December 2014 Market/Year End Review
As expected, December 2014 turned out to be a relatively busy month in the Toronto real estate market. The 4,446 transactions reported by TREB represents a 9.6% increase in sales volume over December 2013 – no mean feat in the face of 10.4% fewer available listings. That activity drove prices up 7% over the previous December, pushing the average sale price for the month to $556,602 (over $520,189 last year).
For the year 2014 TREB reported 92,867 sales, up 6.7% over 2013, but not quite enough to top 2007 – basically, just as I talked about last month. The average price in Toronto increase by 8.4%, to $566,726. (Note that the annual average is slightly higher than the monthly average for December. That type of small difference is not uncommon for the slower months. The months with the highest average prices in 2014 were May and October, which is fairly typical of the real estate market cycle.)
Regular readers will know that I have been tracking condo sales over the past year or so. In keeping with a fairly consistent pattern, condo sales in the 416 were up 16.1% over the previous December. The average price hit $387,612, up 5.4%. Despite lots of construction, there is no ‘glut’, and there has been no ‘crash’ – nor will there be. Condos represent a great starter home, and/or investment holding. That market ain’t going anywhere. (TREB will publish its quarterly Condo report soon, so I’ll add some details then.)
In terms of 2015, there are already loads of predictions out there. Naturally, most media outlets are (as usual) predicting something bad, but (as usual) I disagree with them. The Toronto real estate market is strong and stable – no matter what happens in Calgary or Vancouver – and will probably stay that way for some years to come. However, anything is possible, and this year has quite a number of interesting variables: the drop in oil prices (good news for most of us); the improving US economy (more good news); and possible movement in Canadian interest rates.
On that last note, it looks like rates will stay close to current levels through much of 2015, with possible smallish increases in the latter half of the year. It has been a good run of super-low rates, and that can’t last forever. However, rates will likely edge up in small increments over the span of a year or two. They won’t be jacked up suddenly; inflation is too low to warrant that. Of course, something could happen to stall or accelerate the increases, but at this point it’s reasonable to expect some kind of movement later this year, kicking of a period of increasing rates. Now would be a good time to look at your mortgage renewal, and/or get a pre-approval for your next purchase. (Get in touch with me if you need help with that.)
All in all, I expect that 2015 will be another busy year in Toronto real estate. Prices will continue to rise due to pressure from buyers. Sellers – who still have to present a fair product to the market, at a fair price – will stay in the driver’s seat. Whatever your move will be this year, I’d be happy to help you. Call or email me any time.[contact-form-7 404 "Not Found"]