The Toronto and area residential resale market continued its recovery in April. For the fourth consecutive month the market has shown improvement in both the growth of average sale prices and the number of properties reported sold. In April 7,792 residential properties were reported sold, and the average sale price for all properties reported sold in the Greater Toronto Area came in at $804,584. In January, the average sale price had slumped to $735,754. In four months, Toronto’s average sale price has increased by almost 10 percent.
The market has not recovered to where it was in April 2017, but it is showing signs that it might, particularly in the City of Toronto (416 region). The reason for this recovery is obvious. The fundamentals that drove the frenzied early 2017 resale market are unchanged: strong employment numbers, a growing economy, migration to the greater Toronto area, and insufficient inventory to meet buyer demand. With more than 100,000 people migrating to the Toronto area annually, the supply demand scenario is no longer in balance. It’s a testament to the strength of the Toronto resale market that it has continued to recover notwithstanding three mortgage interest rate hikes and new more rigid stress testing for mortgage qualification.
In the City of Toronto, the average sale price came in at $865,817 for all types of properties sold, including condominium apartments. The cost of a detached property rose to $1,354,719, while semi-detached homes came in at $1,021,986. These numbers are starting to approach the numbers that the market was producing last year. Year-over-year sale volumes are down by 34 and 16 percent respectively, but in the case of semi-detached properties this is a product of supply and not demand. In some of Toronto’s trading area there were no reported sales of semi-detached properties. That’s because there were no listed properties for buyers to buy.
The strength of the market is profoundly demonstrated by the short time periods that detached and semi- detached properties remained on the market. All detached properties sold in only 17 days and for an amazing 101 percent of their asking price. All semi-detached properties sold in an eye-popping 13 days and for a startling
106 percent of their asking price. These numbers are only slightly short of what was happening last year.
Condominium apartment prices have risen consistently, even through the downturn in the market following the announcement of the Ontario Fair Housing Plan in April of last year. In April, and for the first time, the average sale price for all condominium apartments sold exceeded $600,000 coming in at $601,211. In Toronto’s central core, where more than 67 percent of all sales take place, the average sale price reached $667,345. Toronto’s most affordable housing form is rapidly becoming less affordable. Not only did condominium apartments sell with growing average sale prices, but they all sold in only 16 days and at 101 percent of their asking price. In the central core they also sold at 101 percent of their asking price and in only 15 days.
Condominium Apartment sale prices are, like other housing forms, being driven by a sever lack of supply. At the end of April there were only 2,130 apartments available to buyers, a little more than one month’s supply. Last year at the height of Toronto’s frenzied market there were 2509 condominium apartments on the market, a year-over-year decline of available inventory of more than 15 percent.
The high-end market has been the only laggard in Toronto’s resale market. Year-to-date only 600 properties having a sale price of $2 Million or more have been reported sold. Last year 2221 had been reported sold, a decline of more than 73 percent. This market sector is, however, also improving. In April the negative variance, as compared to last April, was only 48 percent.
The Toronto and area market place is beginning to send out two powerful messages. Firstly, the foreign buyers tax that was part of the Ontario Fair Housing Plan was directed towards a non-existent enemy. There were no hordes of foreign buyers buying Toronto real estate. There were no barbarians at the gate. That has been subsequently verified by not only the provincial government, but by other sources, namely the Toronto Real Estate Board and CMHC. Secondly, the Toronto resale market is being driven by local, domestic forces. That being the case, governments should abandon any attempt to engineer the market place and focus on measures that will help the increase of supply.

In March the Toronto residential real estate market clearly demonstrated its resilience. Notwithstanding the provincial government’s attempt to engineer the market, it continues to respond to forces that have nothing to do with the Ontario Fair Housing Plan. That’s due primarily to the fact that the underlying basis for the province’s measures, namely foreign buyer speculation, were unfounded. Since the implementation of the Fair Housing Plan it has been demonstrated that less than 5 percent of all purchases of residential properties in the greater Toronto area involved foreign buyers.

The real and fundamental factors driving the Toronto and area marketplace have remained unchanged: low unemployment, rising wages, a growing (albeit modestly) economy, and most importantly, the combination of low supply and continuous immigration into the greater Toronto area. Ultimately what will control the Toronto residential marketplace is the market itself, specifically the cost of housing. The Fair Housing Plan, to its credit, did act as a wake up call to buyers, but ultimately it will be the cost of mortgage money, qualifying for mortgage financing, rising average sale prices (due primarily to a lack of supply) that will control and moderate the residential resale market.

In March the lack of supply was clearly demonstrated by the rising average sale price. March saw an average sale price for all properties in the greater Toronto area of $784,558, an increase of 2.2 percent compared to January, and almost 7 percent higher than February’s average sale price. Demand was demonstrated by how quickly all listed properties sold in March. The average days on market was only 20. That is a pace consistent with the most aggressive seller’s market. In some areas of the market, particularly in the 416 region, the days on market was even lower.

All detached properties in the 416 region (City of Toronto) sold in only 17 days. All semi-detached properties sold in a shocking 13 days, and in only 11 days in Toronto’s eastern regions. All condominium apartments in the City of Toronto sold in only 17 days. As hard as this is to believe, this is a pace not that different from the delirious pace of the first four months of 2017.

When the market moves at the above-noted pace, it is not surprising to see average sale prices rising. In the City of Toronto all properties, including condominium apartments, sold for 101 percent of their asking prices, coming in at $817,642. All detached properties sold for 100 percent of their asking prices, coming in at almost $1,300,000. Unbelievably semi-detached properties sold for 107 percent of their asking prices, the average sale price exceeding $1,000,000. Even condominium apartments sold for 101 percent of their asking prices with an average sale price of $590,000. In Toronto’s central core, the average sale price for condominium apartments was $656,836, not that much less than average sale price for all property sales in the greater Toronto area. Condominium apartment sales are now taking place at approximately $1,000 a square foot.

The ultimate reason for these incredible numbers is the lack of supply. Notwithstanding that the number of active listings in March (15,971) was 103 percent higher than the 7,865 properties available last year, the bulk of the available listings are located in the 905 region. Of the 15,971 available properties for sale, 75 percent are located in the 905 region. In the case of detached properties, 83 percent of all detached properties are located in the 905 region. The situation involving condominium apartments is reaching crisis proportions. In March 1,573 condominium apartments were reported sold. At the end of March there were only 1,854 condominium apartments available for sale, most of them in Toronto’s central core. If this rate of absorption continues, there will be almost no product for buyers. This is particularly troubling because condominium apartments have been the only affordable housing type available to buyers.

Detached properties were the only housing type that continues to lag behind the rest of the Toronto market. Sales were off, year-over-year, by more than 40 percent, and average sale prices were off by almost 18 percent. The explanation is self evident. During last year’s delirious market, mortgage money was historically cheap, and relatively accessible. Since then not only has mortgage money become more expensive – three bank rate hikes in the last year – but new mortgage stress testing for conventional mortgages makes qualifying substantially more difficult. It should also be noted that during the January through April real estate madness of last year’s average prices reached astronomical levels, levels that simply could not be sustained.

Going forward we are not likely to see much change in Toronto’s residential resale market. The key to change is more supply. There is no indication either at the provincial or municipal level that measures will be taken that would have a positive impact in this area. For political reasons governments may attempt further engineering, but any such actions will have a limited impact on the market, but are likely to have broader, negative economic impact. Without dramatic change to Toronto’s available supply, Toronto will become one of many other cities in the world that because of their political and financial stability where real estate ownership will not be available to everyone. That begs another question: what about the rental supply?
There were no surprises in February’s residential resale data. Last year in February the market was verging on delirium. With record low mortgage interest rates, a severe supply problem, and a collective psychological belief that if you didn’t buy immediately you would be shut out of the market permanently. Under these conditions it was not surprising that prices were increasing by more than 30 percent on a year-over-year basis.

Its also not surprising that this year we are witnessing negative variances as compared to last year. Since the early months of last year, we have seen government intervention in the form of three mortgage rate hikes, a 15 percent foreign buyers tax, and a rigid new form of stress testing borrowers seeking conventional mortgage loans. Conventional loans are mortgages that do not exceed 20 percent of the value of the property. Yet despite all of this the Toronto and area residential resale market has held up fairly well.

There were 5,175 reported sales in February, a 34 percent decline compared to the 7,955 sales reported last year. But comparing this year’s sales against last February is like comparing the Toronto market against a fictional metropolitan area that no longer exists. Last year’s results were extraordinarily driven by a never before seen market delirium, a delirium that crashed with the announcement of the provincial government’s Fair Housing Plan and the implementation of the foreign buyers tax.

Yet despite all these market shocks, all properties still sold in only 25 days and the average sale price in the greater Toronto area came in at $767,818, a 12 percent decline compared to last February. That decline, however, requires some clarification. The decline in average sale price was primarily driven by the decline in sales and prices in the 905 region and the decline in sales of higher priced properties ($2 Million or higher). The average sale price in the City of Toronto (416 region) came in at $806,494 and that despite the fact that the bulk of all condominium apartment sales----- the least expensive housing type------are located in the city of Toronto. Prices in the 905 region declined to $767,816, a substantial decline from last year when they came In at $876,000.

The biggest drag on average sale prices was the decline in higher priced property sales. This is not surprising and expected. In last year’s frenzied market, 389 properties sold having a sale price of $2 Million or more, most of them being detached properties. This February only 126 properties in this price point were reported sold, a 67 percent decline. A decline of this magnitude, representing more than 5 percent of the entire market, will have a powerful, negative impact on the market’s average sale price.

Again it is not surprising that this decline has occurred. Detached property values had reached stratospheric, unsustainable levels. Last year the average sale price for a detached property was approaching $1,600,000 for the greater Toronto area and more than $2,500,000 in Toronto’s central districts. This year average sale prices have been reduced to $1,282,240 and $2,027,761 respectively. These are prices that are beyond the reach of most buyers, particularly with the increase in mortgage interest rates and the new stress testing. Given the impact of these factors we can anticipate further softening of prices for sales of this property type, or at the very least a plateauing.

Semi-detached sales are also in decline compared to last year but to a lesser degree and for different reasons. Across the city of the Toronto the average sale price for semi-detached properties still came in at $985,902, and at more than $1,235,000 in Toronto’s central districts. Sales of all semidetached properties took place in only 19 days and at 103 percent of their asking price. These are not statistics emerging from a market that is in trouble but rather the opposite. In Toronto’s eastern districts, particularly those closest to central Toronto, all sales took place in only 13 days and for sale prices approaching an astounding 110 percent of the asking price. These numbers point to strong demand and a very limited inventory.

The supply of resale condominium apartments is approaching crisis levels. In February 1, 687 new condominium apartment listings came to market, a 10 percent decline in the number of listings that came to market last year. The Toronto condominium market effectively finds itself in exactly the same position as last year at this time, except that prices are almost 11 percent higher. The condominium apartment that one could buy last year for $515,000 will now cost buyers $570,000. In the central districts where most buyers would prefer to locate, the average sale price is now an amazing $645,000. Last year the average sale price was $ 577,000. All condominium apartments sold on only 22 days and for 100 percent of their asking prices. Ironically in Toronto’s central districts, where prices are highest, all condominiums apartments sold in only 21 days and for 101 percent of their asking prices.

The Toronto and area marketplace is where it would have been without the provincial government’s intervention, constrained by the weight of, what is now clear, unsustainable prices. Going forward sales will pick up as sellers come to the realization that except for the most desirable properties in the most desirable areas, sale prices achieved last year are no longer realistic, particularly with higher mortgage interest costs. Basic economic factors----employment, strong economy, increasing wages----are very positive and therefore demand will remain powerful. When prices align with buyers’ financial capabilities the market will once again begin to grow, but prices will remain in check, especially if we see further increases in mortgage interest rates, as anticipated.
The residential resale market in the first month of 2018 is, in a phrase, a tale of two markets. Actually, that is not entirely true. It is a tale of many markets, a fractured landscape that varies by housing type, and, importantly, by location.

The overall data for the greater Toronto area indicates that compared to January 2017 sales declined by 22 percent, from 5,155 last year to 4,019 this year. The average sale price also declined, from $768,351 last year to $736,783. A closer look at the data reveals that, except for detached properties, the decline in average sale prices was almost exclusively in the 905 regions. The 416 regions, or the City of Toronto, actually experienced price growth.

In January 2017 the average sale price for all properties sold, the bulk of which were in the 905 region, was $770,745. This year the average sale price declined to $736,783. Last year, the average sale price in the 416 region was $727,928. This January the average sale price increased to $766,616, an increase of 5.4 percent. So, whereas prices are declining in Toronto’s outlying areas, within the city itself, they continue to increase.

The only housing type in the 416 region that saw price reductions was detached properties. The decline was modest at 3.9 percent. There is no surprise in this decline. Detached properties in Toronto in early 2017 had become exceedingly expensive. Detached properties continue to be expensive, the average sale price coming in in January at $1,283,981. The high end of luxury properties sales had an overall decline in January. Last year 166 properties were reported sold having a sale price of $2 million or more. This year that number dropped to only 90.

There are a number of factors responsible for this decline. Firstly, the run up of prices in early 2017 for detached properties, particularly in the City of Toronto, was simply unsustainable. Secondly, we were greeted with new mortgage stress testing rules in 2018 for conventional mortgages (all sales over $1 Million must by conventional – that is the minimum deposit required by buyers is 20 percent of the purchase price). Early indications are that the new mortgage stress tests reduce the purchasing horizon of buyers by about 15 percent. That means that buyers will either buy lower priced properties, or pay less than they could have before the new stress testing. Lastly, there is an uncertainty in the market place that is resulting in hesitancy. There is a belief that prices may continue to decline, so why buy now.

