January marked a tremendous start to the 2017 Toronto real estate market. Sales volume was up 11.8% over January 2016 – which had been up 8.2% over 2015. New listings last month were down 17.6%, to 7,338, while the total number of available listings dropped 49.5%, to just 5,034 by the end of the month. That made for some intense sales pressure. Accordingly, the average selling price was up 22.3%, to $770,745 (for all housing types). That’s on top of the 14.1% price increase recorded last January. Even TREB’s HPI, which tries to smooth out the average by taking into account differences among housing types, increased 21.8%. Last January, that number was up a more moderate 10.7%.
The number of properties on the market last month was less than half what it was just two years ago: in January 2016 TREB reported 9,966 available listings; in 2015 it was 11,600. The bottom line is that the Toronto market continues to be defined by the scarcity of listings. All this while the population continued to grow….
It’s no wonder that the once-maligned condo market has firmed up – it’s doing its best to take up the slack. Condo sales in the 416 surged 26.8% last month (after increasing 11.6% last January), driving the average selling price to $471,409, up by 13.1% year-over-year (up 8.6% last January). Condos (if you can get one…) remain a good purchase, for occupying and/or as an investment.*
Although this example isn’t necessarily typical, it illustrates how dramatic the competition is currently: a house in Scarborough that sold in December and closed in January, just resold (just a couple of weeks later) for $150k more. That’s nuts. With so few houses on the market, the usual battle over homes has intensified, but I’d like to think that things will calm down a bit as the spring market generates more listings. Although we typically see more buyers at this time of year, the current – apparently desperate – mood may subside. One can hope, anyway….
Still, if you have a house to sell, let’s get it on the market ASAP!
*If your primary residence has significantly increased in value since you bought, and you have no intention of moving any time soon, you might want to consider drawing on some of that capital to buy an investment property that will both increase in value, and generate income down the road.