Tag Archives: buying strategies

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.


New down-payment rules

New downpayment rules

The new down-payment requirements will affect thousands of home buyers in Toronto and the GTA.

The new rules affect all home purchases where the down payment is less than 20%, and the sale price is between $500,000 and $1,000,000. Purchases up to $500,000, or over $1 million, will not be affected. The changes take effect on February 15, 2016.

Specifically, a buyer will need to provide a minimum down payment of 5% on the first $500,000 of value, PLUS a minimum 10% down payment on the remainder of the price, up to $1 million. (Buyers of properties over $1 million are already required to provide a 20% down payment.)

As an example, a house purchase of $700,000 will require a minimum down payment of $45,000 (up from $35,000 currently.)

A big deal for houses (condos not so much)

The new rule will have the strongest impact on buyers of low-rise homes. 53% of all low-rise home sales across the GTA would have been in the affected category in 2015. First-time buyers looking for a house in the City of Toronto know how few actually sell below $500,000. Condo buyers will probably not be affected, since only 13% of condo apartments are selling in the affected price range.

Family help

This holiday season, first-time buyers who’ve been saving up for a 5% down payment may want to have “the talk” with family members… Is it okay to stay off the property ladder until you can save up more, or is there a justified case for a little family gifting, to speed up the process?

Contact us if you’d like to get objective advice from a mortgage professional… we can connect you with some excellent people!

There’s lots more to know…

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 you can email us, or ask for James and Joanne at 416-483-8000.


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.