The Toronto Real Estate Board reported on the October 2014 market stats today. Sales volume was up over October 2013 by 7.7%, to 8,552 transactions. New listings were up only 3.4% over the same period, continuing the now long-standing issue of insufficient supply in the Toronto real estate market. Tight supply (along with an improving economy, decent job growth and an ever-increasing population) drove the average price up by 8.9% over October 2013.
That’s a significant number – higher than income growth (about 3% this year) plus inflation (about 2% year-over-year). It’s great for home owners: you are seeing real capital appreciation; not so great for buyers, for whom it’s getting a bit harder to keep up.
That said, averages are not the whole story. If you want to get into the market, but can’t afford a $650,000 semi near the subway, there’s no need to fret. Although there aren’t really any ‘cheap’ parts of Toronto, one can certainly find decent value in various areas around town. Everybody has to start somewhere, so buying a smaller house, or one somewhere outside your favourite neighbourhood, is perfectly reasonable.
Alternatively, the condo market continues to show strength (sales volume up 8.2%, average price up just 1.5% after a 9.2% increase last month), making that segment a good option, too.
If you’re not into the condo lifestyle, look for an income property! Those are also in high demand, but if you are willing to take on the responsibility, they offer a great way to afford the Toronto market. (Note that there are requirements, demands and liabilities associated with income properties, so we’d have to have an in-depth conversation about it. That said, I’m a big fan, and encourage you to think about it!)
November seems to be off to a busy start – lots of sales have been reported over the last few days. If you are hoping to sell in 2014, there’s still time; and, if you are a buyer, we’ll see quite a few more opportunities before things slow down in mid-December. Either way, call me today and we’ll get to work!