For the fourth consecutive month the Toronto and area resale housing market produced declining sales and lower average sale prices. The housing market peaked in February for average sale prices, in March for monthly reported sales. In February the average sale price for the greater Toronto area came in at an incredible (and unsustainable) $1,334,000. Sales in March hit 10,881, which was not a record. The record for March sales was achieved in 2021 when an unbelievable 15,627 homes of all types were reported sold.


In July the average sale price came in at $1,074,754, a 19 percent decline compared to February’s peak. It should be noted that July’s average sale price was still 1.2 percent higher than July 2021’s average sale price of $1,061,724. Sales in July were more than 47 percent lower than a year ago. There were 4,912 properties reported sold throughout the greater Toronto region. Last year 9,339 homes were sold. Compared to the 10,881 properties reported sold in March, sales in July have declined by almost 55 percent.


There is no mystery as to why the market has changed so dramatically in such a very short time period. The housing market, not only in Toronto and surrounding areas, but universally in North America, was supercharged by pandemic forces (the need for space and safety and the ability to work remotely) and historically cheap money. Money is no longer cheap and with society returning to a form of normalcy, the housing landscape is, compared to February and March and all of 2021, unrecognizable. The Bank of Canada’s benchmark rate is currently 2.5 percent. In March it was only 0.25 percent. In only four months it has increased by 900 percent! Mortgage interest, rates have correspondingly also increased (although not as dramatically) from approximately 2 percent in March to close to 6 percent today. With the inflation rate in Canada at about 8 percent, it is anticipated that when the Bank of Canada meets in September, another rate hike is expected.


Contrary to the commonly accepted view, the declining average sale prices that the market is experiencing are not making housing in the greater Toronto area any more affordable. In fact, rising financing costs are making buying a home in Toronto less affordable. A recent Ratehub study has indicated that with the stress tests and the higher borrowing costs, a buyer in Canada needs $18,000.00 more in household income per year to buy the average priced house than they would have required in February when the average sale price was $1,334,000. That number is even higher in cities like Toronto and Vancouver.


Two market sectors in the City of Toronto are, to some degree, operating contrary to overall market conditions. Firstly, condominium apartments. Notwithstanding declining average sale prices, condominium apartments continue to sell for strong prices. Overall condominium apartment prices were 7 percent higher than last July – 12 percent higher in the 905 region and 4.3 percent in the City of Toronto. The explanation is obvious. In an increasingly unaffordable housing market, condominium apartments remain the most affordable housing type. In July the average sale price of all condominium apartments sold was $719,000, somewhat higher at $744,000 in the City of Toronto.


Secondly, the City of Toronto’s eastern districts. In July all properties in Toronto’s eastern districts sold in only 15 days and for 102 percent of their asking price. The overall market saw properties selling at 99 percent of their asking price. Also, all eastern district properties sold after only 15 days on the market. This compares very favourably with the 20 days it took properties to sell in the overall Toronto and region marketplace. The explanation for this market phenomenon is less clear. It isn’t price. The average price for all properties sold came in at $1,014,000, marginally less than the overall average sale price of $1,019,000 for all City of Toronto properties reported sold. It would appear that the eastern districts, particularly Riverdale, Leslieville, and the Beaches, are viewed as more desirable than other parts of the City by buyers.


Looking forward we should anticipate that this cycle of declines in sales and average sale prices to continue, however not as dramatically as the declines we have experienced since February and March. Until inflation stabilizes and the Bank of Canada stops increasing its benchmark rate the prevailing housing landscape will remain unchanged.

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Not unexpectedly June produced a substantial negative variance when compared to the numbers that the Toronto and Region residential resale market produced in June of 2021. Rising mortgage interest rates have over the last three months caused sales to drop fairly precipitously, and although sales prices are off from their high of February of this year, they remain higher than average sale prices achieved last June. 

In June 6,474 properties were reported sold, a 41 percent decline from the 11,053 properties reported sold last June. The average sale price came in at $1,146,254, more than 5 percent higher than the average sale price of $1,088,991 achieved last June. Having said that, a review of what’s been happening since February, both as to sales and average sale price, gives a more accurate description of where the Toronto and Region residential sales market is going. 


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As the above-noted chart indicates, since February the average sale price has declined by $185,000, or 14 percent, and since March, sales have declined by more than 40 percent. These declines can be charted in direct relationship to the increase in mortgage interest rates. Although declines in both sales and average sale prices will continue as the Bank of Canada raises its benchmark rate in its effort to fight inflation, those declines will be more moderate going forward, unless the Bank of Canada raises rates so high that it tips the Canadian economy into recession.