Active listings are also up substantially in early 2018. Last year at this time there were only 5,034 available properties for sale, less than the total number of sales that were achieved in January 2017. Active listings this year have increased by 136 percent, to 11,894. Interestingly, the increase in active listings is heavily concentrated in the 905 region.

For example, last year there were 211 semi-detached properties for sale in the greater Toronto area. This year that number has jumped to 765, an increase of 262 percent. By comparison, in the City of Toronto last year there were 102 semi-detached properties for sale, and this year there are 219, an increase of 115 percent, substantially less than the increase in the 905 region. In fact, in the case of semi-detached properties in Toronto, even with the increase we have experienced, the supply remains insufficient to meet demand. It is for this reason that in Toronto’s popular eastern districts (Riverdale, Leslieville, Beaches) sales continued to take place at more than 105 percent of asking prices, and on average in only 16 days. Sales in the Greater Toronto market place took place on average in 32 days, 68 percent longer.

As has been the case for a number of months, condominium apartments sales continue at a blistering pace, albeit not quite as fast as last year. Sale prices have been sky rocketing. Last year the average sale price for condominium apartments in the Greater Toronto area was only $442,598. This year it is $507,492. In the City of Toronto the average sale price has jumped from $471,409 to $543.279. Prices have reached challenging levels in Toronto’s central districts. Last year the average sale price was $529,000. That same condominium apartment will now cost you $616,322, almost 17 percent more than last year.

As we move into February the resale landscape remains fractured. It will continue to remain in this strange state until May, when comparisons on a year over year basis become more balanced. Until then comparisons will be made with the first few months of 2017, the most incredible months in Toronto’s resale market history, and unless the various markets in Toronto’s overall landscape are examined, the variances will appear very negative. It’s that psychology that will be at play for the next few months.
We move into 2018 saddled by a number of market factors that make predictions more difficult than they already are for any year in real estate. 2017 was, without doubt, one of the most remarkable years in the history of the Toronto residential real estate market. The year began in the most frenzied fashion possible. During the months of January, February, March and April, sale prices were increasing in an unsustainable fashion, topping out at 33 percent on a year over year basis in March. By April the average sale price for all properties sold in the greater Toronto area had reached an alarming $920,000. That number included all condominium apartment sales, the least expensive housing form available to buyers.

On April 20th, everything changed. On that day the provincial government announced the Ontario Fair Housing Plan. Amongst other measures, it imposed a 15 percent tax on residential real estate purchases by foreign buyers. Technically this measure should have had an insignificant effect on the market – after all only 4 percent of all homes were purchased by foreigners, as defined by the legislation. But the implementation of the tax acted as a psychological wake up call, causing buyers to stop, look at the astronomical amounts they were paying for properties, and wait to see what the impact of the tax would be on sales and sale prices.

By May sales of residential properties had declined by more than 20 percent (with more to come in the ensuing months) and average sale prices began a steady decline. By June the average sale price for all properties sold had declined from $920,000 in March to $794,000.

During the first four months of 2017 Canadians had become the most indebted households in the world, carrying 170 percent debt compared to household income.

In the months that followed, and on the strength of the Canadian economy, the Bank of Canada increased rates twice by a quarter point on each occasion. Suddenly buying a residential property in the greater Toronto area became more expensive to service the associated debt. But government intervention was not yet at an end. The Office of the Superintendent of Financial Institutions announced that effective January 1st, 2018 new stress tests would be applied to buyers borrowing from federally regulated lenders. These stress tests would also be applied to conventional borrowers, that is, borrowers with a down payment of 20 percent or more (high ration borrows have always been stress tested). Effective 2018, conventional borrowers will be qualified using the Bank of Canada’s 5-year benchmark rate (which is approximately 5 percent) or at the current contracted rate plus 2 percent if that rate exceeds the benchmark rate. A buyer currently approved at 3.5 percent will now have to qualify at 5.5 percent.

This brings us to December. Notwithstanding the market upheavals of 2017, December closed the year in a very positive fashion. There were a respectable 4,930 reported sales, only 7 percent less than the 5,305 sales reported in December 2016. The average sale price came in at $735,000, almost 1 percent higher than the average sale price during the same month last year.

A deeper analysis of the resale market indicates that the 416 region has fared much better than the 905 region. The average sale price in the city of Toronto remains strong, with detached properties selling for $1,250,000, semi-detached for $903,000 and condominium apartments for $532,000. By comparison detached properties in the 905 region sold for $910,000, semi-detached for $636,000 and condominium apartments for $430,000.

The most dramatic change between December this year and 2016 was the change in the number of active properties available for sale. Last year there were only 4,930 available properties. This December that number has increased to 12,926, a startling increase of 172 percent. Once again, a deeper analysis indicates that the bulk of the properties available for sale are located in the 905 region, where sales have been slower and prices have declined. Last December there were 2,736 properties available for sale in the 905 region. This year that number has swollen to 9,190 an eye-popping increase of 235 percent. By comparison last year in the 416 region there were 2012 properties available for sale, this year that number rose to 3,736, or 85 percent, considerably lower than the increase of inventory in the 905 region.

Considering everything that occurred in 2017, we should take comfort in December’s numbers. Going forward buyers will have more choice, and given the new stress tests, they will need that choice to find the property that best suits their now more restricted debt servicing budget. Sellers can take heart in that value, for properties reported sold, particularly in the 416 region, have remained strong, with only a slight, and sustainable increase, compared to 2016. All this points to a balanced, sustainable, yet strong residential resale market for 2018. Desirable properties in desirable neighbourhoods will continue to attract buyer attention, generating multiple offers, and over-asking sale prices. What we don’t need is any more government intervention. The market will do nicely without it in 2018.
November finished strong but in a fractured fashion. To use a cliché, not all markets were equal in November.

The City of Toronto (area code 416) continues to strengthen, following the market declines after the province’s announcement of the Ontario Fair Market Plan and in particular a 15 percent tax imposed on foreign buyers in late April. In the City of Toronto, where generally there was much less foreign buyer activity than in the 905 region, the shock of the foreign buyers tax has been absorbed. The impact of the tax in the 905 region continues to negatively impact that residential resale market.

The only drag on the City of Toronto’s residential resale market is the sale of detached properties.

Detached property sales in the City of Toronto were off by 19 percent compared to November 2016. Sale prices faired more favorably. Compared to the same period last year they declined by only 5 percent, a clear indication that the market is further stabilizing.

Semi-detached and condominium apartments in the City of Toronto produced very strong results. Semi-detached property sales were only off by 4 percent compared to last year, and impressively prices were flat compared to November 2016. Condominium apartments provided even more remarkable results. Sales were up by almost 18 percent compared to last year, and sale prices declined by only 6 percent. This data makes it clear that the residential resale market has almost returned to where it was a year ago, which was the beginning of the irrational market runup that began in January of this year and was crushed by the provincial Fair Market Plan.

Although the market will continue to recover into 2018, it is not anticipated that it will parallel the Vancouver phenomenon after the British Colombia government promulgated a foreign buyers tax in that province in 2016. Since then we have seen two quarter point interest rate hikes by the Bank of Canada and the announcement by the Office of the Superintendent of Financial Institutions that commencing in January 2018, uninsured borrowers (borrowers who put down more than 20 percent of the purchase price of a property) will have to demonstrate that they can afford their mortgage payments at either the five-year average rate noted by the Bank of Canada or two percentage points higher than whatever rate they were able to negotiate with their bank. Simply stated, borrowers will have to show more income to qualify for a mortgage than they did in 2017.

Overall sales of residential resale properties have shown an impressive improvement compared to the months following the Fair Housing Plan announcement. There were 7,374 properties reported sold in the Greater Toronto area. This compares to 8,503 properties reported sold in November last year, a decline of only 13 percent. Notwithstanding this negative variance, it compares very

favorably to the massive negative variances in June, July, August and September. Another positive sign of market recovery. Although sales were not occurring as quickly as they were last year at this time, at only 24 days on market, sales were brisk by historical standards.

The large negative variances in sales in the months mentioned above, (June, July, August and September) and an increased number of properties coming to market have increased the supply of properties available to buyers, with the exception of condominium apartments. Due to their price point, condominium apartment demand has remained strong, resulting in tight inventory. At the end of November, there were 18,197 properties of all types available to buyers in the Greater Toronto Area. This compares with only 8,639 last year, an increase of 110 percent. It should be remembered that the 8,639 properties available last year was a critically and dangerously low supply. That was made evident by the explosion of the irrational resale market that we experienced between January and April 20th of this year. In November, 14,349 new listings came to market, a 37 percent increase compared to the 10,456 new listings that came to market in 2016. There is no question that buyers have considerable choice compared to last year. This is another factor that mitigates against a repetition of what occurred in Vancouver, here in Toronto.

For the first time in years on a month-over-month, year-over-year comparison, the average sale price declined. Last year the average sale price came in at $777,091. This November it came in at $761,091, a decline of 2 percent. The decline was primarily due to the decline in the average sale price of detached properties in the 905 region. There were 2,319 detached properties sold in the 905 region in November. Their average sale price came in at only $898,605. By comparison, the average sale price of detached properties in Toronto (416 region) was a staggering $1,276,184. Unfortunately, there were only 812 properties in this category, not enough to have a significant impact on the overall average sale price.

Going forward, what we do not need is any further government intervention in the market place, unless it is designed to stimulate the supply of housing, particularly purpose built rental units. The provincial government’s politically motivated decision to move to universal rent controls in Ontario may win the liberals the next election, but it will have a devastating impact on the rental housing market and will only hurt those it was “designed” to help – tenants. The market has moved into balance, with more choice for buyers, and price increases now consistent with inflation and wage growth. A balance that will be further stabilized by the new mortgage stress testing. Government should let market forces control the residential resale market, just help with supply.
The Toronto residential resale market returned to form in October. It returned to where it should have been
before the frenzy set in at the beginning of this year and buyers began competing for properties indiscriminately
and paying unreasonable prices. Price increases of 30 percent on a year-over-year basis are simply unsustainable.
Even without the implementation of the 15 percent foreign buyers tax introduced in April the market would have
returned to reality. Reality was accelerated by the tax.

Comparing the resale market today with what was happening in the first four months of 2017 is pointless,
although that appears to be a favourite partime of journalists. Rather, if we compare the market to last year, and
assess what has happened since the end of May, we get a picture of a strong, stable market, that surprisingly
has yet to move to a balanced market. Having said that, we also see a fractured picture in which some trading
districts in the greater Toronto area are much stronger than others.

In October, there were 7,118 reported sales, a substantial improvement compared to the 6,379 in September.
Last October there were 9,830 reported sales in the greater Toronto area. Although the year-over-year variance
was 26 percent, that variance was a dramatic improvement compared to the monthly variances between May
and this month.

Except for the condominium apartment sector, what has changed is the supply of properties on the market.
In October supply was up by almost 70 percent compared to last year. At the end of October there were
approximately 18,850 properties available for buyers to purchase. That compares to only 10,563 last October. It
was last year’s lack of supply, coupled with historically low mortgage interest rates, that drove the market into
the frenzy that we experienced during the months from January to April.

Buyers are still alive. They are now more deliberate. However when attractive homes in desirable neighbourhoods
become available buyers respond quickly, often still finding themselves in competition. This is clearly demonstrated
by the fact that all sales in the greater Toronto area took place in only 26 days. By any assessment this is a
scorching pace.

Twenty-six days represents the overall days on market. Depending on housing type and location the market is
even faster. For example, and notwithstanding that the average sale price for detached properties came in at
$1,287,765 in the City of Toronto ($1,008,207 in the 905 region), all detached properties sold in only 19 days.
Semi-detached properties, with an average sale price of $948,309, sold in an astounding 17 days. Historically
strong neighbourhoods like Riverdale, Leslieville and the Beaches are seeing sales take place in only 10 to 12 days,
and for average sale prices substantially higher than asking prices. The market place in these neighbourhoods
appears to be shockingly unchanged when compared to the pre-April market.

The average sale price for all properties sold also strengthened in October. It came in at $780,104, up 2.3 percent
compared to October 2016. In September, the average sale price was $775,564. A year-over-year increase of approximately 3 percent is ideal. It is consistent with inflation and more importantly wage increases. During the
later part of last year and into this year, price increases were manyfold times higher than increases in wages.
That is an unsustainable situation. Since April we have also seen the Bank of Canada increase the bank rate by 50
basis points, causing mortgage interest rates to rise, although at 3.5 percent (five-year fixed term) they continue
to be historically low. Looming ahead is the stress testing that will take place in January. Even though borrowers
will be paying the lenders reduced mortgage rates, they will be qualified on a rate 2 percent higher than what
they will be paying. The new stress testing will act as a further control on exuberant increases in home prices.

Although prices generally have come under control and are in the sustainable range, condominium apartments
continue to sell for approximately 21 percent more than a year ago. There are two reasons for this unique
activity. Even though condominium apartments are becoming pricier, they are still the most affordable housing
type available to buyers. Secondly there is little supply. Whereas the overall supply of housing year-over-year
has increased by almost 80 percent. There have been no appreciable increases in the supply of condominium
apartments.

