underpin the region’s growth for years to come.

Every home is unique
The value of your home is intensely local. A small semi on a downtown street may well be worth as much as a five-bedroom detached with a pool further out in the GTA. Houses on one block are often worth more than the ones on the next street over, because of real or perceived differences in location or style. Buyers make decisions based on their needs and wishes.

The right time to sell
The numbers point to a continuing sellers’ market. Do you know someone who may be ready to sell their home this year? We’d like to hear from you. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.

The Millennials are here

Toronto home prices 2015

Is this for real?
The chart above shows Toronto home prices shooting up by around $100,000 – over five months. Is this for real? Here are a few points to ponder…
1. The seasonal curve would have us expect a $50,000 price increase from January to May – in a “normal” year.
2. There will be some backsliding in the numbers between now and the end of the year. August and December are typically low points in the curve.
3. The average annual price increase for the Toronto area has been around 7.5% over the past five years. The longer term price increase has been around 6% per annum. This could be a 9% year.
4. The “Toronto” figures you see reported in the media are actually the GTA results. About two-thirds of the houses and one-third of the condo apartments being reported are sales from the “905” area. Prices in 905 are going up just as much as prices downtown.
5. The price increases we’re seeing are not the result of scarcity. Resale listings have actually been increasing; but demand has been going up faster.

The short answer
Yes, this is an unusual year. The usual spring bump has been amplified by currency adjustments and a consolidation of Toronto’s global position. Toronto may not be New York or London, but Toronto is a major city on the world stage.
And yes, the demand for housing is real. The Millennial generation is entering the “household formation” years, and they are an even larger cohort than the Baby Boomers. Their preferences will have – and are already having – a profound influence on the housing market.

The right time to sell
The numbers point to a continuing sellers’ market. Do you know someone who may be ready to sell their home this year? We’d like to hear from you. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.