Interestingly, June’s numbers continue to demonstrate that the demand in the Toronto and Region resale market has not dissipated with rising mortgage interest rates. In June, all properties (on average) sold in just 15 days, only 2 days more than the 13 days it took last year. (This number may not be entirely accurate since it does not reflect properties that were listed and cancelled, then relisted at a lower price). Also, all properties reported across the region sold for 100 percent of their asking (also not an entirely accurate number) and in the City of Toronto at 101 percent of their asking price.


Regardless of the precise accuracy of these numbers they clearly demonstrate that there are many buyers in the marketplace searching to buy homes. As more immigrants settle in the greater Toronto area the demand will continue to grow and create the same market pressures that manifested themselves before and during the pandemic. They won’t be fully apparent until the Bank of Canada has inflation under some control and mortgage interests rates stop rising.


It should be noted that whereas during the pandemic (not that it is no longer with us) properties in Toronto’s 905 region sold faster and at higher prices than homes in the City of Toronto. That pattern has been reserved. As health and travel restrictions have eased, buyers are no longer looking for the space and safety that ground-level properties in the 905 offered. In June every housing type in the City of Toronto – detached, semi-detached, townhouse, and condominium apartments – achieved average sale prices substantially higher than corresponding counterparts in the 905 regions. Secondary markets – markets within 200 kilometers from Toronto – are similarly experiencing downturns both in average sale prices and sales.


The number of new listings coming to market will also have a substantial impact on both sales and average sale prices. In June 16,347 new listings came to market. This compares favourably with the 16,193 that came to market last year. However, due to declining sales, we enter July with 16,093 properties available to buyers, 42.5 percent more than June last year. If this continues buyers will have more choice, sale prices will be negotiated in the buyers’ favour, and more properties will languish on the market until they are sold or the listings cancelled.


Early indications in July are that the slide in sales and average sale prices will continue. Buyers are waiting to see how high the Bank of Canada will raise rates, and as a result how much lower prices will drop.


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As forecast, the rising mortgage interest rates (not to mention other factors at play, like the war in the Ukraine, inflation, and ongoing supply chain problems) had a direct impact on the number of residential properties reported sold in April. At the end of April, the five-year fixed mortgage rate was 4.19 percent. In February the five-year rate was 2.79 percent, an increase of more than 50 percent in a mere two months. Coupled with the mortgage stress test that all borrowers must undergo when qualifying, it is not surprising that many buyers, particularly first-time buyers, have been forced out of the market. Those who qualify may have had to lower their price-point expectations.


One should not interpret the decline in sales as an indication that the Toronto and area residential resale market is softening or becoming more affordable. Properties sold at lightning speed in April and at strong prices. Prices were lower than the record achieved in February ($1,334,408), but still 15 percent higher than the average sale price of $1,090,414 delivered last year. This April the average sale price came in at $1,254,436, a 6 percent decline from February’s record number.


In April 8,008 properties were reported sold, down 41 percent from the 13,613 properties that changed hands last April. Sales reported in April 2021 remains the second highest monthly total on record, only behind the 15,613 reported in March of last year. It is important to note that since last April’s reported sales, no month has come close to April’s numbers. The best month after April last year was May, reporting 11,903 sales, and 10,939 properties reported sold in March of this year. Most months reported sales well under 10,000. This April’s sales are consistent with reported sales since the record peak early in 2021.


Days on market and sales to list prices are the litmus test of the strength or weakness in the market. April’s results clearly demonstrate the continued strength in the Toronto and area marketplace. In April all properties reported sold, including 2,173 condominium apartments, sold in only 11 days. Depending on housing type and location, properties were reported sold in even less time. For example, all detached properties throughout the greater Toronto area sold in only 10 days, while all semi-detached properties sold in only 9 days. Semi-detached properties in Toronto’s eastern districts continued to amaze, selling in only 7 days.




Not only did all properties sell at the speed of light, but they did so at prices substantially higher than their asking price. All properties were (on average) sold at 107 percent of their asking price. In the City of Toronto, sales came in at 108 percent of their asking price, including condominium apartments. In Toronto’s eastern districts all properties sold at 113 percent of their asking price.