Under these circumstances it is not surprising that condominium apartment prices are rising. In October, the
average sale price for condominium apartments came in at $555,004. In Toronto’s central core where most
condominium apartments are located and where most sales take place, the average sale price was an eyepopping
$620,000.

In October, we also witnessed an improvement in the numbers of high-end sales, properties having a sale price
of $2,000,000 or more. In September, there were 188 sales in that category. In October that number jumped to
208, an increase of more than 10 percent.

As the resale market moves towards the end of the year and a form of balance that we have not experienced in
some time, both buyers and sellers should be thrilled with the markets transformation since April. We have an
increase in supply for buyers, and steady but sustainable price increases for sellers. The area of major concern,
which is beyond the scope of this residential resale market report, is the rental market and its critically low
vacancy rate.
September marked a change in the Toronto residential market place. For the first time since April, the average sale price for all properties sold in the greater Toronto area actually rose.

The monthly average sale price had been on a downward spiral ever since the provincial government announced the introduction of a 15 percent foreign buyers tax on April 20th.

In September the average sale price came in at $775,546. September’s average sale price was 6 percent higher than August’s average sale price, and almost 3 percent higher than the average sale price achieved in September, 2016. This is a welcome change, and the first step to the resale market’s return to normalcy. Not the frenzied market that we experienced from January through April, but the 2016 market, that saw property values rise in a moderate, sustainable way.

Although the market did recover in September, the recovery remains fractured, with some sub-markets out performing others.

On the broadest level, the 416 area code, as a trading district, is outperforming the 905. Sales volumes for the greater Toronto area were down 35 percent compared to last year. This September 6,379 properties were reported sold, last year there were 9,830. Comparing the 416 and 905 trading areas, a different picture emerges.

Whereas the overall market was off by more than 35 percent compared to last year, the 416 trading area had only declined by 29 percent. The 905 trading area did not fair as well, with sales off by almost 40 percent. The same is true for average sale prices.

As indicated above, the monthly average sale price for the greater Toronto area was $775,546, up 2.6 percent compared to last year. On an unweighted basis, the average sale price for all properties sold in the 416 region increased by almost 10 percent compared to last year. In the 905 the increase was slightly less than 6 percent. So clearly the numbers emerging from the 905 region are acting as a downward drag on the results of the overall resale market place.

But even within the 416 trading districts there are regional differences. Sales of detached properties were down by 41 percent in September. The volume of semi-detached properties sales was down by only 15 percent, and 23 percent for condominium apartments. Average sale prices for detached and semi-detached properties rose by 4 and 5 percent respectively compared to September 2016, whereas condominium apartment average sale price rose by 24 percent compared to last year.

Notwithstanding the negative press concerning the Toronto resale market place and its “collapse”, house prices in Toronto continue to be very expensive, but given prevailing interest rates, still sustainable. In September the average price for a detached home in Toronto’s 416 region was $1,355,234. The cost of a semi-detached home was not far behind at $935,467.

Even condominium apartments are becoming pricy. In September, the average price for a condominium apartment was
$554,069. In Toronto’s central districts, where most of Toronto’s condominium apartment towers are located, the average
price for a condominium apartment was $615,654. There were 917 sales in this category, almost 1/6 of the total inventory of properties sold in September. Notwithstanding these elevated prices, all the condominium apartments sold for 100 percent (on average) of their asking price.

On the freehold side, the region just to the east of the central core, comprising the neighhourhoods known as Riverdale,
Leslieville, and the Beaches, continues to trade as if the downturn experienced everywhere else in the greater Toronto area miraculously missed it. In September all detached properties in these areas sold for almost 104 percent of their asking price and in a mere 14 days. Semi-detached properties moved even faster. Semi-detached properties in these neighbourhoods sold in just over 8 days and for sale prices that exceeded the asking price by more than 105 percent. The average sale price of detached and semi-detached properties reported sold in these neighbourhoods was $1,286,000 and $928,000 respectively.

Over the last 5 months the market has moved from an insane seller’s market to a more nuanced, balanced market (except of course in Riverdale, Leslieville, and the Beaches). In September, 16,469 new properties came to market, an increase of more than 9 percent compared to the 15,050 that came to market last year. At the end of September there were 19,021 properties available to buyers, a stunning increase compared to the paltry 11,255 available last year. In percentage terms, availability has increased by 69 percent, year-over-year.

Needless to say, with an increase in supply, both average days on the market and months of inventory have increased
dramatically. Year-over-year days on market have increased from 16 to 24 days. Months of inventory, calculated on a 12 month moving average is now 1.5 months for the greater Toronto area. Months of inventory, using September data, is more like 3 months, a much more accurate reflection of the market than the 12 month moving average.

The market is normalizing. It will continue to improve moderately, as year-end approaches. Sellers hoping for the heady days of January through April will be disappointed. In addition to assimilating the impact of the foreign buyers tax, the Toronto market has had to contend with two quarter-point mortgage interest rate hikes, and potentially more to come. There is also the looming threat of additional stress testing which the Office of the Superintendent of Financial Institutions has proposed.

All of these factors will have a moderating effect on the residential resale market going forward.
There were no surprises in the market data for the month of August. It was expected that as compared to last year the number of reported sales would be down, and that the average price from residential resale properties in the greater Toronto area would once again decline.

There were 6,357 properties reported sold in August, almost 35 percent fewer than the 9,748 properties reported sold last August. It should be remembered the sales reported last August were record breaking in a record breaking year. Last year 113,044 properties changed hands, by far more than any other year in Toronto real estate record keeping. The good news is that notwithstanding the size of the decline it was less dramatic than the months of June and July.

The average sale price came in at $732,292, 3 percent higher than the average sale price of $710,978 achieved in August last year. Although August’s average sale price for all properties sold in the greater Toronto area is substantially less than the record breaking average sale prices achieved in April of this year, it would appear that the decline in prices may have plateaued. Throughout the month weekly average sale prices were consistently around $730,000.

In the City of Toronto detached properties have seen the sharpest decline in sales volume and in average sale prices. Sales volume on a year-over-year basis is down by almost 35 percent. (It should be noted that in the 905 region sales volume is down by almost 42 percent). Average sale prices were off by just over 1 percent. This means that on a statistical basis detached homes have given up all the price gains achieved leading up to the month of April and the province’s announcement that it would implement a foreign buyer’s tax of 15 percent of the sale price of properties.

It is not clear if all price gains achieved by detached properties have been lost. There just simply is not enough data to make this definitive determination. In August 132 properties having a sale price of $2 Million or more were reported sold. Last August 233 properties in this category were reported sold. Almost all of these properties were detached homes. Clearly when fewer properties in the highest price categories are selling, the over-all average sale price will decline. It is not uncommon to see fewer high end sales in August. The key question is were there fewer sales because these properties were not selling, or was it due to sellers not putting these properties on the market, and if they did, continued to hold out for higher prices. September’s data will go a long way in answering that question.

Although it is taking longer for properties to sell, the pace of sales was still brisk in August. All sales took place in only 23 days. Last year all sales took place in 18 days. Even detached properties in Toronto’s central core, which sold for an average sale price of $2,113,130, all sold in only 26 days. Semi-detached properties continued to move briskly selling in just 20 days. In the case of semi-detached properties in Toronto’s east-end districts (Riverdale, Leslieville, Beaches) sales took place in only 13 days on average and for sale prices that exceeded the asking price on average by about 104 percent.

Although condominium apartments sales have slowed year-over-year, condominium apartments average sale prices have not. Last August the average sale price for condominium apartments in Toronto’s central districts was a mere $493,324. This August that same apartment will cost a buyer $600,781, an increase of almost 22 percent. In fact, the average sale price for condominium apartments increased throughout the entire City of Toronto by more than 20 percent in August. Sales on the other hand were down by about 25 percent.

The decline in condominium apartment sales in August is due to two factors. Rising prices have made some units inaccessible to a growing group of first-time buyers, while shrinking inventories have lessened the choice available to those buyers that can afford to purchase Toronto’s ever more expensive condominium apartments.

In August there were only 2,353 units available for sale. Last August there were 2,950, a decline of 21 percent. This is contrary to the overall market trend which sees listings of all properties up an eye-popping 65 percent compared to the same period last year.

Listing generally are beginning to decline. In August only 11,523 new properties became available for sale, a decline of almost 7 percent compared to the 12,346 properties that became available last year. If this trend continues and if sales pick up there will be a rebound in average sale prices, not to the absurd price increases that were taking place in April, but annualized increases of 5 to 7 percent which are healthy and sustainable.

September’s performance will be a crucial month in providing some guidance as to how quickly the market will begin to see an increase in activity and healthy increases in average sale prices. Now that two quarter point interest rate hikes have been factored into the market, it will simply be matter of seeing when buyers will take their finger off the pause button. The fundamentals in the Toronto and area market remain sound and are growing stronger. Employment is growing, high levels of immigration to the region continue, consumer confidence is strong, and notwithstanding two interest rate hikes, by historical standards rates continue to remain low. All these factors point to a real estate market that should be stronger than what we are currently experiencing.
It is safe to say that the lull in the Toronto and area residential resale market is not due exclusively to the summer doldrums, although the seasonal slowdown that happens every year in July and August is no doubt adding to the slow market.

In July, 5,921 residential properties were reported sold for the greater Toronto area. That is a far cry from the 9,929 properties reported sold for the same period in 2016, a decline of more than 40 percent. July was the second month in a row when year-over-year sales declined by more than 35 percent.

Average sale prices continue to be higher than the same period last year, but not by the staggering increases that we experienced earlier in the year. In July, the average sale price came in at $746,218, 5 percent higher than the average sale price of $710,471 achieved last year. The average sale price for the greater Toronto area is down dramatically from prices achieved at the beginning of this year. For example, the average sale price for all properties sold in April was $919,449. Since then the average sale price has decreased by almost $175,000 or more than 18 percent.

This unprecedented rapid decline in average sale prices has put tremendous pressure on lenders trying to determine current fair market value. As a result, buyers who purchased closer to April with closing dates in late June and July are having trouble funding their purchases as lenders reduce the amount they are prepared to loan based on the declining value of properties. Although this is a temporary and transitional period it is an unpleasant place to be if you are a seller who has bought and is having difficulty selling in the face of rapid declining average prices or a buyer whose financial institution is reassessing the amount of financing it is prepared to advance.

Buyers, who have hit the pause button, waiting to see how far prices will drop before they re-engage have more choice than they have enjoyed for a number of years. In July, 14,171 new listings came to market, 5.1 percent more than the 13,482 new properties that came to market last July. Added to the increase in inventory in May and June, at the end of July there were 18,751 properties available to buyers in the greater Toronto area, more than 65 percent than the paltry 11,346 properties available in July last year. Although the difference in the number of available properties this year compared to last is stunning, on a 12-month moving average at the end of July those 18,751 active listings still represented only 1.3 months of inventory. A balanced market is represented by 3 to 4 months of inventory. If the market picks up in the fall, as is expected, supply could once again become a problem.

Buyers are taking longer to make decisions about buying properties. In July, all properties sold (on average) in 21 days. Last year it only took 16 days for all properties to sell. Detached properties appear to be taking longer to sell than semi-detached and condominium apartments. In July, it took 22 days for detached homes to sell. Semidetached properties sold in only 19 days and condominium apartments sold in 20 days and only 19 days in Toronto’s central districts were most of the condominium apartment supply is located. The only explanation for this difference is price-point. Less expensive properties continue to sell quickly.

This is clearly the case with condominium apartments, where a supply problem is developing. In July, there were 2,710 condominium apartments for sale in the City of Toronto. Last year there were 3,307 apartments. We enter August with 29 percent fewer available condominium apartments for buyers to buy. There will be tremendous pressure on condominium apartment prices, as more buyers begin competing for an ever-shrinking inventory in the fall. It’s not surprising therefore that in Toronto all condominium apartments sold for 100 percent (on average) of their asking price in July.

The change in the residential resale market, and the speed with which it has changed, is very confusing. There has been no change in the economic fundamentals between mid-April and the end of July, yet the market is substantially down in average price and in volume. The provincial foreign buyer tax in itself cannot be responsible for this tectonic shift. By the government’s own admission, foreign buyers represented only about 5 percent of all sales. This is a classic example of the market changing because of psychology. But at the end of the day, the demand that was in the market in April is still there today, and at some point in time, perhaps when buyers perceive that the bottom has been reached, those buyers will be back in the market, perhaps not as exuberantly as before, but they will be there.
June’s residential resale market data is as bewildering as the data was in May. The attention-getting news is that sales were lower by 37.3 percent compared to sales achieved in June 2016. Last year 12,725 properties were reported sold. This June only 7,974.

Normally when sales are off by almost 40 percent other key market factors are also trending into negative territory. For example, the average days that properties are staying on the market, and the sale price to list price ratios. Ironically these aspects of the market are showing resilience. In June (on average) all properties reported sold spent only 15 days on the market. During June 2016, all properties were reported sold in only 15 days as well. It must be remembered that last year was a record breaking year for residential property sales in Toronto.

Not only did most properties sell quickly, but they sold on average for their asking price or more. Detached houses in the City of Toronto all sold for 100 percent of their asking price. In the eastern trading areas, they sold for 101 percent. Semi-detached property sales for the most part were even stronger coming in at 103 percent of their asking prices. Even condominium apartments sold for 101 percent of their asking price.

