A strong December sales pace capped a record-setting sales year in the Toronto real estate market. With 4,945 sales reported to TREB last month (up 11.9% over the 4,418 reported for December 2014), the total for the year hit 101,299 – 9.2% more than 2014, and breaking the 100,000 mark for the first time.
New listings for the month actually increased to 4,783, up 8.4% over 4,413 in December 2014. However, total available listings declined. Continued low supply meant continued competition among buyers, which again pushed prices up. The average sale was $609,110, up 9.5% over December 2014, and pushed the average price for the whole year to 622,217, up 9.8% over the 2014 year-long average. (TREB’s HPI increased by 10% year-over-year, which would generally indicate strong demand for all housing types.)
Condo sales in the 416 also showed strength, increasing 12.5% over December 2014. Perhaps due to better supply (compared to low-rise housing), perhaps simply due to the distribution of sales, average price increased only 3.2%, keeping condo pricing ($400,088 in the 416 and just $325,036 in the 905) well within range for first-timers.
January is just getting started, but based on my client list and conversations with other agents it sounds like we are in for another busy year. The ongoing shortage of new listings has created a near-constant state of pent-up demand – i.e. there are buyers out there, and they are looking to buy ASAP. That means we’ll see competition among serious buyers and upward pressure on prices through 2016.
Plus, interest rates are low and may even go lower this year, as the BoC tries to stimulate the economy, so buying power will remain at historic highs. That provides some relief to buyers trying to keep up with the price increases, but it won’t last forever… we think! It’ll last a couple more years, though, so that will continue to be a feature of the real estate landscape for the foreseeable future.
One last thing: mortgage approvals. The rules on that are tightening up again. If you are a buyer (or need to renew an existing mortgage) make sure that you have a fulsome conversation with your mortgage professional BEFORE you go out shopping for a house. Nobody needs a nasty pre-approval fail to ruin their purchase plans. 🙂