The clearest indication that the Toronto marketplace has not weakened and has not become more affordable is the performance of the condominium apartment sector. In April 2,173 condominium apartments were reported sold, 65 percent of them in the City of Toronto. The average sale price for all condominium apartments sold was $780,000. In the City of Toronto, the average selling price was $820,000, and in Toronto’s central districts, where 64 percent of all condominium apartment sales take place, the average sale price came in at an eye-popping $881,451. With average sale prices well above $1,000 per square foot, a buyer should expect substantially less than 800 square feet of living space for $881,451.


Rising mortgage interest rates should not cause market observers to lose focus on the fact that resale inventory levels remain historically low. In April months of inventory were only 0.9 for the entire greater Toronto area, and as in the case of days on market and sale to list price performance, even less depending on location and property type. Last year’s months of inventory were 1.3 months. With large numbers of immigrants making their homes in the greater Toronto area, the demand side of the market will continue. Almost 50 percent of more than 400,000 immigrants coming to Canada in 2021 relocated in Ontario and the greater Toronto area.


As we move into the late spring and summer months, and as interest rates continue to rise, we can anticipate negative variances compared to corresponding months in 2021. Notwithstanding these variances, and as this report has pointed out, the resale market will remain strong and as unaffordable as it has been since the beginning of the pandemic.

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In the face of daunting obstacles, the Toronto and area residential resale market produced stellar results, albeit not the stratospheric results achieved during the same period last year. In the face of rising interest rates, the war in Ukraine and its global consequences, government legislation primarily directed against foreign buyers and investors, and a desperate lack of inventory, the Toronto and area market produced the third-best March and the second-best first quarter on record.

  

Any comparison with March 2021 is almost pointless. During the first quarter of 2021, the resale market was being driven by the frenzy of the pandemic, causing indiscriminate buying, particularly in suburban and secondary markets. Even without all the obstacles, the market is currently experiencing that level of activity was unsustainable.

  

In March, 10,955 properties were reported sold, almost 30 percent fewer than March of last year, but as indicated above, still the third-best March on record. As a clear demonstration of how strong the market was in March, the average sale price came in at $1,300,000, not far from the record price of $1,334,328 achieved just last month. March’s average sale price is almost 20 percent higher than the average sale price of $1,097,351 achieved last year.


Given rising mortgage interest rates, it is not surprising that average sale prices have plateaued. The trend of constantly rising average sale prices is at an end and will stay steady until the current cycle of rising interest rates is at an end. Rising rates have the immediate effect of removing fringe buyers (often first-time buyers) from the market and lowering the price-point expectations of others.


If there was any doubt about the strength of the Toronto and area marketplace, two statistics dramatically prove the opposite. In March, all properties that hit the market (on average) sold in only 8 (unbelievable!) days. To emphasize this point, all 10,955 properties that sold in March were listed, marketed, negotiated, and sold in only 8 days. Even last year during Toronto’s strongest market in history, it took 10 days for all properties to be sold.



Not only did all properties sell in only 8 days, but they sold for an eye-popping 113 percent of their asking price, and this included 3,154 condominium apartments. In Toronto’s eastern trading districts all properties sold at 121 percent of their asking price. If a buyer were to go further east into the Durham region they would find that all properties that hit the market in March sold for 123 percent of their asking price. Semi-detached properties in Toronto’s eastern districts close to the central core continue to defy all market obstacles selling at almost 130 percent of their asking price. These statistics do not reflect a weakening market.


Despite the obstacles faced by the Toronto and area market, the growth in average sale prices was stronger in the 905 region as compared to growth in the City of Toronto. This continues the pattern that started during the pandemic, where less expensive homes offering more space were available.



Overall prices in the City of Toronto increased by 15.8 percent and by almost 27 percent in the 905 region.



High-end luxury properties continue to sell well. In March 1,165 properties having a sale price of $2 Million or more were reported sold. Year-to-date 2,841 properties in this price category have been reported sold, 93 percent of these sales being detached properties in the City of Toronto and the 905 region. Last year only 982 properties were reported sold in this price category.

  

As the market moves into April, supply shortages continue to be a problem. In March a little over 20,000 new properties came to market, almost 12 percent fewer than the 22,747 that came to market last year. As we enter April, buyers’ choice remains limited. At month end there were 10,167 available properties for sale, down over 4 percent compared to the 10,603 available last year. Based on the pace of sales, there were only 0.9 months of inventory in the entire greater Toronto area. The supply was marginally better in the City of Toronto, primarily because of the availability of condominium apartments, coming in at 1.1 months of inventory. Given the population of the greater Toronto area (approximately 6.7 million) a healthy, balanced market requires at least 20,000 properties monthly on a continuous basis available to buyers.