These two aspects of the market indicate that buyers are prepared to move quickly for the properties they want, and sellers are getting their asking prices or higher, and as indicated above, these sales are taking place at the same pace as they did during last year’s record-breaking market. As a footnote, it should be noted that with so many properties having been listed more than once in the last two months, it is hard to determine if days on market and sales-to-list ratios are reflecting accurately.

One other aspect of the market should be highlighted. That is the months of inventory. Over the past two months inventory levels in Toronto have increased dramatically. In May inventory levels were up almost 50 percent compared to the same period last year. During the month of June, 19,614 new properties came to market, almost 16 percent more than the 16,918 properties that came to market in 2016. However, notwithstanding these massive increases in inventory, at the end of June active listings only totaled 19,680. At 19,680 available properties for sale the months of inventory was still only 1.2 months based on a 12 month moving average.

Although the market stalled in May and in June, there is still insufficient inventory to meet demand, even with many buyers on the sidelines waiting to see how Toronto’s residential resale market will unfold.

Average sale prices continue to be higher than prices compared to last year. Detached houses in the City of Toronto sold for $1,386,524 a 10.1 percent increase. Semi-detached houses at $987,404 were similarly up by 8.1 percent. The most dramatic increase occurred in the resale price of condominium apartments. The average price in the City of Toronto came in at $552,619, a 23.2 percent higher than last year at this time.

In the central core of the city the average sale price for condominium apartments came in at $619,428, with all sales taking place in just 15 days and at 101 percent of the asking price.

Although prices are considerably higher than they were a year ago, they have come down dramatically from the highs of April. At the mid point of the month the average sale price for homes in the greater Toronto area was $949,470. That price has steadily drifted down since then. Over the past few weeks it appears to have stabilized around $775,000, which is still higher than the average sale price of $747,018 in June of 2016.

It is becoming increasingly clear that there are two types of buyers. Those that either of necessity or opportunity are taking advantage of the historically low mortgage interest rates and buying the properties they like, and those buyers that have hit the pause button on the assumption that prices might yet fall to lower levels. As indicated, it appears that price declines have stopped, but we will not be certain until we have at least 6 to 8 weeks more of average sale price information.

The pattern that is developing is similar to how the market unfolded after the B.C government implemented a foreign buyer tax. The market went into pause mode, with sales declining rapidly. A year later the Vancouver market is reporting record level sales and prices, with the government once again contemplating further measures it might implement to curb the market.
There have been a number of changes in the Toronto and area residential resale market in the last two months, and yet in many ways it continues to resemble the market that had politicians and economists expressing sustainability concerns in February and in March.

How is the market different?

It can be summed up in one word: supply. The number of properties in the market is substantially higher than it was just two months ago and as compared to the same time last year. At the end of May, there were 18,477 listings available to buyers. This compares with only 12,931 listings available in May 2016, a stunning 42.9 percent increase.

The available inventory spiked as a result of all the new listings that came to market. In May 25,837 new listings came to market. In May 2016 only 17,356 new properties became available for sale, an eye-popping increase of almost 49 percent. In considering the number of new listings that came to market, one must exercise caution. Properties that did not sell during the month were often “listed” on multiple occasions in an effort to find a list price that would attract buyers, especially those properties that were expecting multiple offers and failed to receive
them. So how real the new listings number is that has been reported is questionable.

It should also be noted that the bulk of the new inventory coming to market in May was in the 905 region of the greater Toronto area. For example: whereas the increase in inventory was up by 48.9 percent in the greater Toronto area, it was only 24.7 percent in the City of Toronto. More surprisingly, whereas active listings increased by 42.9 percent in the greater Toronto area, the increase in active listings in the City of Toronto was an insignificant 1.8 percent.

This disparity is probably due to the Province’s announcement that it will implement a foreign buyer’s tax of 15 percent of the purchase price of properties. There has been a high concentration of foreign buyers in the 905 region, particularly in Richmond Hill, Markham, and Vaughan. The threat of this tax may have caused sellers waiting for prices to continue rising to put their properties on the market in anticipation of the new foreign buyer’s tax.

How is the market still the same? Firstly, and notwithstanding the plethora of new listing that came to market, the months of inventory available to buyers was only 1.1 months. By any measure this is an inadequate supply, still favouring a seller’s market. By contrast, at the end of May 2016, which was a record breaking year, there were 1.6 months of inventory in the greater Toronto area and 1.9 months in the City of Toronto.

Secondly, properties continued to sell quickly. In fact, on average all properties sold in 11 days throughout the greater Toronto area, as compared to 15 days last year, a decline of almost 27 percent. In Toronto’s eastern trading areas the average days on market was only 10 days and even lower in the trading areas that encompass popular neighbourhoods such as Riverdale, Leslieville, and the Beaches.

Thirdly, properties not only sold quickly, but they continued to sell substantially above the list price. On average all properties in the greater Toronto area sold for 104 percent of their asking price. In the City of Toronto the salesto-list ratio was even higher, with all sales coming in at 106 percent of their asking price. In May 2016 all properties in the City of Toronto sold at 105 percent of the asking price. Not one trading district in the entire City of Toronto saw sales on average less than 105 percent of the list price, with some districts reporting sales-to-list ratios of more than 110 percent.

Fourthly, average sale prices continue to rise. In May the average sale price came in at $863,910, an increase of almost 15 percent compared to May, 2016. In the City of Toronto detached property sales came in at $1,503,868 a 6.6 percent increase compared to last year. Similarly semi-detached properties increased by 27 percent to $1,062,318 and condominium apartments continued their increase in value to $564,808, an increase of almost 28 percent compared to a year ago.

A notable change was the pace of sales. Last May there were 12,790 reported sales for the greater Toronto area, an all-time record month for sales. This year reported sales of properties came in at 10,196, a decline of 20 percent. May marks the second consecutive month in which sales have decreased on a year-over-year basis.

The consensus is that the change in the market place will persist for a few months, perhaps into the fall or later, as buyer and seller expectations adjust. But as the Vancouver market demonstrated in May, governmental measures to cool that market and to bring a measure of affordability have failed. The Vancouver market cooled dramatically after the B.C. government announced legislation to curtail it, namely a foreign buyer tax, like the one announced for Toronto and Southern Ontario. But in May the Vancouver market was once again breaking records with an average sale price of $1,830,956 for detached properties, up 5 percent from the same month last year and just surpassing the previous high of $1,826,541 achieved in January 2016.

Expect the same scenario to play out in the Toronto residential resale market over the remainder of 2017 and into 2018.
The Toronto and area marketplace behaved uncharacteristically in April. For the first time in many years the number of sales this month was fewer than the number of sales reported in the corresponding month the year before. In April there were 11,630 sales of residential properties in the greater Toronto area, a 3.2 percent decline compared to the 12,016 sales that were reported last year. The immediate question is – has the Toronto resale market changed?

A lot happened in April. The most important development was the provincial government’s announcement that it would be promulgating legislation to “help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market.” The most specific of these measures was the implementation of a 15 percent non-resident speculation tax on the price of homes in the Greater Golden Horseshoe area purchased by individuals who are not citizens or permanent residents of Canada or by foreign corporations, and the expansion of rent control to all private rental units in Ontario. Prior to the provincial announcement rental units in buildings built after 1991 were exempt. These two measures will take effect on April 21st and April 20th, respectively.

In April we also witnessed a dramatic increase in resale inventory. It was only a few months ago when inventory levels were 50 percent lower than they were a year ago. In just one month the negative variance was reversed. During the month, 21,630 new listings came to market, an increase of more than 33 percent compared to the 16,190 new properties that came to market in April 2016. At the end of the month there were 12,926 properties available to potential buyers, 3 percent more than the 12,554 available last year. It should be noted that even with the substantial number of new listings that came to market in April, supply levels are still historically low.

Notwithstanding the proposed “affordable” housing measures and the plethora of new listings that came to market, prices continued to rise, and sales continued to take place at lightning speed. In April, the average sale price for all property types in the greater Toronto area came in at $920,791, the highest average sale price on record, and almost 25 percent higher than the average sale price reported last year. In April 2016, the average sale price was only $739,762, interestingly, an all-time high record at that time.

The sales that took place did so at a record, blistering pace. All sales in the greater Toronto area took place in an unbelievable 9 days. Last year it took 15 days for all sales to take place which was a record for the month. Detached and semi-detached houses in the city of Toronto sold even faster. All detached properties sold in just 8 days. All semi-detached homes sold in 7 days. Even condominium apartments, historically selling slower than freehold properties, flew off the shelf in only 10 days.

Not only did all these property types, detached, semi-detached, and condominium apartments, sell at rapid speeds, but in every category, and at every price point, including the most expensive properties in Toronto’s central core, they sold for substantially more than their asking prices. There was not one housing type or trading area where the sale price was at or lower than the asking price. In many cases the average sales price exceeded the asking price by more than 120 percent.

Even though sales were slightly down (3.2 percent) year-over-year, the average sale price for every housing type was substantially higher. Detached properties in the city of Toronto came in at $1,578,542, up 25.2 percent. Semidetached properties came in at $1,104,047, up by 22.4 percent, and condominium apartments came in at $578,280, up by almost 33 percent. In Toronto’s central core detached properties sold on average for $2,200,000 and semidetached properties were not far off at $1,389,400.

So what does all this data, some of it conflicting, say about Toronto’s residential resale market? Clearly demand remains strong, and even though more properties came to market, inventory levels are still insufficient. If homeowners continue to bring properties to market at the pace and level that they did in April, supply levels might, for the first time in years, move towards a more balanced market. If that happens it will only be temporary. There simply isn’t enough supply to meet the growing demand in the greater Toronto area. With more than 100,000 net migration to the greater Toronto area annually, demand will remain high. Government legislation that was designed to curb urban sprawl has resulted in a sever shortage of low rise housing, forcing buyers into high rise condominiums at a pace that exceeds builders’ ability to deliver apartments to meet our housing needs.

The Ontario Fair Housing Plan measures, even if successful, are many years away from increasing the housing supply. The only economic change that will reduce demand is a substantial increase in mortgage interest rates. With the Canadian economy still struggling, that will not happen soon. And if it did, the newly expanded rent controls combined with the ongoing need for rental accommodation will be responsible for a rental housing crisis.

Consequently with perhaps a “wait-and-see” lull that the new measures announced by the provincial government
will create, we should anticipate that the Toronto and area market will remain robust, with average sale prices rising until they reach a point that simply renders them unsustainable. Until then, it is an arrogant and politically motivated government position, that it can deliver or control affordable housing. Toronto is not the only city in the world that no longer meets the long cherished, yet unrealistically arbitrary figure of 3 times gross household incomes as a reasonable benchmark for affordable housing prices.

A review of housing prices in other parts of the world makes it clear that there is no particular reason why housing must be affordable for the average person. Residential real estate in many cities is even more expensive than Toronto. Simply stated, Toronto has moved into the category of one of the best cities in the world in which to live.
March residential resale numbers were staggering, in every category. More than 12,077 homes changed hands in March, up almost 18 percent compared to the 10,260 that were reported sold last year. In comparing 2017 against 2016 it must be remembered that 2016 smashed all records for residential resales.

The most daunting statistic emerging for March’s data is the average sale price for all properties sold. The cost of the average home in Toronto in March came in at $916,567, an eye-popping 33.2 percent higher than what the same home would have cost a buyer in March 2016. In absolute numbers a buyer looking to buy the same home he considered buying last year would now have to pay an almost impossible $228,000 more for the same property. Not only would that fictitious buyer have to pay substantially more, he would have to act quickly because all of the 12,077 properties that were reported sold in March were on the market for only 10 days (on average). Staggering is the only word for these year-over-year numbers.

Prices were even higher for detached and semi-detached properties. A detached home in the City of Toronto will now cost a buyer $1,561,780. A semi-detached home is not far behind, coming in at $1,089,605. In Toronto’s central districts the numbers are substantially higher. The average sale price for a detached property was $2,450,955, while a semi-detached property in Toronto’s central districts came in at $1,410,702. The 105 properties that sold in this category of homes in March sold in only 7 unbelievable days. Even condominium apartments in the central core of Toronto are beginning to reach lofty heights. The average sale price for condominium apartment sales in March was $615,880. Only a year ago their average sale price was only $484,000. And like their free-hold counterparts condominium apartments in March sold in only 11 days and at 108 percent of their asking price.

The greater Toronto area’s definition of what constitutes a luxury property may, at this pace, have to be augmented. In March, 632 properties were reported sold having a sale price of $2 Million or more. Once again the comparison to 2016 of properties sold in this category is staggering. Last year there were only 228 properties in this category, and in 2015 a mere 132.

The debate that is now consuming politicians, economists and real estate experts is all about the causes of this supercharged Toronto housing market. The real estate industry is strongly of the view that the problem can be distilled to one word – supply! March’s inventory numbers support this position. At the end of March there were 7,865 properties available to consumers to buy. That’s more than 35 percent fewer properties than were available to buyers in 2016. Although 17,051 new listings came to market in March, an increase of 15 percent compared to last year, the greater Toronto’s inventory levels remain perilously low.

Economists see Toronto’s real estate problems as being created and driven by demand. The frenzied demand, as it has been characterized, is being driven by, and in no particular order, foreign investors, primarily Asian, speculators, and local demand by those buyers who believe that if they don’t get into the market today they may never be able
The question that economists, journalist, politicians and realtors are all asking is: What’s happening to the Toronto real estate market? What they are discovering is that there are no easy answers to this question. What’s prompting the question is the most recent residential resale data for the month of February.

