The Toronto real estate market blasted through March, 2017. We saw a decent increase in new listings (17,051, up 15.2%), which we expect this time of year, but sales once again gobbled ’em up. There were 12,077 transactions, an increase of 17.7% over March 2016. By the end of the month, only 7,865 listings were left, 35.2% fewer than the same time last year.
This ongoing supply-demand crunch once again drove prices up. The average sale price (all types) hit $916,567 ($688,011 in March, 2016), up 33.2% year-over-year.
Condos in the 416 continued to surge too, with sales up 29% and the average price up 32%, to $550,299. The average price for a townhouse – which can be a bridge between condo apartments and houses – was up 22%, to $761,128. Clearly, there are options for buyers who can’t (yet) afford a semi or fully detached house in Toronto, and the increasing sales numbers in these segments indicate that more and more buyers are going that route.
The biggest numbers are in the fully detached segment, where the average sale price hit $1,561,780! TREB’s HPI, which takes into account differences among housing types, and tries to smooth out the averages, was up 28.6%, slightly lower than the overall average. Still, these are all hefty increases.
The next few months are going to be interesting. We’ll have to wait and see how many new listings come out for the spring market, and whether or not there will be enough to satisfy demand and take the pressure off prices. Sky-high pricing usually brings sellers to market. Again, the lack of options for sellers – i.e. where will they go after they sell? – remains a problem, but anybody motivated to ‘cash out’ will find a way. This market needs that, so I’m not saying that we’ll see a flood of listings and a subsequent correction. At this point, I’m just hoping for something to help ease that pressure.
I’m a big fan of Toronto real estate as an investment – that’s not going to change – but 33% annual increases are not sustainable. Maybe buyers will back off, and do their part to take control of the market (but don’t ask me where they will live while waiting for the market to cool). Of course, even lower price increases won’t likely go below double digits, and real estate should always be a medium-to-long-term investment, so it’s probably still better to buy sooner than later….