Inflationary pressures resulting in increasing mortgage rates and continued government intervention in the resale marketplace will mean that the months to come will be similar to what we saw in March. Average sale prices will stall, which is welcome, and sales numbers will trend downward as compared to 2021. Without a large increase in supply, which is less than likely, even under these contradictory market forces, it will remain a seller’s market, but with less demand and fewer buyers competing for the same properties.

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It’s now official, the most expensive city in Canada, at least from a housing perspective, is Toronto. February’s resale market performance pushed Toronto prices to new records, breaking records achieved only last month in January.


In February the average sale price for all properties sold, including the sale of 2,772 condominium apartments, came in at an eye-popping $1,334,544, almost 28 percent higher than the $1,044,957 achieved last February, and more than 7 percent higher than the record of $1,242,760 realized in January. Toronto and area housing prices are now more than 60 percent higher than they were at the beginning of the pandemic.


The reasons for this unbelievable increase in prices have been historically low interest rates, a lack of supply, continued growth in population (in 2021 the population of the greater Toronto area is estimated to be 6.4 million, which means that more than 1 in 6 Canadians live in the region) and the fact that there is now a prevailing view that a home is not merely bricks and mortar, where families live and grow, but the most important asset in the accumulation of wealth. The asset valuation affect at play is very similar to why people invest in the equities market, particularly when interest rates are exceptionally low, as they have been.


Given that supply is low, it is not surprising that sales in February were lower than February last year. This year 9,097, a strong number by historical standards, but almost 17 percent less than the 10,929 sales recorded in 2021, all due to supply and lack of inventory.


In February 14,147 new properties came to market, a sharp improvement from the 7,979 properties that came to market in January, but almost 7 percent fewer than the 15,146 new listings that became available to buyers last year. Consequently, heading into March there were only 6,985 available properties in the entire greater Toronto area, 20 percent fewer than at the same time last year. These are critically low numbers. To put these numbers into perspective, the available inventory today is only about a third of what was available at the beginning of 1997. With 430,000 new immigrants expected in 2022, many of whom will end up in the greater Toronto area, there is no immediate relief expected.


Average sale prices continue to be higher in the city of Toronto as compared to the 905 region, but as has been the pattern since the beginning of the pandemic, the gap between the two is narrowing.



In every category records were broken. Of particular note are the prices of detached houses in the city of Toronto, which broke the $2 million barrier. As eyepopping as this number is, in Toronto’s central trading areas the average sale price for a detached properties almost hit the $3 million mark, coming in at $2,952,369. Condominium apartment sales, what used to be the city of Toronto’s least expensive housing form, also broke records with an average sale price of $863,210. Just before the pandemic, the average price for all properties sold in the greater Toronto area was a shockingly low $819,043!


In a month that was full of new records, the time that available properties spent on the market before being reported sold can only be described as startling. In February all properties (on average) that hit the market were reported sold in only 9 days. Single digit time periods on the market have been the norm in some trading areas, but never for the entire greater Toronto area. There were 2,772 condominium apartments sold in the greater Toronto area, 1,842 of them in the city of Toronto. They all sold after spending only 11 days on market. There are no longer any meaningful superlatives to describe what is happening in the greater Toronto marketplace.


As we move into the month of March, the burning question is, will rising mortgage interest rates dampen this unprecedented marketplace? The answer to this question depends on how high and how quickly the Bank of Canada raises is rates. Its initial increase on March 2nd was only 0.25 percent, bringing the Bank rate to 0.5 percent. This increase was modest. Given all the other forces that are driving the Toronto and area marketplace, the impact on the residential resale market will be negligible and in fact may have a FOMO (fear of missing out) affect, driving people to buy now before rates get higher in the future. If rates continue to rise to pre-pandemic levels, in conjunction with the record prices for housing now at play, there is little doubt that home prices will plateau. For prices to come down, the downward asset valuation effect would need to be dramatically stronger than the overwhelming upward pressure on the house prices generated by population growth and the prevailing lack of supply.

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There were a few surprises and once again a number of new records established by the Toronto and area residential resale market in January.


First, and very noteworthy, was the average sale price for all properties reported sold. It came in at an eye-popping $1,242,793, surpassing the previous record of $1,163,210 achieved in November of last year. By contrast, last January the average sale price came in at only $966,068, a year-over-year increase of almost 30 percent. This is not supposed to happen in January, historically a quiet month, and it happened during a snow filled month making access to properties extremely difficult.


