Capybabies, listing stats, duck ponds, speculation taxes...oh my!
Here is my latest Toronto Real Estate Market Update, covering statistics from March 2017.
Today I'm standing in High Park, the majestic greenspace that anchors the west Toronto neighbourhood by the same name. With spring finally here, new listings across the Toronto Real Estate Board have been multiplying like the capybaras here in the High Park Zoo. However, there’s more to this story…
Hi, I'm Rebecca Laing, Toronto Real Estate Broker. Welcome to my Real Estate market update for this past month of March. A prominent headline in the news this month is that listings were up 15.2% over last year. As I mentioned in my previous market update, my focus is on what’s happening in the actual city of Toronto, and not the entire Toronto Real Estate Board. So if we look at actual City of Toronto, we find that new listings were up by only 3.8%, which is not nearly enough to keep up with the accumulating demand. If we focus even more locally on TREB District W01, which includes High Park and surrounding neighbourhoods, new listings were actually flat this year compared to last year.
A thunderstorm swept through, so we have relocated to the duck pond. With demand so high, and supply so low, does this mean that the average selling prices are up like 1000% everywhere? No, not exactly. In W01 the average selling prices were up less than 5% compared to 33% across the GTA. Why such a difference? Well, while some Toronto neighbourhoods are experiencing vastly different rates of appreciation, in this case, the numbers were skewed by fewer magazine-quality detached homes being sold this year versus last. If we were comparing apples to apples you would see sizeable increases, but it takes some digging and first-hand knowledge of this market to reconcile the higher level stats with what’s really happening on a hyper local basis.
Looking beyond High Park, here are some key numbers for the entire city. The average sale price for detached homes this March was $1,561,780, which is a 32.8% increase over last year. The average sale price for semi- detached homes was $1,089,605, up 33.3% over last year. The average for condo townhouses was $661,473 up 22% over last year. Condo apartments were at an average of $550,299 which is a gain of 32%.
Spring is typically the time of year when the number of new listings dramatically increases creating more options for the many buyers who have become incredibly frustrated in recent months. We may also see signs of government action in an attempt to cool the market. The most talked about remedies are a foreign buyer tax, a vacancy tax, and the fast-tracking of development, even into the greenbelt. Unfortunately, it is not likely that any of these remedies will offer a short term solution. Since implementation of the foreign buyer tax in Vancouver, prices have continued to increase, and while the number of sales lagged for a while even those are on the rise again now. A vacancy tax may help to bring more unoccupied and Air BnB condos to the resale and rental markets, however, such a tax would take time a long time to implement, is difficult to police and would do little to help the supply of houses. As for accelerating development, this too is a long term solution that will take years before impacting the supply of available homes.
So, what is the answer? There isn’t anything obvious, and the best solution may in fact be to allow market forces to play out. The current rate of price increase is unsustainable, as Torontonians do not have the income to keep up. However, if the government feels compelled to take short-term action, they could look at what has helped in Hong Kong. In Honk Kong, a short-term speculation tax has quelled some of the demand which is least beneficial to the economy. Speculation pushes up prices while interfering with the actual need for rooves over peoples’ heads.
Whether the government takes action or not, I do not foresee a drastic shift in the market in the short term. So if you are thinking of selling, now is certainly still a great time. And if you have been putting off buying, I would be happy to sit down with you for a consultation to discuss strategies for buying smart in this market. You can call or text me at 416-357-1059, or connect with me through rebeccalaing.ca. Thank you for watching, and have a great month of April. Until next time, I'm Rebecca Laing, Toronto Real Estate Broker.