May tends to be one of (if not the) busiest months of the real estate year. So, it’s no surprise that TREB reported May 2014 sales volume up 11.4% over May 2013, to 11,079 transactions – a new record for that month. Intense activity – and on-going competition (‘bidding wars’) – drove up the average price by 8.3%, to $585,204.
In a continuation of the issue that has plagued the Toronto real estate market since the recession, the number of listings declined year-over-year. New listings were down just 0.8%, to 18,931, but overall, total active listings declined by 8.8%, to 20,679 (all houses, condos, etc. in Toronto and the surrounding area). Strong demand in the face of tight supply is what has been driving prices up in Toronto – not speculation, not a ‘bubble’, just plain old supply-and-demand. And, for better or worse, there’s no obvious relief on the horizon. As I have been saying for years, this market is most likely to continue trending upwards for some time to come.
I think it’s worth mentioning that condo sales again increased (5.4% in the 416, 16.1% in the 905), as did prices (7.6% in the 416, to $401,809; and 4.8%, to $307,307 in the 905). That market remains a great outlet for buyers unable to crack the low-rise housing segment. Condos offer a great lifestyle, as well as a chance to build equity and take part in the capital appreciation offered by the investment. Although it likely costs more than renting (on a monthly basis) in the short term, it’s a great foot in the door to the real estate market.
June typically spells the end of the ‘spring market’. However, as I pointed out last month, we seem to have gotten off to a late start this year. After a brief lull for the Canada Day long weekend (it’s not *officially* a long weekend, but loads of people will make it one), the market will carry on through July, albeit perhaps somewhat less frantically. For my part, I have a few buyers who are hoping to make a purchase over the summer, and I hear that there are quite a few listings in the pipeline, so that should make for a good combination. The bottom line is that there will be continuing strong ‘spring market’ activity for the next month or so.