As has been the case throughout the pandemic, the increase in the Toronto and area average sale price was 905 driven. As the chart below indicates, year-over-year price increases in Toronto’s 905 region averaged almost 34 percent and only 24 percent in the City of Toronto.

As a result of these increases, the 905 has dramatically reduced the gap in housing prices between the City of Toronto and the 905 region. With more people working from home and needing more interior and outdoor space, this pattern will continue throughout the foreseeable future.


A trend that began in the second half of 2020 has now become common place, namely the disparity between list and sale prices. Throughout the entire Toronto and area marketplace all properties sold for 113 percent of their asking price, including 2016 condominium apartments. The most startling disparity was the reported sale of semi-detached properties in Toronto’s eastern districts. All semi-detached properties throughout the eastern districts sold for 127 percent of their asking price, and astoundingly in the neighbourhoods of Riverdale and Leslieville the sales to list ratio was 134 percent, another market record, and a buyer’s nightmare. This discrepancy will only get worse. At the beginning of February there were only 26 active semi-detached property listings for the entire eastern trading area.


The luxury market has also undergone a major transformation over the past few years. In January, 590 properties were reported sold with a sale price of $2 Million or more. This compares with only 331 in January 2021, 130 in 2020, and a mere 76 in 2019 – a 676 percent increase in three years. This is also, no doubt, a record. Clearly the definition of “luxury” will have to be redefined.


The other end of the market spectrum, condominium apartment sales, continue to increase in price. A year ago, condominium apartment sale prices in the city of Toronto resulted in a negative variance, down 8 percent compared to 2020. This January condominium apartment prices rose by almost 22 percent to $760,643. But the real story is in Toronto’s central core. In January, 966 apartments were reported sold with an average sale price of over $800,000. Considering that central core sales account for almost 70 percent of all City of Toronto apartment sales, what used to be the most affordable housing type is starting to become quite pricey. What’s worse is that in one year the available supply of condominium apartments has declined from 2,360 to 1,095, a 53 percent decrease.


Supply generally will be the driving – rather inhibiting – market force in 2022. Supply was at an all-time low at the end of 2021, with no improvement in January. January saw 7,979 properties come to market, a decrease of almost 16 percent compared to the 9,438 that came to market last year. As buyers venture into the February market only 4,140 available properties await them, a 44 percent decline compared to the 7,396 (also extremely low) available last year.


With this shocking low level of supply, it is not surprising that reported sales were down in January compared to last year. There were 5,636 sales in January, down over 18 percent compared to the 6,888 property sales last year. Notwithstanding this negative variance, it must be remembered that January’s numbers are very robust compared to what used to happen in January before the pandemic. For example, in January 2020, the month that Covid-19 became part of our vocabulary, only 4,546 sales were reported, and the year before that only 3,968.


Looking ahead all eyes are on the Bank of Canada and when it will raise interest rates. Given the level of demand and the lack of supply the impact of higher mortgage interest rates will likely be moderate. Those buyers struggling to qualify today will be forced out of the market, especially first time buyers, but for every one of them there are still many who are intent and capable (if they can find one) on acquiring a house.


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In 2021 we experienced an unprecedented residential resale market. More records were shattered in 2021 than in any other year of record keeping – sales prices, properties sold, and, unfortunately, inventory levels all established new records. As we end 2021 and move into 2022, it will be inventory that will have the greatest impact on the resale market.


Let’s begin with December’s data.

Sales declined in December as compared to 2020 only because of a lack of inventory. Demand continues to be at record breaking levels, but to put it bluntly, there just weren’t enough properties on the market for buyers to purchase. That is dramatically illustrated by the fact notwithstanding declining sales, the average sale price for all properties sold, including condominium apartments, came in at $1,157,849, 24.2 percent higher than December 2020.


It should be noted that increases in average sale prices were substantially higher in the 905 region as compared to price increase in the City of Toronto, as the chart below clearly illustrates.




The increase in average sale prices in the 905 region during the pandemic has been nothing but stunning. As forecast in a monthly Market Report earlier in 2021, the difference in average sale price between properties in the City of Toronto and the 905 region has all but disappeared. The reasons for this market change are due to the pandemic driving buyers away from the denser concentration of population in the City of Toronto, the ability to work remotely, affordability, and supply. It would now appear the attraction of supply and affordability may no longer exist.


