A recap of March 2019
Spring has (finally!) sprung, and the market is definitely showing healthy signs of growth. It’s been balanced and steady, and what we saw in the last month or so is in line with the kind of growth we’ve seen in March and April in past years. There’s pickup in terms of average price, active listings and number of sales, so the season is off to a great start.
The average price of home in Toronto was $788K in March – in January, it was $748K. Sales are way up, with March sales at 7,178 compared to 4,009 in January. Average days on the market are down from 33 in January to 21 in March – that’s to be expected for this time of year, since spring is traditionally when the most sales happen.
A busy market is great for both buyers and sellers
With all that inventory on the market, there’s better selection than any other time of year. For sellers, there’s a larger pool of buyers looking at homes, so sales tend to be faster and prices higher.
It’s great that we aren’t seeing the irrational price growth of a couple of years ago. Steady is good: Toronto remains the strongest market in Canada in terms of months of inventory (active listings divided by number of sales per month…the lower the number, the stronger the market). Toronto is currently sitting at 2.2 months, with Vancouver at 7.4, Montreal at 5.1 and Calgary at 5.0.
A lot of the price growth is coming via condos
The stress testing legislation has impacted people’s ability to purchase at higher price points, so condos in the 416 continue to be in hot demand, with prices climbing for 17 consecutive months. Last week, we sold a a one-bedroom with no parking at King and Spadina – it was listed at $499K and went for $640K!
Sales are definitely up in the lower range – one of the reasons is that mortgage rates have unexpectedly come down. And condo popularity won’t be slowing down any time soon: there are 80 new residential and mixed-use skyscrapers in the works.
Being realistic about price
However, while bidding wars are happening frequently for properties under $1M, sellers at the higher end of the market aren’t seeing the same kind of action. We counsel our clients to be realistic about setting price – and definitely don’t look at 2017 as a benchmark for pricing. 2016 is a much better measure.
Government affordability solutions won’t help Toronto buyers
Our federal and provincial governments are trying to come up with ways to help with the housing shortage. However, nothing we’ve seen so far will help Toronto buyers. The federal budget increases the amount first-time buyers can take out of their RRSPs from $25K to $35K. At Toronto prices, that’s a drop in the bucket. Plus, since first-time buyers tend to be on the younger side, many won’t have that much in the RRSPs anyway.
Another change is that people with an income under $120K will be able to borrow up to 5% of their purchase price from the CMHC. The way the math works, however, you can only qualify if you’re buying a property under $480K, which is great for rural communities, but takes Toronto buyers out of the running.
The provincial government released their budget last week, and while it mentions a housing supply action plan, there are no specifics. And there’s also no mention of trade offs – will development be cutting into green belts? Will certain homebuilders benefit from incentives? It allso touches on transit-oriented development, Tarion reform and property tax reform, but again, there are no specifics. So it’s a “wait and see” scenario.
Got questions about neighbourhoods, market trends, investment options or anything else real estate related? Let’s talk.
