December 2013 Market Review/Year End
According to recently released TREB stats, there were 14% more residential re-sales in Toronto in December 2013 (4,078) than there were in December 2012 (3,582), while the number of new listings added to the MLS for the month was down 4% (4,102 compared to 4,267). Those factors again resulted in higher prices, which were up 8.9% December-over-December.
Looking at 2013 as a whole, there were 87,111 MLS sales, up about 2% over the 85,496 reported in 2012. The average price increase was 5.2% (reflecting intra-annual ebbs and flows in the market, i.e. the market does not increase steadily from month to month). That’s above inflation, indicating a capital gain, but not far beyond average wage increases, which were in the range of 3% for the year. Of course, there are costs associated with home ownership, but all in all real estate in Toronto was a good investment for the umpteenth time.
Since I have been keeping a close eye on the condo market, I’ll point out that December sales were up 20.7% in the 416 (27.8% in the 905), with prices up a solid 7.6%. There still seems to be a fair bit of inventory on the market, but things are on much more solid footing than they were a year ago.
The year 2013 ended in a sellers’ market, and 2014 is beginning in the same manner. Buyers have to be prepared for either competition with other buyers, or a long search (while patiently awaiting for an opportunity to negotiate with a seller)… or both. With the US economy FINALLY showing signs of picking up, we’ll see an improving economy in Canada, too. That’s good for everybody, of course, and it should take the wind out of the real estate doomsayers (I hope).
I don’t see a resolution of the major issue of low supply of houses for sale any time soon, so prices will likely continue to rise. As long as they stay close to last year’s average increase, we’ll see sustained affordability. All in all, unless something unforeseen happens (alien invasion?), the Toronto real estate market is going to keep doing what it has been doing for most of the last 15 years: rise steadily, but remain affordable for most qualified buyers.