The luxury end of the resale market also broke records in 2021. In December 473 properties traded hands having a sale price of $2 Million or more. Last year only 287 properties sold in this price category. On a year-to- date comparison, 7,807 properties valued at $2 Million or more sold in 2021 compared to only 3,649 last year, an increase of 114 percent. Sales in the 905 region in this category contributed substantially to this increase in 2021. Detached property sales in Oakville, King, Richmond Hill, Whitchurch-Stouffville and Uxbridge all came in with average sale prices in excess of $2 Million, with King approaching an average sale price of $3 Million. Historically this only happened in central Toronto.


Throughout the greater Toronto area average sale prices continued to be eye-poppingly higher than asking prices. This is also a strong indicator of demand, first witnessed after buyers adjusted to the protocols of viewing and buying properties during the first wave of the pandemic in May and June of 2020. For example, in Oshawa, all properties presented to the market sold in only 9 (yes 9!) days at sale prices 121 percent of their asking price. The case was the same in Pickering. Two trading areas in Toronto also exceeded sale prices of 120 percent or more than asking prices. We are short of superlatives to describe this phenomenon.


In 2021, the condominium apartment sector came back very robustly after pandemic fears in 2020 caused it to shrink dramatically. With that revived interest in condominium apartment living came rising prices, and perhaps most shockingly, the disappearance of condominium apartment inventory. In central Toronto, where most condominium apartments are located, 977 sold in December, last year over 1,000 apartments sold in the same trading area. The decline was due to lack of supply. On the price side, those 977 condominium apartments sold for $790,611, almost 20 percent higher than last December’s average sale price of $669,000.


The decline in condominium apartment supply over the course of 2021 has been breathtaking. In December of 2020 there were 4,294 active condominium apartment listings in the greater Toronto area, and 3,120 in the City of Toronto, the bulk of those to be found in the central core of the city. As 2021 comes to a close, there were only 1,488 active listings in the entire greater Toronto area and a paltry 1,189 in the City of Toronto, 20 percent fewer than the 1,447 condominium apartments that sold in December! The only source of affordable housing is disappearing.


Overall, 2021 proved to be the strongest year in recorded resale history. Total number of sales for the year came in at 121,712 surpassing 2016, the previous best year, by more than 7 percent. In 2016 113,040 properties traded hands. During 2021, except for January ($966,068) every month saw the average sale price exceed $1 Million, with November setting a new record at $1,163,287. A truly exceptional year!


How the market performs in 2022 will depend entirely on supply. December’s numbers are not encouraging. During December 5,174 new properties came to market, almost 12 percent fewer than came to market in 2020. What is even more shocking is the fact that entering 2022 there are only 3,232 active listings for the entire greater Toronto area, more than 46 percent of which are condominium apartments. By contrast last year there were 7,892 active listings which at the time we reported were totally inadequate to meet the growing pandemic demand.


Many economists have deemed 1996 to be the year that the Toronto and area market broke from its six year recessional slide and began to show signs of strength and robustness that have continued through to today’s market. That year set a record for sales at 55,779. In 1996 the population of the greater Toronto area was approximately 4.2 million people. Since then the population of the greater Toronto area has grown to well over 7 million people. In December of 1996 the Toronto Real Estate Board reported that there were 16,964 active listings available to buyers in the greater Toronto area. At 3,232 active listings this December, we find ourselves with only 1⁄4 of the listings available to buyers in 1996, and we have a lot more buyers.


So supply will be the major driver in 2022. As immigration numbers to the greater Toronto area will continue to increase, even more supply will be necessary. It will take aggressive, innovative, and rapid thinking, planning and decision-making by all three levels of government alleviate this housing crunch.




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With one month still remaining in 2021, November’s reported sales brought the total year-to-date sales to 115,716 residential properties sold. We will finish the year with approximately 122,000 sales, eclipsing the previous annual record for properties sold in 2016. In that year 113,040 properties traded hands. As will become evident, given the supply problems the market is experiencing, 2021’s record-breaking accomplishment is not likely to be surpassed for some time, and definitely not in 2022.


In November 9,017 residential properties were reported sold, also a record number for any previous November. Last year 8,728 properties were sold, 3.3 percent fewer than this November. The big news coming out of the November data, aside from the new records achieved, was what’s happening to prices and the region’s disappearing inventory.

In addition to being the strongest November on record, and breaking the annual record for total sales, November saw the Toronto and area average sale price climb into record territory. The average sale price for all properties reported sold came in at $1,163,323, almost 22 percent higher than last year’s average sale price ($955,889). November marks the sixth consecutive month of monthly increases. This streak started in June when the average sale price was a “mere” $1,089,135, 7 percent less than the average sale price for November. The pace of these monthly increases in average sale price began to accelerate in September when it became evident that the Toronto and area supply problem was moving from chronic to dangerous.


