According to the Toronto Real Estate Board Market Watch for November, things are looking up across the board. Detached and semi-detached sales are making a steady comeback, and condo sales are way up.
Last month’s average house price in the 416 was $1.27M, down 5% from this time last year. Semis are down 0.7%, with an average price of $904,000. And that’s partially a comeback from the downturn we saw early this summer, and partially because detached and semi-detached houses have stopped being affordable for a growing chunk of the population. The overall number of homes sold is down from last year because there are fewer listings, due mostly to people waiting and seeing how things will shake out with the market.
But keep in mind that November 2016 was the most active November in Toronto’s history – so a 5% decrease is still well above historic norms. Month-to-month sales activity is up, and we’re heading towards a return to “normal” – which in Toronto, is definitely a seller’s market. We’re still seeing multiple offers, especially on semis priced under a million. People are being a little more conservative these days, but the desire to live in the core is still strong.
Condos and towns are a different story.
The price gap between condos and detached homes is shrinking as more and more people come to terms with the fact that they’re priced out of the detached and semi market. Tightening mortgage regulations are also a factor in the shift.
Last month, the average price for a condo in the 416 was $555,000 – a 17% jump over last year. Condos prices in the $400,000 – 500,000 range are in the greatest demand. They’re getting multiple offers with no conditions and consistently selling over asking. The core is a hot ticket, but anything on a subway line – like the buildings near Kipling subway station – is garnering at least two to three offers, going as high as 10-15 for really unique or attractive listings.
Townhomes are doing almost as well, with a 12% increase year over year and a record average price of $760,000.
December forecast
The upcoming weeks may see more activity than usual for this time of year, as people try to purchase before the new mortgage regulations come in. I expect the number of listings will continue to shrink, too, since potential sellers are busy with holidays. Buyers still want to purchase, driving demand, depleting stock and potentially increasing prices.
The impact of new regulations for Airbnb
The strong condo market may change with the new rules the city has put in place around Airbnb. To be able to rent out a space, it must be your primary residence. These regulations have been created to open up Toronto’s rental pool, which has shrunk with more units available exclusively for pricey short-term rentals, and to prevent “ghost hotels.”
As a result, investors may step back. Renting units via Airbnb is a lot more lucrative than renting them to full-time tenants at regular market rates, and may end up being a much less appealing scenario. So we may see more supply coming up for sale and available in the rental market in the near future.
Want to know more about buying and selling in the 416 and beyond? Just ask – we’re happy to answer all your questions.