In February, there were 8,014 reported property sales, a 5.7 percent increase compared to the 7,583 sales that took place last February. The positive variance is not large, but considering that 2016 was a record breaking year, substantially so, a positive variance speaks to the strength of the market in 2017.

Sales in and of themselves are not one of the major concerns related to the market. It’s the available inventory that’s the problem. At the beginning of March there were only 5,400 active listings. This compares very unfavourably to the 10,902 properties available for sale last year at this time.

Even at 10,902 that was an insufficient number of properties for sale in the robust market of early 2016. The decline in inventory year-over-year is more than 50 percent. And it is not going to get better. In February, only 9,834 new properties came to market, a decline of 12.5 percent compared to the 11,234 properties that became available for sale during February of last year.

What these numbers mean is that for the greater Toronto area there is only 1 month of inventory, and for the City of Toronto, 1.2 months of inventory. These are unprecedented low inventory levels. By comparison only a year ago, there were 1.7 and 2.1 months of inventory, respectively available to buyers. To put these numbers into perspective, a balanced market is one in which there are between 3 to 4 months of inventory.

It comes as no surprise therefore that all listed properties are selling at the speed of light and for prices never seen before in the greater Toronto area and the City of Toronto. All properties listed for sale in February (on average) sold in just 13 days. Last year, which I repeat was a record breaking year, it took 21 days for all properties in the greater Toronto area to sell, more than 38 percent faster than last year.

But what has captured everyone’s attention is the sale prices that are being obtained in the greater Toronto area and the City of Toronto. Overall, for the entire region, including the 416 and 905 geographical areas, the average sale price for all properties sold in February was $875,983. That number represents a stunning increase of almost 28 percent in only one year. Last February the average sale price was only $685,735. If you were a buyer who decided to postpone purchasing a house in 2016 and now are in the market, the house you could have bought last year will now cost you $190,000 more.

Prices are substantially higher in the City of Toronto. A detached property now costs $1,573,622, a 30 percent increase compared to last year. A typical semi-detached property for the first time now costs more than $1 Million ($1,085,484). In Toronto’s central districts the average sale price for a detached property is now an eye-popping $2,503,188. Unbelievably, last February the average sale price for detached properties in the central districts was only $1,869,749, an increase of $634,000 or 34 percent. In February there were 389 properties that were reported sold with a sale price of $2 Million or more. Last year there were only 187 sales in this price category and a mere 103 in 2015.

The one plentiful source of housing, namely condominium apartments, has all but disappeared. At the end of February there were only 1,301 active listings in the City of Toronto. In February 1,632 condominium apartment were reported sold. That’s 25 percent more sales than available listings. At that pace, you don’t have to be a mathematician to see the market wall that we are heading towards.

By comparison only a year ago, there were 3,432 active condominium listings, a year-over-year decline of an incredible 62 percent.
So what is happening to the Toronto residential resale market? There is no easy answer to this question. It is a combination of factors that have come together to create the perfect real estate storm – imperfect if you are a buyer.

In no particular order, the following factors have come together to create the market place we are experiencing. Interest rates remain historically low, as they have for many years. Currently a buyer can secure a five-year fixed mortgage with an interest rate of only 2.69 percent. The long period of low interest rates has generated an insatiable appetite for debt. At the current low rates, and they have been lower, if you are a buyer why not take on all the debt you can. It’s cheap money, particularly when inflation is running at about 2 percent.

Because of Toronto’s strong economic environment, to a large extent driven by the real estate industry, particularly new construction, approximately 100,000 immigrants have been making their way to the greater Toronto area annually. That means 30,000 new households, perhaps more, require new shelter annually. That number begins to compound over time.

Historically low interest rates and an increasing population have driven demand to unprecedented levels. This level of frenzied demand has in turn and over time diminished the available inventory. As indicated above, at the beginning of March there were only 5,400 active listings available to buyers in the entire greater Toronto area, which is very large geographical swath. By way of random comparison, in March 2002 when Toronto’s population was substantially less than it is today, there were 15,524 active listings. That was fifteen years ago. Ten years ago, there were even more available listings as a result for the economic upheavals the banking industry was experiencing.

Foreign buyers have also entered greater Toronto’s market place, although their impact is less a factor than some journalists and economists believe it is. A recent study by the Toronto Real Estate Board indicates the foreign buyers are involved in less than 6 percent of all resale transactions. Moreover, and unlike Vancouver, foreign buyers in the greater Toronto area are not simply parking their money in Toronto real estate, leaving properties empty for extended periods of time. In one form or another foreign buyers tend to be end-users.

There is no easy solution to the problem plaguing the Toronto market place. Greater supply would help, but the lead time to delivering new properties to the market is at least 2 to 3 years. In order to facilitate this solution governments at the municipal and provincial level will have to deregulate the existing legislation, and free up land for development. What we don’t need is government intervention in the form of higher taxes or taxes targeted at specific buyers. That might slow the market, but it won’t bring prices down and the broader impact on the economy would be disastrous.
The Toronto and area residential resale market picked up where 2016 ended. In fact it accelerated the pace of sales we witnessed in December. This is unusual behavior for the market in January, usually a slow month, as buyers and sellers kick out the holiday season cobwebs. But these are unusual times, very unusual times.

The shortage of available supply is causing buyers to hunt for properties for sale, even at the very beginning of the year. In January there were 5,188 reported sales, almost 12 percent higher than the 4,640 reported sales in January of 2016. January’s sales figures would have been higher if there were more active listings available to buyers. This is clearly demonstrated by the fact that in the City of Toronto there was a decline in the number of detached and semi-detached properties sold, while at the same time average sale prices increased by almost 27 percent for detached properties and more than 26 percent for semi-detached properties.

The other interesting piece of data that emerges from January’s results is the speed at which properties were listing for sale and then reported sold. In January all properties listed for sale (on average) sold in just 19 days. The number, when compared to January 2016, is startling. Last year it took 29 days for all properties to be reported sold, a speed-up in sales of almost 35 percent. It must not be forgotten that 2016 was a record breaking year in all categories, including days on market.

It is no surprise that with a listing shortage, fast sales, and a certain buying fervor that the average sale price for all homes sold in the greater Toronto area increased sharply in January. The average price for a home in the greater Toronto area was $770,745. That is not a record, but it was close. The record is $777,031 achieved in November of last year. Last January the average sale price was only $630,193, a dramatic increase of more than 22 percent. That increase included condominium apartment sales. Excluding condominium apartments the average price of a detached home is $1,336,640, and $902,688 for a semi-detached property, eye-popping increases of 26.8 and 26.4 percent from last year.

In Toronto’s central core the numbers are even higher. A detached house in the central core will now cost a buyer $2,324,593, with semi-detached properties now trading for $1,169,123, if you can find one. Only 33 semi-detached properties sold, again speaking to the shortage of supply, and they sold in only 13 days. Other trading areas in Toronto produced similar or even more shocking results. For example, all detached properties in Toronto’s Beach neighbourhood (there were only 6 of them) were placed on the market and reported sold in only 2 days! And at 114 percent of their asking price. These are unprecedented market performances.

The decline in the number of available condominium apartments for sale is also becoming troubling, especially since the bulk of all reported sales in Toronto in January were condominium apartments. In January the combined total of detached and semi-detached properties sold was a mere 584. By contrast there were 1,125 condominium apartment sales, an increase of almost 27 percent compared to last year. At the end of January there were only 1,387 active condominium apartment listings. Last year there were 3,231 condominium apartment listings, a shocking decline of 57 percent. We have reached the stage where there is just over one month of inventory of condominium apartments, and we are only in February. It appears that the last source of abundant housing, like detached and semi-detached properties, has dried up. It is not surprising that the average sale price of a condominium apartment jumped by more than 13 percent in January.

Inventory levels will dictate how the market unfolds for the remainder of 2017. At the beginning of February there were only 1.1 months of inventory in the greater Toronto area, and 1.3 months of inventory in the City of Toronto. The 1.3 months of inventory translates to only 2,230 properties available for sale. The market is far removed from a balanced market. We would need three times the current number of listings on the market to begin approaching a balanced market.

The market is clearly heading towards a state of paralysis. Sellers are holding off putting their properties on the market unless forced to, because there are few alternatives for them in the market place. The supply shortage continues to drive up prices - the average sale price in January was $770,000 - eventually taking them to unsustainable levels. Unless there is a change in the supply side, we could see the 2016 Vancouver pattern develop in the greater Toronto area.

Even without government intervention prices reached such exhibitant levels in Vancouver that by the middle of the 2016 sales began to decline. The decline was accelerated, of course, by the 15 percent foreign investor tax that was implemented in the fall. By year-end the average sale price of houses sold in the greater Vancouver area dropped by 6.6 percent compared to a year ago and sales tumbled by almost 40 percent. The average price for detached properties sold in the region tumbled to $1.5 Million last month, a 17.8 percent decline from the record high of $1.83 Million in January of 2016. The average price for a detached house in Toronto in January was $1,336,640, and $1,068,670 in the greater Toronto area.
Another record breaking year for the Toronto and area residential resale market. In 2016 113,133 properties were reported sold. This
number shattered the previous record of 101,213 properties sold in 2015. That makes two consecutive years in which Toronto and area
sales have exceeded 100,000. Prior to 2015 reported sales had not even come close to that number. The previous record was 93,193
properties sold. That was in 2007.

Although the most recent sales results seem remarkable, given Toronto’s population growth throughout the early years of this millennium,
they should have been anticipated. The Toronto and area population has been growing by about 100,000 new immigrants annually.
Households have been increasing by approximately 30,000 annually. Since 2007, when the then record of 93,193 sales was achieved,
at least 300,000 new households have been created in the greater Toronto area. These households need shelter, a place to live, either
as homeowners or as tenants. The supply of new housing in the greater Toronto area has not come close to meeting household needs.
Consequently almost everything that has become available for sale has sold, and as the supply dwindles, for higher and higher prices.

Even in December, which until the last few years has historically been a slow sales month, the resale data related to the market is startling.
For example: in December 526 detached properties were reported sold in Toronto, a decline of 7.6 percent compared to December
2015. The decline in semi-detached property sales is even more shocking. A decline of 11.5 percent, with only 138 properties reported
sold. However where the surprise and related concern arise, is in the inventory levels available to buyers in these two categories of
housing types moving to January 2017. In the case of detached properties only 488 active listings are available to buyers. In the case of
semi-detached properties only 77. In both instances the number of properties available to buyers is less than the number of sales that
occurred in December. Translated into months of inventory that would equate to 0.9 and 0.6 of inventory respectively.

The only housing type that showed a positive variance at year end was condominium apartments. Condominium apartment sales were
up by 19.5 percent in December on a year-over-year basis. But even in this category, there are troubling signs of inventory shortages
ahead. In December, in Toronto, 1,238 condominium apartments were reported sold. However, moving into January there are only 1,277
active listings for condominium apartments, or roughly one month of inventory.

Under these circumstances it is not surprising that average sale prices sky-rocketed in 2016. December’s average sale price came in
at $730,472 or 20 percent higher than the year-over-year average sale price of 608,714. Can you imagine the shock that one would
experience if they had lived abroad since 2014 and had returned to Toronto and were looking for a house or condominium apartment
to buy. That same fictitious house they could have bought in 2014 for $566,000 now costs $730,000, an increase of 29 percent, and
these numbers include condominium apartments.

In December the average price of a detached house was$1,286,605. The average price for a semi-detached house, if a buyer could
find one for sale, was $808,920. In Toronto’s central districts the numbers are even more dramatic. The average price for a detached
house came in at $2,058,876, while the average price for a semi-detached house broke the $1 million mark at $1,058,544, and this was
in December.

Overall 5,338 properties were reported sold in December. This number would have been much higher had inventory levels been higher,
a 8.6 percent increase compared to the 4,917 properties sold in December 2015. Across the greater Toronto area there are only 1.1
months of inventory, and in some of Toronto’s trading districts there are less than 1 month of inventory. For example two of Toronto’s
eastern districts comprising Riverdale, Leslieville and the Beaches have only 0.7 months of inventory heading in 2017. Overall, across
the greater Toronto area, we enter 2017 with 48.1 percent fewer active listings than we had last year. The actual numbers are eyepopping.
We enter 2017 with a paltry 4,746 active listings of all property types. To put this number in context it must be remembered
that there were 5,338 sales in December, 12 percent more sales than the total available inventory.

Based on the resale data available at the end of 2016, the beginning, and perhaps all of 2017, might be a different market than we
witnessed in 2015 and 2016. We may witness negative variance sales numbers as compared to past years. This would be the first time
this has occurred since 2008, when the equity markets imploded. The reason for this negative variance can be summed up in one word:
supply.

With the supply side of housing being so low, it is inconceivable that sales can outpace 2016, notwithstanding the demand. Unless a
plethora of new listings come to market in the early part of this year, and there is no current reason to believe that this will happen,
year-over-year sales will decline, even though prices will continue to increase. This may result, in time, in the market stabilizing to some
extent. Prices may reach levels that make affordability a problem which in turn may cause properties to remain on the market longer,
thereby increasing the supply. Over the longer term that might result in price stabilization.