The supply problem became even worse in November. Only 10,036 new listings came to market in November, 13.2 percent fewer than the 11,556 that came to market last year. Given the absorption rate – 9,017 properties were reported sold, almost the same number as came to market – combined with the few listings that realtors were able to bring to the market, we find ourselves entering December with only 6,086 properties available to buyers, an eye-popping 56 percent fewer listings (13,798) than at the same time last year.


As unbelievable as these numbers are, depending on housing type and neighbourhood, the situation is even direr. For example, there were trading districts that reported no sales of semi-detached properties for November. The reason no sales were reported is due to the unnerving fact that no semi-detached properties came to market in November in those trading areas.


No surprise that sales of all types of properties were happening at lightning speed. In the City of Toronto, all detached properties were reported sold in just 13 days. Semi-detached properties sold in just 11 days. In the 905 region, all semi-detached properties that came to market in November sold in a mere 8 days with some trading areas reporting sales at an even faster pace. All sales of semi-detached properties in Halton, which includes Burlington, Milton, and Oakville, were processed in only 4 days!


Another milestone that was achieved in November was months of inventory. Given the data in this report, it won’t surprise anyone that for the first time months of inventory for the greater Toronto area dropped below one month. For the entire region, months of inventory came in at 0.9 months. In some trading areas, this number was, unbelievably, even lower. Durham region, which includes Ajax, Uxbridge, Oshawa, and Pickering ended the month with only 0.5 months of inventory.

 
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In the September Market Report, five themes that were driving the Toronto and area marketplace were identified. These themes have become prominent during the course of 2021 and it is becoming evident that they will be the key features of the residential resale market for the remainder of 2021 and into the early months of 2022. These themes,

with slight variation, were prominent in the October market data.


1. AVERAGE SALE PRICE

Prior to October, it appeared that the average sale price for all properties sold had plateaued around $1.1 Million, including condominium apartments. In October the average sale price popped up to $1,155,345 (also including condominium apartments), into record territory, and substantially higher than the $968,535 achieved last year, a 19.3 percent increase year-over-year. What drove this unexpected increase? Another key theme, the tension between market demand and supply.


2. DEMAND-SUPPLY TENSION

The demand-supply problem moved beyond critical into a danger zone in October. In October 11,740 properties came to market. That was 34 percent fewer than the 17,806 that came to market last year. Couple that with the 9,783 properties that were reported sold in October, by month-end there were only 7,750 properties in the entire greater Toronto area for sale. Compare that to the 17,313 that were available last year, and it becomes abundantly clear that we are in a dangerously imbalanced zone.


This imbalance will become even clearer when we discuss what’s happening to sale prices as compared to asking prices. With so little supply, and record levels of demand, the problem of lack of supply and affordability becomes acute. Multiple offers are the norm, no longer the exception, and based on the average sale price for October of $1,155,345, buyers competing for the limited number of properties on the market are driving Toronto and area into one of the most expensive cities on the globe.


3. CITY OF TORONTO V. 905

As 2021 winds down to a close, the disparity between the City of Toronto and the 905 region has been dissipating. Beginning in the late spring of 2020, during the height of the pandemic, more and more buyers have been flocking to the 905 region (and to many secondary markets throughout southern Ontario). As 2021 has unfolded, prices in the 905 region have increased dramatically, proportionally faster than those in the City of Toronto, and more recently, the availability of properties for sale has declined to the point where there are now more properties for sale in the City of

Toronto than in all the 905 region.


At the end of October, as mentioned above, there were only 7,750 properties available for sale in the entire Toronto and area region. A closer look indicates that 4,247, or almost 55 percent of those properties were in the City of Toronto. That leaves only 3,503 available properties for sale from Burlington to the west, to Innisfil in the north and to Clarington in the east. This is a vast region. The lack of supply in the 905 region is a product of the pandemic, and buyers’ need and desire to have more space, safety and to satisfy their need for security. The ability to work remotely has fueled and enabled this diaspora, but now the 905 region is without supply and with startingly higher average sale prices.


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At this pace the difference in price, for all housing types, will evaporate. It’s particularly interesting to note the dramatic increase in suburban condominium apartment prices.

*October year-over-year increases.


