Each week, The Glenn Team provide highlights from the weekly CP office meeting to provide a blanced 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.

This week's analysis of the market parallels much of what was covered in last week's post. However, there is one central theme that Chris drew upon concerning the housing market in Canada as a whole, and how Toronto and it's various districts mirrors it.

LEVELLING OFF
As evidenced in the chart below, we are finally getting evidence of a plateau in the GTA market, and there is an expectation that sales numbers and values will begin to climb by the end of September. The year over year negative variance is beginning to decline indicating volume is stabilizing. 

DISTRICT DISTINCTIONS
There is a wide range of activity between various districts in both the 416 and the 905, with the average sale price down by about 1.2%. Chris feels this is due in large part to fewer detached properties in the $2M+ range. However, certain areas of the city, ie. E01, E02, and E03 have properties still selling over 100% of ask (ignoring any price discrepancies) with average days on market around the 14 day mark. The majority of sales in August were semi-detached (up 15.4% yr/yr) and condo apartments (up 21% yr/yr). Looking to the 905 districts, we see a decline in volume of almost 42% which also likely accounts for a drop in average price through the GTA. For both districts, the months of inventory (healthy around 3 months) is still quite low, being around 1.3 months. The sales to list ratio around 64.4% in the 416 as opposed to just under 59% in the 905 means that the 416 is moving faster and holding it's value better than in the 905. 

CONDOS ARE KING!
Another shocking stat to be aware of is the average sale price for condominium apartments, which just broke the $600,000 mark at $600,781 in August. Clearly the high demand for a more affordable product has made it less affordable overall. With supply levels being drastically low, we should expect this trend to continue unless some new inventory comes up soon. For some perspective, there are about half the number of condos currently listed as a year ago, down from around the 5000 mark. 

CANADIAN REAL ESTATE PERSPECTIVE
The big take away from all of this information is that Toronto appears to be on the rebound (though we'll have a clearer idea by the end of September), following suit to cities like Vancouver and Montreal. While Montreal hasn't seen the generous gains of the Toronto market, sales prices have been rising about 3% yr/yr and Vancouver is showing big gains in both volume and sales price (22.3% and 9.4% respectively). Economists point to the same factors for all 3 cities; job creation, consumer confidence and migration. All things being relatively equal, we should expect the Toronto market to be headed higher once the psychological effect of the new rental rules and tax legislation wears off. The bank of Canada's rate hike may play into that equation somewhat but should only affect most mortgages by about 2% on average. 

For more clarification on any of the above information, please get in touch! theglennteam@chestnutpark.com or 416-925-9191.

To keep our clients better informed of the Toronto market, we're initiating this weekly instalment on our blog. The CP Weekly Meeting Highlights will summarize the most salient information from our weekly office meetings, headed by Real Estate veteran, lawyer and all around good guy, Chestnut Park's Broker of Record Chris Kapches.  We are doing this as we feel that the media is giving a very one-sided perspective of market activity and seems to focus on the GTA statistics rather than Toronto specifically. 

Psychology
Though this topic wasn't addressed at this week's meeting, it has been a central theme to discussions of market activity over the summer months. Measures taken by the government, coupled with already inflated prices, an over-abundance of inventory and negative news in the media have all combined to give us the market we're currently in. Buyers felt the market had further room to decline, while many sellers felt they should still be getting the prices we were experiencing up to mid-April; when prices were at their peak. Today, the media continued this trend as it posted declines of 40% in "Toronto" despite these numbers reflecting price declines throughout the entire GTA, which, includes areas like Richmond Hill and Mississauga. This lack of specificity has led many to believe similar declines have been experienced in the City of Toronto proper, when in fact, this just isn't the case. As an example, in July inventory levels were sighted as increasing by 30-40% when in fact the numbers in the City of Toronto were closer to 2%. Whether these skewed stats will continue to contribute to an already confounded public remains to be seen. 

Increases in Sales for August
As our meeting was held yesterday and full numbers were not yet published, Chris was looking at the market based on stats from August up to that point. Now having the official numbers for the month, we've seen a small increase in the number of sales through the month of August; . However, it appears as though we will continue to see a negative variance in sales prices and numbers for the month of August b/w 35 - 38% in the GTA. One thing that seems certain however is that the market appears to have stabilized from the large dip starting in June. The average sale across all housing types in the GTA, price came in at $732,292, which is actually a rise of 3% over August 2016, but a decline from July's average of $746,033. 

Negative Variances
Despite this plateau in price declines, we will continue to see negative variances throughout the next 12 months, simply because stats for declines are done year over year. If we can see a move to an annualized appreciation in values to the 5-7% mark, the market could be considered as being strong and healthy. 

Annualized Growth Rate
Chris has some added concerns regarding Canada's annualized rate of expansion (based on the last quarter) coming in at 4.5%, making Canada the fastest growing economy in the G7. How this impacts interest rates going forward is the big question, and how that rate hike will impact the housing market; the expectation would be a rate of 3.5%. This could effectively eliminate buyers at the low-end of the housing spectrum. Compounding that problem is that the most affordable housing product for that population is condominium apartments; a product that already has very little in terms of inventory. The increase is likely to come out in late October as opposed to this week. 

Too Soon To Tell
We will have a clearer picture of the market once numbers for September come in. From the response in the office, we are likely to see an increase in inventory in the Toronto (read 416) area over the month.

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