Each week, The Glenn Team provide highlights from the weekly CP office meeting to provide a balanced overview of the Toronto and GTA markets and relevant issues affecting real estate markets. Meetings are overseen by Chestnut Park's CEO and Broker of Record, Chris Kapches, LLB, who provides weekly analysis and commentary. Additional input is provided by the CP Toronto office Realtors who give a day to day, real life perspective of the local markets.
Because TREB has continued it's weekly/mid-month stats fillabuster, Chris has created his own analysis method based on MLS data for the 416 only. As September progressed, there were more active sales and avgerage sale prices were up. As an example, b/w Sept. 22nd and 29th, the average sale price increased from about $782,000 to $809,000. Between August and September, sales volume also increased from 2480 to 2514 properties. That 2% increase coupled with an 11% increase in average sale price from August is the first time in 4 consecutive months that we've seen a positive variance in both categories.
Additionally, The Bank of Canada posted yet another increase in interest rates and though the press says that may be the last we'll see before 2018, Darlene Hanley of Hanley of Hanley Mortgage Group, says they're expecting at least one more before year's end. Couple that with the new proposed stress test which, will require those paying less than 20% down to qualify at a rate of 4.94% and one would expect that sale prices won't reach the bloated values seen in April; we're still about $160-170,000 off the pace from there.
So for the moment, we seem to be headed into a healthier market. However, CP Realtors working in the 416 are reporting high numbers at open houses and buyers feeling a need for more product, so at least in the 416, we're likely to continue to see market activity and sales numbers increase. Contrast that with the 905, where at least one Realtor representing a prime property had less than 4 showings in 4 weeks. The hope is that any increase in sales going into 2018 in both the 416 or 905 areas will be sustainable (in the 3-5% range) and not the 11-20% range that got us here.
In a report published by CIBC, economists are coroborating Chris' sentiments for a rebounding Toronto market, siting Toronto's sale prices increasing, economic growth rates of 4.5% and lower unemployment numbers. The report indicated that 90% of home buyers are earning between $58-108,000/yr. (classified "middle-class"), and about 75% of mortgage holders made downpayments of 10% or more. An analysis run by Chris from 2010 indicates that Toronto home owners have been prudent in their housing purchases given the relative increase in average sales prices since that time and the releatively consistent interest rates from that time to today. All of this would seem to corelate with the data coming from CIBC.
RBC economists however, feel that Toronto will follow Vancouver's market recovery, which only recently posted year over year gains of 22%. However Chris was quick to point out that those gains were seen before further increases in bank rates. That kind of growth would be reminiscent of April's gains which Chris called "a terrible period and not something we want to experience again".
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