But where are those 100,000 new immigrants locating to the greater Toronto area annually going to live?
The year is coming to an end, but there is no slowing down the Toronto resale market. The record for most sales in the greater
Toronto area in any year has already been shattered, and there is still the month of December. The 8,547 sales reported in
November took the total year-to-date sales to 107,840, breaking the previous annual record of 101,212 achieved only last
year. In all likelihood there should be about 5000 (or slightly more) sales in December. That will bring the year-end total to
approximately 113,000 reported residential resales, a truly remarkable feat. Ten years ago, there were only 83,084 reported
sales in the greater Toronto area.

This record speaks to the two prominent characteristics of the greater Toronto area market. Firstly, the deep seated desire for
home ownership, and secondly, the rapidly growing population of the area. With approximately 100,000 people immigrating
to the Toronto area annually it is very unlikely that much will change in 2017, subject of course to any dramatic increase in
mortgage interest rates.

Total annual sales was not the only new record set in November. The average sale price for all sales in the greater Toronto area
came in at $776,684. The previous monthly record was set in October at $762,525. It should be noted that monthly average
sale price records being set so late in the year is an anomaly. Historically the market reaches its monthly peak in May or June,
and thereafter average monthly sale prices begin to decline. For example in May of last year the average sale price came in
at $649,648. That was a record. No month following last May came close to eclipsing that record. A new record wasn’t set
until February of this year with an average sale price of $685,738. February’s record has been shattered six times since then,
the most recent record being achieved in November. Early data indicates that the Toronto and area marketplace might even
establish a new record in December, until recently an unthinkable occurrence.

A third record establish in November was the average days on market that it took properties to sell in the greater Toronto
area. It took only 17 days for all properties (on average) to sell. By comparison it took 26 days last year, an accelerated pace of
almost 35 percent. In the City of Toronto it took only 15 days for detached homes to sell, and only 11 days for semi-detached
properties to be snapped up by buyers.

The average sale price for detached properties in the City of Toronto is now $1,345,962, and for a semi-detached house you
must be prepared to pay $906,353. It must be unthinkable to be a buyer who for whatever reason was going to buy a year
ago and then did not proceed. That mythical buyer could have bought that same detached house for just over $1,000,000,
and that same semi-detached house for approximately $840,000 last year. The percentage change year-over-year is 32 and
20 percent respectively.

As has been set out in previous market reports, the only affordable housing options for buyers are condominium apartments,
but even this housing form is becoming pricey. In November the average sale price for condominium apartments in the
central core of the city, where most condominiums are located, came at $526,116. This represents a 13 per cent increase
compared to the average price last year. The volume of condominium apartment sales has also increased dramatically. Sales
were up by almost 28 percent compared to last year. What is becoming worrisome is the rapidly declining volume of available
listings of condominiums apartments. At month end in the City of Toronto there were only 2,002 condominium apartments
for sale. When one considers that there were 1,718 condominium apartment sales in the same month, you don’t need to
know any form of high mathematics to concluded that we will be out of stock of condominium apartments for sale if this
pace of sales continues and it no doubt will, considering that condominium apartments are still (comparatively) affordable.
It should be noted that at the other end of the condominium apartment spectrum, 14 condominium apartments sold in
November having a sale price that exceeded $2 Million.

The supply shortage is not restricted to condominium apartments, but is impacting the overall marketplace. In November the
total number of active listings available to buyers was almost 36 percent less than last year at this time. In actual numbers
this amounts to only 8,639 properties, or only 1.2 months of inventory. This will be a hot point affecting the residential resale
market in the early months of 2017.
In October the Federal Finance Minister implemented new “stress testing” for buyers looking for high ratio loans. A
buyer seeking a high ratio loan normally has less than 20 percent of the purchase of the property. The new “stress
testing” rules require borrowers to be qualified at banks’ posted rates, and not the discounted rates, the rate of interest
they will actually be paying.

The new lending restrictions came into effect on October 17th. The concern was that these lending restrictions would
freeze a large portion of first time buyers out of the market place. The resale data available to the real estate community
for the month of October indicates that there was no appreciable change in the activity of the residential resale market
after October 17th. There were 9,768 properties reported sold for the month. Almost 12 percent higher than the 8,759
properties reported sold in October 2015. Sales were about the same before and after October 17th.

The 9,768 reported sales brings the total sales for 2016 to 99,354. If the year had ended at the end of October it would
have been the second best year on record, only behind the 101,212 reported sales in 2015. With two months still to go,
it is safe to forecast that total sales for 2016 will come in at approximately 112,000 properties.

With sales continuing as briskly as ever, it is not surprising to find that a new average sale price record was established
in October. The average sale price for all properties sold in October in the greater Toronto area came in at $762,975.
This number surpassed the previous monthly record high of $756,080 achieved in September of this year. October’s
average sale price was 21 percent higher than the average sale price of $630,254 for October 2015. The average
sale price includes all property types, including condominium apartments which are substantially less expensive than
detached and semi-detached properties.

In October, the average price for a detached property in the City of Toronto came in at $1,303,339. In Toronto’s central
districts the average sale price for detached properties established a new high of $2,086,362. Semi-detached properties
were not far behind coming in at an average sale price of $902,137. In Toronto’s central districts a semi-detached
property will now cost a buyer $1,236,673. In both cases, detached and semi-detached properties are more than 20
percent higher than they were a year ago.
Rising sales coupled with rising prices normally means fewer days on market for listed properties. October was no
exception. All properties sold in just 16 days (on average), the same pace at which they sold in September, but almost
30 percent faster than properties were selling last year. Last year, which was a record breaking year, all properties took
22 days to sell. Needless to say for certain types of properties and neighbourhoods the pace of sales was, as surprising
as this is, even faster.

Detached properties in the City of Toronto sold in only 13 days. Semi-detached properties, if you could find one, sold
even faster at 11 days. East end semis sold in only 8 days, literally a breathtaking pace. Not only did detached and semidetached
properties sell at lightning speed, they consistently sold for substantially more than their asking price – 105
and 109 percent over the asking price, respectively.
The number of high end property sales (those properties having a sale price of $2 Million or more) grew dramatically
on a year-over-year basis. In October 2015 there were only 140 reported sales in this category. This October that
number increased to 325, an increase of 132 percent. The bulk of those sales were detached homes. There were 11
condominium apartments in this category of sales.

At the other end of the resale market, condominium apartments continue to be the only affordable option, particularly
for first time buyers. The average sale price for condominium apartments in the City of Toronto came in at $459,199,
a long way from the average sale price of detached ($1,303,339) and semi-detached ($902,137) homes. However,
condominium apartments prices were up almost 13 percent in October compared to last year, and sales volume was up
by 20 percent. The last affordable refuge for buyers is shrinking rapidly. The problem for first time home buyers is being
exasperated by the fact that at the end of October there were 43 percent fewer condominium apartments available for
sale compared to the same period last year.

Available supply is not a problem restricted to condominium apartments. The supply problem is universal. At the end
of October there was only 1.2 months of inventory in the greater Toronto area, and 1.5 months in the City of Toronto
– thank heavens for condominium apartments. In numbers, this translates into only 10,563 active listings, 35 percent
less than the 16,180 active listings that were available to buyers at the end of October 2015. This is pure and simple a
seller’s market. It will be interesting to see if the new federal stress test lending rules will have an impact on the supply
side of the market going forward.

November has historically been a slower month than October, so as we move into November I anticipate that sales will
slow, producing about 7,500 properties sold for the month, which is still consistent with the record breaking pace the
market has been on all year. The monthly average sale price is not expected to rise. It should come in at approximately
$750,000 as we see fewer high end sales heading into the holiday season.
As the month of September comes to an end, the two major concerns about Toronto and area’s resale market are
declining supply, to critical levels, and rapidly rising home prices. Both have been issues throughout 2016, but they
have now become hot points that are attracting the attention of government and potential government intervention.

As we enter October, the greater Toronto area had only 11,255 available properties for beleaguer buyers to find, inspect
and purchase. This is a startling 36.6 percent decline compared to the 17,765 resale properties on the market at this
time last year. Unfortunately, what has not waned over this same period is buyer demand. With about 100,000 people
making their way to the greater Toronto area every year there simply is not enough existing and new housing coming
to market to meet the need of Toronto’s growing population.

With the combination of low inventories and buyer demand (and don’t forget about the historically low mortgage
interest rates we are experiencing) the pressure on prices has been unprecedented. In September Toronto and area’s
average sale price came in at an all time monthly high of $755,755, exceeding the previous record of $752,278 achieved
in May of this year. What is even more significant is that this average sale price is 20.4 percent higher than the average
sale price for all property sales reported in September 2015. In only one year the house that you could have bought
for $627,867 last year will now cost you almost $130,000 more. Salaries have not increased by a comparative amount.

But $755,7555 is simply the average sale price. It includes all property types, including the less expensive condominium
apartments. In the City of Toronto, a detached property sold (on average) for $1,294,482 in September. Semi-detached
properties were not far behind coming in at $884,916. In Toronto’s central districts detached and semi-detached
properties are even more expensive. A detached property (on average) now costs $2,214,998. A year ago that property
could have been purchased for $1,688,581, an eye-popping difference of over $436,000. The average price for semidetached properties in Toronto ‘s central district came in at $1,181,647. Last year that same property was selling for
$956,480.

It is not surprising that under these circumstances that detached and semi-detached properties are selling at lightning
speed. Notwithstanding that detached properties throughout the City of Toronto were selling for almost $1,300,000,
they all sold in just 13 days. Even Toronto’s central districts, where detached homes were selling for over $2,000,000,
all detached properties sold in only 14 days after having been placed on the market.

In Toronto’s eastern districts detached and semi-detached properties sold even quicker, in 11 and 8 days respectively.
These are rates of sale never before witnessed in the Toronto resale market place.

Although condominium apartment sales are also increasing, sale prices are not increasing at the same pace as detached
and semi-detached properties. In September condominium apartments sales in the City of Toronto increased by almost
25 percent, a pace significantly higher than the overall increase of sales in September (21.5 percent). The average sale
price of condominium apartments increased by 6.5 percent over the same period, far less than detached (23 percent)
and semi-detached properties (19.7 percent).

The available stock of resale condominium apartments is dwindling quickly. As supply and prices of detached and
semi-detached properties climb out of reach of most buyers, the only alternative, short of moving to another city, is a
condominium apartment. The only problem is that their availability is shrinking even faster than that of detached and
semi-detached homes. Last September there were 6,659 condominium apartments for sale in the greater Toronto area. This September there were only 3,965, a 40 percent decline. In the City of Toronto there were 4,818 apartments
available to buyers in September 2015. This September the availability of condominium apartments is in free fall with
only 2,819 on the market, a decline of more than 41 percent in only one year. As a result, the average days on market for
condominium apartments dropped from 32 to 25 days in the greater Toronto area and from 31 to 24 days in the City of
Toronto. If a buyer is prepared to go to the eastern reaches of Toronto, there are still apartments for sale for less than
$250,000 and in some rare cases for less than $200,000.

At the other end of the market sales continued as brisk as ever. In September 297 properties having a sale price of $2
Million or more were reported sold. This compares with only 154 last year in this category, an increase of more than
90 percent. The bulk of this sales were detached homes. Ten of the reported $2 Million plus sales were condominium
apartments.

As we head into October the months of available inventory have shrunk to record lows. In the greater Toronto area
there are only 1.3 months of inventory. In the City of Toronto the number is higher at 1.6 months of inventory. Inventory
levels in Toronto are higher due to the number of available condominium apartments, though more plentiful than
detached and semi-detached properties, they are decreasing rapidly.

At the end of September the Federal Finance Minister announced a number of measures that would have the effect
of preventing Canadians from taking on more debt simply because mortgage rates are so low. Effective October 17,
borrowers requiring insured loans will be stress tested not on the discounted rate available but on the posted rates.
For a five year fixed term, the difference is slightly more than 2 percentage points. These new stress tests will only apply
to borrowers with less than 20 percent deposits and for properties that have a value of less than $1 Million. Effectively
the new mortgage guidelines will have their greatest impact on first time buyers. After October 17 they will either have
to buy less expensive properties requiring smaller loans, or drop out of the market.
As we enter the traditional fall market, the big story in Toronto is inventory shortage. At the end of August there were only 9,949 residential properties available to buyers, a number only slightly higher than the 9,813 properties reported sold in August. This is a historic low. For the past few years it was the historically low interest rates that were having the greatest effect on the re-sale market in the greater Toronto area. The inventory shortage has now been added to that mix. The information contained in this report is driven by these two factors: a lack of inventory and cheap borrowing.

In August there were 9,813 reported sales of residential properties. This represents an eye-opening increase of 23.5 percent compared to the 7,943 reported sales last year. There was a time when sales slowed in July and August, the traditional summer vacation months. That is obviously no longer the case.

The dramatic rise of monthly sales, especially in 2016, has reduced the available inventory of properties for sale to a mere 9,949 houses and condominium apartments. This represents almost a 38 percent decrease in the number of available properties compared to the end of August in 2015. Last August there were 15,997 properties available for sale, and even that number was insufficient to meet buyer demand.

With so few properties available to buyers it is not surprising that residential properties sold quickly in August, and for strong sale prices. In August the average sale price for all properties reported sold in the greater Toronto area came in at $710,410, almost 18 percent higher than last August’s average sale price of $603,534. It is not surprising that buyers are frantic to get into the market. In only one year the same property that was available last year will now cost a buyer $106,876 more than if he purchased the same property last August.

