Photo by Johannes Plenio

The Toronto real estate market saw a continuation of the upward trend built off the confusing market of 2017. Having bounced back to similar numbers (albeit via a summer dip) since 2016’s outrageous market highs, it’s looking like Toronto’s in for another crazy run in 2020 due to continued pressure from immigration and a lack of supply overall.

Coming Full Semi-Circle

Despite average price gains across the board for all property types in Toronto, 2019 was the year that semi-detached properties saw some serious increases. Coming as close as 16% from the average for detached homes, semi-detached properties have been the holy grail for families and others trying to notch their way from condos to freehold property. We expect this trend to continue in 2020.

Condo-minimum

Condos in 2019 were no different than semi-detached properties. With a whopping 10.3% increase year over year in December, condominiums prices were driven by lack of supply as well as demand for the most affordable property on the market; a laughable stat for some no doubt as the average reached over $650K in many of 2019’s months. That being said, we may be reaching a saturation point in the average condo price. As many of the GTA’s new condominium builds are finally beginning to take occupancy, many analysts feel the ceiling on condo pricing has been reached. We’re undecided on that result as much of the supply being introduced is small and not suitable for young families; one of the key drivers in condo sales in the city.

Feeling Hot, Hot, Hot

Surprisingly, the areas of the city that have seen the greatest increase have been outlying areas in the city’s East and West-ends. This is likely due to their long-held undervaluation as investors and city-dwellers alike tried to attain prime Toronto real estate over the last few years. In some cases, neighbourhoods like West Hill and Centennial, Scarborough Village annd Guildwood, Malvern and Rouge and Willowridge, Martingrove and Richview saw increases of over 100% in the average sale price according to this Zoocasa report , proving that buyers are having to go further afield to get their piece of Toronto land.

2020 Predictions

Expect more of the same upward trends for 2020 across all property types. We’re not convinced that condos have hit their ceiling just yet and anecdotally, more and more clients and friends have decided to stay put and renovation or expand their existing homes in leu of higher interest rates, land transfer taxes and a limited supply of homes to choose from. Couple that with increased immigration pressure and investment in new developments and we have a perfect storm for a bull market going forward.

Of course there are outward pressures and variables like U.S. presidential races, the new Iranian conflict and the China/U.S. trade negotiations that could throw the entire world economy into chaos or potentially recession but barring a major war or negotiations going completely south, we feel this is the direction Toronto’s housing market is heading.

If you’d like to share your own viewpoint on the situation, we’d love to here from you! Leave a comment, send an email or give us a call. We love discussing market dynamics and the factors at play. All the best for 2020!

If you haven't been tracking the sales stats in Toronto over the past months - let's face it, stats are kinda boring so we expect you haven't - you can check out this slick infographic produced by the fine people in our marketing department; yet another perk of working with a Chestnut Park Realtor. 

Condos continue to increase in price as the most affordable product on the market up to their average in April of $601,211 (+3.5% from March!). But more shocking perhaps is the overall Average Sale Price for Toronto, which is approaching something similar to last April when the market saw it's highest highs of all time. What does this mean? That the correction was just that and that buyers still hold Toronto real estate in high regard. 

If you're wondering where you stand as a buyer or where your property stands as a seller, please get in touch today for a free consultation. We're always happy to help!

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.

BACK AT IT

We took a two week hiatus from the weekly meeting posts as last week both Chris and Richard Stewart (on-staff lawyer) were away and the week previous, there was very little news of relevance beyond to us Realtors and Brokers.

We began this week as usual; with a few stats. If you don't receive our monthly market reports, you can see the latest infographic along with Chris' comments on our blog here.

Additionally, new data for this week is beginning to show the real discrepancy in the year over year statistics. With just over 1,100 properties sold so far this month, Chris expects this number to go to 2,200-2,300 by the end of the month; down 24% from February 2017. Though this reads dramatically, it should be restated that early 2017 saw the highest inventory and sales averages Toronto has ever seen, so it's not an overstatement to say that the market was inflated. That being said, this years numbers represent a more sustainable level of inventory. The primary reason for this decline outside of previous market data is that detached properties aren’t selling nearly as much as semi-detached and condominium apartments. As reported in the Market Update, the number of $2M properties sold is also down, and the average sale price in the 416 is still around $750,000 where last year's was almost $850,000.

No doubt up until May, when prices began to correct, we'll see lots of negative press about this, but the larger story is that the market is still going through a correction to achieving more sustainable numbers and that the 416 area is still experiencing growth, albeit at a slower pace.

CHMC SEES IT DIFFERENTLY

The Canada Mortgage and Housing Corporation doesn't share our modestly positive viewpoint on the Toronto real estate market. It's latest Housing Market Assessment says markets like Toronto, Hamilton, Victoria and Vancouver are still being overvalued and are vulnerable to further price corrections. The report takes into account economic fundamentals such as personal disposable income and population growth, as well as price acceleration as it's indicators for the valuation. House prices in Calgary, Edmonton, Saskatoon and Regina appear broadly in line with fundamentals, but strong evidence of overbuilding is still observable. 

A NEW LEASE ON LIFE IN TORONTO

It was announced a couple weeks back that as of April 30th, 2018, a new standardized lease agreement for all rentals in Ontario will become mandatory. This new document will not be retroactive but will be required for anyone wishing to lease a residential property on or after April 30th. The new form virtually negates the use of any existing OREA Offer to Lease forms which could otherwise detail conditions that would contribute to the final lease document. Though the details are not 100% clear at this point, we expect that the new form will either be used as a schedule to an offer to lease or function as the primary document to facilitate the lease agreement. More information, as well as a link to the document itself, can be found on the Government of Ontario website.

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