Despite yet another growing wave of media fear-mongering about the Toronto real estate market, January was yet another strong month both for volume and prices. The number of sales was up 6.1% over January 2014, to 4,355 transactions; that strong activity helped drive the average sale price up 4.9%, to $552,575.
The more interesting news was that the number of new listings was up by 9.1%, to 9,596 (from 8,762 in the same month last year). At the same time, the total number of available listings (i.e. new in January, plus what was already on the market) was down by 2.5%, from 11,903 to 11,600. This shows that sellers are confident that it’s a good time to put their property on the market (again, despite what one might hear about ‘the best time to buy’, which correlates to ‘the worst time to sell’), and buyers are happily snapping them up.
As for the rest of the year, we all keep hearing concerns about the Canadian economy, and how lower oil prices are bad for us and will lead to all sorts of troubles. However, I hope you’ll recall that in 2009, when oil dipped below $40/barrel, a big threat to the post-recession economy was the threat of rising oil prices (amidst fears it could hit … $80!), because of the impact on consumers’ pocket books. How can it be that rising oil prices were bad five years ago, and falling oil prices are bad now? Sure, the actual price matters as much as the direction (it’s about $57/barrel now, more than the 2008-09 low). I’m just pointing out that there’s always a wicked spin on the news. Obviously, more money in our pockets now means more spending all across the economy, which is a huge stimulant to economic growth. That’s the bigger picture, and more relevant here in Toronto.
Either way, as I always say, the price of real estate in other cities really doesn’t affect prices in Toronto. Even during the global recession of ’08-’09 the Toronto market barely skipped a beat. The recent drop in oil prices will have an impact on real estate in Alberta, maybe a bit in BC, but the effects are unlikely to be hard felt here in Toronto. Yes, that could change – panic is infectious, especially when spread so eagerly by news peddlers – but it’s not something that I’m worried about. Toronto is, and always will be, a unique part of the Canadian real estate world. That’s not going to change any time soon!