The speed at which sales are taking place is astounding. In August all properties (on average) sold in only 18 days, a 21.7 percent decrease from the 23 days it took last year. Even at 23 days the pace is lightning speed. At 18 days, in real estate terms, it is practically the speed of light. Some housing types and some neighbourhoods saw sales take place at an even faster pace.

All detached houses in the City of Toronto sold in only 16 days. All semi-detached properties sold in 13 days. In the greater Toronto area all semi detached properties sold in only 11 days. Not only did all residential properties sell quickly, but for the most part sold in excess of their asking price. All properties sold in the greater Toronto area sold for 105 percent of their asking price. All properties reported sold in the City of Toronto, which includes condominium apartments, sold for 106 percent of their asking price. These statistics have become common place for Toronto and the G.T.A. but would be viewed as unbelievable in any other jurisdiction.

Even condominium apartments sales are taking place at a furious rate. Multiple and even pre-emptive (“bully”) offers are becoming common place in the condominium apartment sector. Once in plentiful supply, the condominium apartment inventory is also shrinking. In August there were only 4,043 condominium apartments for sale in the greater Toronto area. In the City of Toronto there were only 2,850. The reduction in condominium inventory in only one year is shocking. Last year there were 6,420 condominium apartments available to buyers in the greater Toronto area, and 4,608 in the City of Toronto. In percentage terms, the decrease in available condominium apartments in the City of Toronto in only one year is almost 40 percent.

Although condominium apartments are not selling as quickly as freehold properties, they are selling very close to their list price, namely 99 percent, and higher in some sub-districts. Days on market for condominium apartments has also dramatically declined, now down to only 25 days in the City of Toronto. With these numbers in mind, it is not surprising to note that condominium apartment sales were up 33.5 percent compared to last year, a much higher percentage than detached and semi-detached properties. This is due to the fact that there are comparatively more condominium apartments for sale as compared to detached and semi-detached houses, and they are also comparatively
less expensive. In the City of Toronto, the average sale price for a detached house came in at $1,206,637, and if you could find a semi-detached house, at $774,700. By comparison the average price for a condominium apartment was only $446,612, and even less expensive in the 905 region.

At the other end of the housing scale, the number of high end property sales is also increasing, and dramatically. In August there were 233 properties reported sold that had a sale price of $2 Million or more. This represents a 111 percent increase over the 110 properties reported sold in this price category last year. Most of these properties were detached homes, although 10 condominium apartments also sold for $2 Million or more.

As we head into September with only 1.4 months of inventory in the greater Toronto area, and 1.7 months of inventory in the City of Toronto (thank heavens for condominium apartments), conditions will become even more severe for buyers. Buyers can anticipate continually rising prices, sales that take place at the speed of light, and competition for almost any property that becomes available for sale, particularly detached and semi-detached properties.
The Toronto residential resale market set a new record for sales in July. It appears that there are no more seasonal slowdowns. Almost 10,000 properties were reported sold in July, a month when historically both buyers and sellers took vacations and the number of sales dropped noticeably. Not this year. With 9,989 properties changing hands, Toronto and area realtors were responsible for the best result on record for the month of July. Last July 9,813 properties were reported sold, almost 2 percent fewer sales than this year.

The big story as we approach the half way mark of the summer is the depletion of inventory of available properties for sale in the greater Toronto area. Inventory levels in Toronto, including condominium apartments, have reached dangerously low levels. In July only 13,542 properties became available for sale. This compares to 14,625 properties that became available in July 2015. The combined impact of declining numbers of new properties coming to market and high sales volumes sees the greater Toronto area resale marketplace limping into August with only 11,346 active listings, fewer than the total numbers of sales reported for each of the months of April, May, and June. By comparison there were 16, 673 properties available for sale in July of 2015, an eye-popping 31.9 percent decline.

Last year there were 1.9 months of inventory in the greater Toronto area, and 2.2 months of inventory in the City of Toronto. By this July, the months of inventory were reduced to 1.4 and 1.8 months, respectively. There are trading districts where the months of inventory are even lower. For example in the eastern districts there were two trading areas where the months of inventory were less than one month, the second consecutive month in which this has happened. These districts are the popular Riverdale, Leslieville, and East York.

Without over stating it, if this trend continues there simply won’t be properties for buyers to buy. It comes as no surprise that under these conditions sales are taking place at lightening speed, and for prices that only a year ago would
have been seen as impossible to achieve. All sales in July for the greater Toronto area took place in only 15 days. There is probably no other market place in the world in which properties sell as quickly as Toronto, even in Vancouver. Last year it took 19 days, a decline of over 20 percent. There are some districts, particularly in the eastern trading districts, where sales took place even faster. In these districts detached homes sold in 10 days and semi-detached properties in only 8 days on average. These are sellers’ markets as never seen before, resulting in constantly increasing average sale prices.
In July the average sale price came in at $709,825, a 16.6 percent increase compared to the average sale price of $608,875 achieved in July last year. Once again almost every trading district (except two) produced average sales prices that exceeded the listing price, in some cases by more than 110 percent. List prices have become merely “suggested” prices, and have no connection to the sales price that sellers hope to achieve. With only 1.4 months of inventory, that is not surprising. A balanced market place, something we have not seen in Toronto since the 90’s (except for the short recession in 2008 to early 2009), is at least 3 months of inventory.

Condominium apartments, which were the Toronto market’s only plentiful source of housing inventory are also disappearing. In July there were 3,307 active condominium apartment listings. That number represents more than a 32 percent decline compared to the 4,924 active listings available to buyers last year. This lack of inventory of condominium apartments resulted in a 9.2 percent increase in sales and an 8.2 percent increase in the average sale price of condominium apartments in July. The average sale price for condominium apartments in the City of Toronto is now $427,074. In the city’s central districts, the average sale price for condominium apartments comes in higher at $472,622. Almost 70 percent of the city’s condominium apartments are concentrated in Toronto’s central districts.

On a year to date basis 70,098 properties changed hands in the greater Toronto area by the end of July. This compares with 64,110 properties sold to the end of July in 2015. At this pace by year end the market should produce about 109,000 property sales, smashing last year’s record of 101,212 sales.

Early indications in August point to another strong month. August sales are coming in at about 260 to 270 daily. Projected August sales should total about 8,700 properties sold. Last year 7,943 properties were reported sold in August.
June was, as have been all the months in 2016, exceptional. What we did not see however is a new monthly average sales price record, notwithstanding that June’s average sale price was almost 17 percent higher than the average sale price recorded last June.

June’s average sale price came in at $746,546, about $6,000 less than the record of $752,335, established this past May.
One should not read anything into this decline. It is quite normal to see prices decline as we approach the summer months and families start focusing on the end of the school term and the holidays that lie ahead. For example last June the average sale price dropped by about $10,000 compared to the previous month. Generally, the peak months for establishing record average sale prices are May and June, so the record average sale price established in May of this year ($752,335) will probably still be a record at year end.

And that is good news for buyers. Toronto and area’s average sale prices have been reaching dangerously high levels. This is dramatically illustrated when we consider that in January the average sale price for all properties sold was $630,193, and only six months later it is $746,546, almost a 20 percent increase.

In June we also witnessed, for the first time this year, a decline in sales from the previous month. In May there were 12,838 residential properties reported sold. In June that number fell marginally to 12,794. Again I wouldn’t read much into that decline. To some extent it is seasonal. As well it is due to the inventory shortage that has been causing so many buyers sleepless nights.

In June 16,980 properties came to market, a decline of almost 4 percent compared to the 17,659 that came to market in 2015. This decline compounded the active listing shortage. At the end of June there were only 12,327 residential properties available for buyers to view and purchase. That is more than 31 percent fewer properties available to buyers compared to last year. With only 12,327 properties on the market (17,972 in 2015) it is not surprising that those properties that did sell sold in record speed.

In June it took only 15 days for all properties (on average) to sell in the greater Toronto area. This is a torrid pace. Last year, which was a record breaking year, it took 19 days for all properties to sell. This number includes condominium apartments which do not move at the same pace as detached and semi-detached properties. The pace was even faster when we look at detached and semidetached sales in various City of Toronto trading areas. For example all detached properties sold in only 11 days, and semi-detached properties in only 8 days. Not only did they sell quickly they also sold for more than their asking price. Detached properties sold for 107 percent of their asking price, and semi-detached sold for 111 percent. It is clear that a property’s list price is only a starting point. This phenomenon is no doubt due to the inventory shortage we are experiencing, but is also being aggravated by agents listing properties
(knowingly and unknowingly) lower than they should.

It is noteworthy that the average sale price in Toronto’s central districts for detached properties came in at $2,072,978. A year ago the same house would only have cost a buyer $1,664,694. Semi-detached houses in Toronto are now (on average) selling for almost $1 Million ($912,724). In Toronto’s central districts a semi-detached house now sells for $1,186,443. These are not Vancouver prices, but they are becoming pricey.

Higher-priced properties are also selling in large quantities. In June 369 residential properties having a sale price of $2 Million or more were reported sold. Last June only 206 properties in this category were reported sold, an increase of almost 80 percent. It should be noted that Toronto is not Manhattan. Although there were many $2 Million plus sales in June, the sales activity for properties priced over $5 Million is considerably slower.

Condominium apartments continue to be an affordable alternative for most buyers. Although average sale prices are inching higher, they are considerably lower than detached and semi-detached properties. In June the average price for condominium apartment sales in the City of Toronto was $448,002, an increase of 6.9 percent compared to average sale prices last year. Although average sale price increases were moderate, the volume of condominium apartment sales was up by 15 percent. Condominium apartment sales now represent about 25 percent of all property sales in the greater Toronto area. That percentage is higher in the City of Toronto. In the central districts of Toronto, the average sale price for all condominium apartments sold in June was almost $500,000 ($494,578).

As indicated at the beginning of this report, the resale market, if it follows historical patterns, will “soften” during the second half of the year. This is what the market place needs, not only for affordability purposes, but to ensure that regulators and politicians do not create legislation to slow the pace of the market and rising prices. Generally, market intervention by government has had negative results – one cannot help by remember the 1974 Ontario Speculation Tax Act. It killed the market after it was introduced. It was repealed by 1978.
May 2016 was the best May in the history of the Toronto and area residential resale market. The market has evolved in such a way that every month new records are set. May was no exception.

The 12,870 reported sales were a record. That number eclipsed May 2015 sales by more than 10 percent. Last May there were 11,640 sales, which until this May, was an extremely strong number.

If the market is setting volume records, it follows that the market will be generating sale prices that are also setting new records. In May the average sale price for all properties reported sold in the greater Toronto area came in at $751,908, surpassing the previous record of $739,166 established the month before. May’s average sale price exceeds last May’s average sale price by almost 16 percent. In more concrete terms, the same house will cost a buyer $102,000 more in May than it would have cost only a year ago. In the City of Toronto, the average sale price was even higher, scoring another record at $782,051.

The central districts of Toronto are the most expensive place to buy a home. The average sale price for all central district properties came in at $904,632. This price also includes condominium apartments, which because of their volume, made this number more digestible. The average price for a detached property in the central district came in at $2,013,470, also a record. Semi-detached properties averaged $1,034,802, again a record.

Clearly money is pouring into higher priced properties. Although no systematic analysis has been conducted, brokerages are
anecdotally reporting more and more Asian investment in market areas that rarely saw foreign investors. In May 378 properties were reported sold having a sale price of $2 Million or more. This is an astounding 61 percent more than the 240 properties that sold in this category in May 2015.

There are, other than condominium apartments, few, if any neighbourhoods that are still reasonably priced. The least expensive trading area in Toronto is in the north west, bordering on Brampton. The average sale price in this district (known as W10) came in at $433,298, with 102 reported sales. The next least expensive neighbourhood is in the opposite end of the city, bordering on Pickering. The average sale price in this eastern reach of Scarborough came in at $500,866 on the strength of 97 sales. These two trading districts and their average sale prices clearly indicated that you have to search a long way from central Toronto to find less expensive priced properties.

In the City of Toronto a detached house now costs $1,285,693, another record. A semi-detached house, based on May sales figures, is now $834,883, if you can find one. All detached houses in Toronto sold (on average) after only 12 days on the market, even faster in the eastern districts. Semi-detached properties sold in only (gasp!) 9 days, and unbelievably even faster in very popular trading neighbourhoods.

The numbers of sales, coupled with how quickly they have been taking place, has reduced the greater Toronto resale market to 1.6 months of inventory. Inventory levels in the City of Toronto are slightly higher at 1.9 months due to the large number of condominium apartments that are available for sale. But even condominium apartment sales are now moving at a pace not seen before.

In May all condominium apartment sales in the City of Toronto took place in only 23 days, 15 percent faster than the pace at which they sold in May of 2015. It should be noted that in a balanced market sales take place in 60 to 90 days, regardless of the property type. The volume of condominium apartment sales is also growing, given that condominium apartments may be the only housing type that a large sector of buyers can afford. Of the 4,639 sales reported in the City of Toronto in May, 2137, or almost 50 percent, were condominium apartments. As in the case of detached and semi-detached properties, the average sale price for condominium apartments continues to rise. In May the average price for a condominium apartment was $442,520. In the central core, where most condominiums are located, the average price is higher, coming in at $494,100.

