A recap of the October 2018…
The market report for October doesn’t have much in the way of new news or trends – Toronto’s real estate market is chugging along. But the trends we’ve been seeing since mid-year are starting to deepen, especially the varying performance of micromarkets across the city. One neighbourhood could be facing bidding wars, while a few streets down, properties sit on the market for weeks and sell below asking.
There one’s thing to keep in mind. When you hear news reports about the market being up or down, having a big picture understanding is important, but you also need to dig deeper and understand what’s happening in specific neighbourhoods.
In general, sales are up 6% from October 2017, with the average price of a detached house up $807K from $780K. Of course, that’s still way down from the $918K average in April 2017, when the market peaked, but things are moving steadily. Right now, average days on the market is 24, with core and hot-spot neighbourhoods moving quickly, but the rest of the market is still somewhat sluggish, particularly in Durham and York Regions. In those areas, there’s a larger inventory of homes with more days on the market.
The micromarket trend is particularly evident in the 416
Slow pockets aren’t just in the suburbs. There are some parts of the city that are underperforming, and here’s why: buyers have, for the most part, lost their urgency. They’re no longer worried they’ll be priced out of the market, and are taking their time to make decisions.
You don’t have to go too far to see this play out – King Street downtown is a good example. Take a recent resale condo listing at King and Spadina: it’s a 581 sf one-bedroom with no parking but a great view, listed at $499K. It had 26 offers and sold for $615K. Two blocks down the road, the new King Toronto project by Danish architect Bjarke Ingels is selling like hotcakes at $1500 a square foot – putting a 600 sf condo in the $900K range! But if you go further west towards Dufferin, it’s a different story. Right now there are at least two-bedroom condo towns available for around $730K, and they’re not moving.
All of this shows that buyers aren’t scrambling just to get their hands on a property – they’re being more patient, more specific, and buying what they want, where they want. Sellers can no longer take for granted that they’ll sell right away or get the same price as the place down the street. Buyers are looking at every detail of a property before making a move.
If you’re a seller in this market, have an honest chat with your agent to get a sense of what’s happening in your neighbourhood so you can make an informed decision. If you’re a buyer, you’re entering the market at a good time: there are opportunities out there.
The banks are making it harder to borrow
What the banks do impacts the market as well, whether you’re a buyer or a seller. The Bank of Canada just raised interest rates by 0.25%, and while they’re still historically low, they are climbing. You can probably expect to see a couple more hikes over the next year, influenced by our economy but also by what’s going on south of the border.
In related news, there’s been a further tightening of mortgage guidelines. Last week, TD and RBC announced they will start factoring in unused portions of home equity lines of credit against people’s borrowing power. It’s another hoop to jump through when arranging financing – and it will affect retired people the most, making it more challenging to qualify for mortgages and much harder to move to a new property, even if it smaller and less expensive than their existing one. We’re hoping this is something that will be addressed by financial regulators.
Want to know what GTA neighbourhoods offer the best value? Got questions about market trends and how they might impact your plans? Let’s talk.