As we approach the summer months with the average sale price for a typical property in the greater Toronto area being more than $750,000, sustainability becomes a concern, notwithstanding an inventory shortage. At the beginning of June there were only 12,931 properties, including condominiums apartments, available for buyers to purchase. That number is more than 30 percent less than the 18,858 properties available for sale last year. It will be interesting to see if buyers will continue to compete for these properties, or if, as was described in a recent article on the Toronto and Vancouver real estate markets, we begin to experience “buyer gridlock”.
April’s market report could be a replica of March’s report. We continue to run out of superlatives in attempting to describe the Toronto area residential resale market. As they did in March, average sale prices continue to go up, days on market continue to decline, the inventory of available properties is evaporating, and buyer demand cannot be satisfied. Records in almost all categories are being broken monthly.

In April the average sale price for all properties sold in the greater Toronto area came in at a breath-taking $739,082, a new monthly record. That’s 16.2 percent higher than the $639,064 that the same house would have sold for in April 2015. Semidetached and detached houses are substantially more expensive. The average price for a semi-detached house in the city of Toronto in April was $901,159, 23.8 percent more than a similar property would have sold for in 2015. A detached house will now cost a buyer $1,257,958, 18.9 percent higher than a similar property sold last April. In central Toronto the numbers are even higher. A detached house now costs $1,730,000, and buyers must now pay almost $1 Million for a semi-detached house. A semidetached house in Toronto’s central core now costs $975,640. These are all new record highs.

Surprisingly, given the high prices that properties in Toronto are selling for, they are also selling in record time. All properties that sold in the greater Toronto area did so in only 15 days. That is a number that in almost any other jurisdiction throughout the world would be regarded as incomprehensible. Not in Toronto. Semi-detached properties sold even faster. All semi-detached properties were reported sold in only 10 days. In central Toronto it took only 9 days for semi-detached properties to sell and although it may sound unbelievable, all semi-detached properties in the eastern districts sold in only 7 days. Detached houses sold just as quickly. Only 12 days on market for all detached properties sold in Toronto. All of these numbers are new records for sales in the Toronto resale market place.

List prices for properties in Toronto are apparently no longer relevant. They are merely a starting point. All detached properties reported sold in Toronto sold for 107 percent of their asking price. In some trading districts the sale price to list ratio was as high as 117 percent. Semi-detached properties in Toronto sold for 110 percent of their list prices. In Toronto’s eastern districts they sold for 113 percent of their asking price. Again, all these numbers are new record highs.
A drought in inventory is having a direct impact on sales. At the end of April there were only 12,554 properties available for sale in the entire greater Toronto area. This is almost 27 percent fewer properties for sale than there were last year at this time. This is only 1.6 months of inventory. A balanced market is approximately 4 months of inventory. It’s not an easy market for buyers.

The only available, accessible shelter for buyers is condominium apartments, and even that market sector is becoming tighter. In the city of Toronto condominium apartment sales increased by 17.4 percent compared to April 2015. The average price for condominium apartments has increased throughout 2016. In Toronto’s central districts the average price for condominium apartment increased to $484,482. It is interesting to note that the average days on market for condominium apartment, is also dropping. In April average days on market for condominium apartments was only 25, a dramatic decline from the 35 plus days on market only a year ago.

Luxury property sales increased dramatically in April. In April 353 properties having a sale price of $2 Million or more were
reported sold by Toronto area realtors. That is an 81 percent increase compared to the 195 properties reported sold in this
category in 2015. In early May Christie’s International Real Estate, Chestnut Park’s exclusive Toronto area and Muskoka affiliate, produced an international luxury market study. It reported that Toronto was the second hottest luxury market place in the world, behind only Auckland, New Zealand, but well ahead of cities like Paris, London, New York and even Hong Kong. Not only was Toronto the second hottest luxury market in the world, but the fastest selling. All luxury properties in Toronto sold in only 28 days in 2015, substantially faster than any other luxury market place in the world.

Overall 12,085 properties were reported sold for the greater Toronto area market place. This was a new record for sales, and not surprising that it was 7.4 percent higher than the 11,254 properties reported sold last year. On a year-to-date basis, 34,623 properties have been reported sold. This is a 13 percent increase compared to the 30,752 properties reported sold in the first third of 2015. At this rate the Toronto area market place will deliver approximately 115,000 residential resales by year end. Another record. Stay tuned.
We are running out of superlatives in describing the Toronto and area residential resale market place. Literally it is going to places where no market has gone before. Average sale prices, days on market, inventory and demand have reached levels that are unique and perhaps a little unnerving.

In March the average sale price for all properties sold in the greater Toronto area came in at $688,181, marching ahead of the previous monthly record of $685,809, achieved only in February. Last March the average sale price was $613,815. This means that year over year house prices in Toronto have increased by more than 12 percent.

In the city of Toronto (416 districts) prices of detached and semi-detached properties have risen even more dramatically. The average price for a detached home in Toronto now sits at $1,174,358. In central Toronto the average sale price for a detached home came in at an eye-popping $1,863,704. What is even more startling is that all sales of detached homes in central Toronto took place in only 14 days (on average) and at 104 percent of their asking price. The numbers were lower in Toronto’s west ($938,678) and east ($808,988) trading areas, but these properties also sold at lighting speed, and for substantially more than their asking price.

The story was the same for semi-detached homes. The average price for a semi-detached home in Toronto is now $817,611. In Toronto’s central districts for the first time you now have to pay over $1 Million for a semi-detached house – if you can find one to buy. All semi-detached properties in Toronto’s central district sold in an unbelievable 11 days and at 107 percent of their asking price. Some trading areas in Toronto’s central market reported no sales in March. The reason was simply no semi-detached properties were available for sale at the end of March. A stunningly low level of inventory. It is not surprising therefore that the Toronto and area high end market has also reached astronomical levels. In March 228 properties were reported sold having a sale price of $2 Million or more. This compares to only 132 properties sold in the same category last year, an increase of more than 72 percent. The 228 sales in this category were primarily detached homes, with 3 condominium apartments also sold in this price point.

Overall the market produced 10,326 sales, an increase of 16.2 percent compared to the 8,887 sales achieved in March 2015.Clearly sales were not a problem. What was, and is a problem, is the small number of listed properties available for buyers to purchase.

In March only 14,864 new properties came to market. This was almost 4 percent less than the 15,435 that came to market in 2015. By the end of March the level of available inventory was woefully low. In the entire greater Toronto area there were only 12,132 properties available for sale, more than 20 percent less than last year at this time. This represents only 1.7 months of inventory. In various trading areas and depending on housing type, inventory levels are even lower. For example, inventory levels for the combined eastern trading districts are only 1.3 months, with one district having less than 1 month of inventory, also a market first. With these historically low inventory levels it is not surprising that properties are “flying off the shelves”. In March the average days on market for all properties sold was only 16 days. In 2015, which was a record year for the Toronto market place for volume of properties sold, days on market was 20 days.

The only area of the market operating differently is the condominium apartment sector, but even activity in this market sector has also sharply increased. The average price for condominium apartments came in at $416,251. In Toronto’s central districts, which have the highest concentration of condominium apartments, the price came in at $484,000. In March the average price for condominium apartments rose by 4.3 percent. Volume, on the other hand, rose by more than 20 percent. Average days on market dropped to 25, well below where it was only a few months ago, however average sale prices rarely exceed the asking price, but like detached and semi-detached sales we are beginning to see it happen.

One wonders if this market can continue at this pace. The same concern was expressed about the Vancouver resale market, but it has surpassed the wildest expectations of real estate pundits. These same pundits are now clamouring for constraint, even suggesting legislatives intervention to slow that market. In Toronto we have not reached those levels, but what was only recently thought to be implausible is happening. Stay tuned for April’s market report.
January’s exceptional start paled in comparison to February’s results. February set a new high water mark for sale prices in Toronto. This speaks to the power of the Toronto resale market. In the past when records for average sale prices have been set its usually in the months of April and May, the months that are most active. This year it occurred in February.

In February the Toronto and area resale market reported an average sale price of $685,278, the highest ever recorded. The previous record was achieved in May of last year, with an average sale price of $649,648. The average sale price in the City of Toronto (the 416 districts) came in at $719,843. This average sale price is particularly startling in that it includes condominium apartment sales, which form the bulk of the sales in the City of Toronto. The average sale price achieved in February exceeded last February’s average sale price of $596,320 by almost 15 percent.

It is not surprising that the number of sales achieved in February was also a record. There were 7,621 sales reported, the highest number of sales ever produced by Toronto area realtors in any February. Last year there were only 6,294, an increase of more than 21 percent. This is an unprecedented increase for the month of February. The increase in sales was across all housing types.

In the City of Toronto detached property sales increased by almost 12 percent. Semi-detached property sales increased by almost 22 percent. But the biggest increase in sales was in condominium apartments. In February condominium apartment sales increased by more than 25 percent compared to February 2015. Given the steep increase in prices in Toronto, condominium apartments are the last resort for many buyers, especially first time buyers.

Prices for detached and semi-detached properties have increased dramatically in the last few months, once again breaking records in February. The price of the average detached house in Toronto is now $1,211,459. The price for semi-detached properties is not far behind at $848,835. Condominium apartments look very attractive at only $435,579. In Toronto’s central districts, where many of the city’s condominium apartments are located, the average sale price is $488,518.

In February all sales took place in only 21 days (on average), and much faster in some of Toronto’s trading districts and for
detached and semi-detached properties. If you were fast enough to find one and offer on it, in most cases buyers found
themselves in competition. Last year, which was a record breaking year for sales, it took 23 days for all properties to be marketed and sold.

Of special note are Toronto’s luxury sales. These are properties that had a sale price of $2 Million or more. In February 187
properties in this category were reported sold. This represents an incredible 82 percent increase compared to the 103 $2 Million plus properties sold in February 2015. Most of these sales were detached properties, however there were 5 condominium apartments that were sold in this category.

The focus as we head into March is Toronto’s inventory of properties available for sale. At the beginning of March there were only 10,902 active listings in the entire greater Toronto area. This compares with 12,793 in 2015, a decline of almost 15 percent. In the City of Toronto there were only 5,070 available properties, including 3,432 condominium apartments. In the greater Toronto area there are only 1.7 months of inventory. In January there were 1.8 months of inventory. February’s inventory levels are the lowest that have been seen since the Toronto Real Estate Board began providing months of inventory data. We are a long way from a balanced market. That would require 3 to 4 months of inventory.

Looking forward we should expect more of what we experienced in February. It is unlikely that inventory levels will improve. Coupled with today’s historically low mortgage interest rates, there will be a mad scramble for properties becoming available for sale, which in turn will cause Toronto’s already high average sale prices to break new records.
The new year started strong, producing 4,672 residential resales, an increase of more than 8 percent compared to the 4,318 sales the market produced during January 2015. The big story early in the year is not sales, but the lack of inventory.

In January only 8,957 new properties became available for sale in the greater Toronto area. This compares poorly against the 9,547 new listings in January 2015, a decline of over 6 percent. The number of new listings combined with the properties that sold in January means that at the beginning of February there were only 9,966 properties available for buyers to purchase.

This is a decline of almost 15 percent compared to the 11,600 properties available last year and an even bigger decline than 11,903 properties available for sale in February 2014.

These numbers are exceptionally low. They translate into only 1.8 months of inventory in the greater Toronto area and 2.1
months in the city of Toronto. The difference is due to the larger supply of condominium apartments available for sale in the city, predominately in the central core. In early 2015 there was 2.2 months of inventory in the greater Toronto area and 2.4 months in the city of Toronto. These numbers favor sellers but create a troublesome imbalance in the market place. In some trading areas the lack of inventory has reached serious levels of concern. For example in the trading area that encompasses the Riverdale and Leslieville neighbourhoods, there are only 1.1 months of inventory, a record low.

The problem with these low inventory levels, aside from the fact that they leave buyers frustrated and prevent first time
buyers from becoming homeowners, they are placing incredible upward pressure on sale prices.
In January the average sale price for the Toronto area came in at $ 631,092, more than 14 percent higher compared to January 2015’s average sale price of only $ 552,929. In the city of Toronto the number is even higher, and the average sale price in the central core, including all condominium apartment sales which took place in January, is now $ 731,243. If inventory levels stay low the continued pressure on prices will put sustainability in question.

Activity was not restricted to the lower priced properties in January. For example, 88 properties having a sale price in excess of $2 million sold in January. This compares with only 44 such sales during the same period last year, an increase of 100 percent. The tight market conditions have driven the average sale price for a detached home in Toronto to $1,061,789 and a semidetached home to $ 713,972. The problem with semi-detached homes is that there are hardly any available to buyers. There were 10 trading districts in Toronto that had no semi- detached properties listed for sale in January.

In the city of Toronto the only abundant source of available inventory is condominium apartments. In January there were
3,231 active condominium apartments listings. This supply represents almost 70 percent of the total available inventory of
residential properties listed for sale in Toronto. It is not surprising that buyers are turning to condominium apartments as their only housing choice. In January condominium apartment sales were up by 11.6 per cent compared to last year. Prices jumped by 8.6 percent. In January the average sale price for a condominium apartment was $416,104. In Toronto’s central core the average sale price was $ 469,723.

It will be interesting to see what happens in February. It is unlikely that tight inventory levels will improve, which means the
pressure on prices will continue. The turmoil in equity markets may have an impact on sales, particularly the upper end,
where choice rather than necessity plays a role in buying and selling decisions. Lastly on February 15th the new lending rules come into effect. After that date high ratio buyers will have to come up with 10 percent downpayments on loans that exceed $500,000. They can still make 5 percent downpayments on the first $ 500,000 of the loan amount. It is not anticipated that this change will have a negative impact on the greater Toronto resale market place.