4. LIST PRICES V. SALE PRICES

In October every trading area saw sale prices come in substantially higher than list prices. For the entire greater Toronto area the average sale prices was 107 percent of the asking prices. This includes all reported sales in Halton, Peel, York, Durham, Dufferin, and Simcoe Counties. Effectively the asking price is a point of commencement, and that’s all. Scarcity, location, demand, and auction style sales, will determine the end price. In various locations the percentage of sale price over ask was even higher. For example, all semi-detached properties in Toronto’s eastern trading areas sold for 115 percent of asking price and in an eye- popping 7 days!


It is not surprising that entering the month of November there were fewer active listings of every type of property, except condominium apartments, than were sold in October. In some trading areas the situation is dire. In the greater Toronto area 878 semi-detached properties were reported sold in October. November begins with only 347 available semi-detached listings. Not much choice for buyers, putting further pressure on both availability and affordability.


5. CONDOMINIUM APARTMENTS

Condominium apartment sales continued their resurgence in October. In the City of Toronto, sales were up by almost 34 percent compared to a year ago. Similarly in the 905 condominium apartment sales were up by almost 21 percent to 986 units. Prices followed the rise in sales, increasing by almost 11 percent in the City of Toronto and by 17 percent in the 905 region. Clearly, buyers have overcome their weariness of living in highrise towers in more dense conditions, or this simply may be due to the fact that compared to ground level opportunities, condominium apartments remain the most affordable housing type and choice.


Like all other housing types, the supply of condominium apartments is declining. At the end of September, there were 3,882 active condominium listings in the greater Toronto area, and 2,918 in the City of Toronto. At the end of October the supply of condominium apartments throughout the entire region had declined by more than 11 percent to 3,440, and by 7.5 percent to only 2,700 in the City of Toronto. The last bastion of affordability and supply is quickly disappearing.


These five themes will sum up the Toronto and area marketplace for months to come. The now more real, looming threat of mortgage interest rates may cause a disruption to these themes. Based on the Bank of Canada’s recent pronouncements we may see rate hikes within the next few months. Rate hikes will have no positive impact on supply, although they will no doubt curb the rising prices that we witnessed in October.

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The residential resale market rebounded in September after five months of declines in sales and the lull of the summer months. There were 9,046 sales reported in September, 18 percent fewer than reported last year, but more than 5 percent higher than the 8,580 reported sales in August, the first month-over-month increase since the early spring of this year.


As indicated in our August Report, there are a number of themes that are driving the market, themes that will continue at play for the remainder of this year and into 2022.


1. AVERAGE SALE PRICES

Average Sale Prices for all properties sold have been fairly stable through 2021. The average sale price has been approximately $1,080,000 since February, fairly consistent throughout those months, including the month of March, which saw the market deliver an unbelievable 15,629 sales.


In September, however, the average sale price jumped to a record-breaking $1,136,280: eye-popping because it includes 2,664 condominium apartment sales, which represent 30 percent of the entire market with an average sale price of only $708,000. Needless to say, the average sale price of ground-level property was on fire, with the average sale price for detached and semi-detached properties in the City of Toronto coming in at $1,779,000 and $1,305,000, respectively. The average sale price for the greater Toronto area will continue to rise, primarily by what is happening in the 905 Region.


2. CITY OF TORONTO – 905 REGION DISPARITY

In September average sale prices in the 905 Region once again accelerated much faster than in the City of Toronto, as is illustrated in the chart below.



As measured against all property types, the average sale price increased by more than 25 percent in the 905 Region as compared to only 12.2 percent in the City of Toronto (416).


The reason for this disparity is obvious. House prices of all types remain substantially less expensive in the 905 Region as compared to the City of Toronto, however they are catching up.


3. DEMAND-SUPPLY TENSIONS

September has clearly illustrated that demand, throughout the greater Toronto area, is dramatically high, and unfortunately, supply is chronically and historically low. It was no surprise that affordable housing was a key campaign platform for all parties during the recent national election.


At the end of September, there were only 9,191 available properties throughout the greater Toronto area, almost 50 percent fewer than last year. It is not surprising therefore that all properties that came to market in September (on average) sold in only 14 days, and substantially less in some sub-markets; for example, semi-detached properties in the City of Toronto (only 11 days). What is especially concerning is that the available supply in the 905 Region has dwindled dramatically.


In September of the 9,191 properties available for sale, 52 percent of them (4,821) are located in the City of Toronto. Of those 4,821 available properties, 2,918 are condominium apartments. Historically only 30-35 percent of available properties were located in the City of Toronto, the balance in the 905 Region. There is no clearer evidence that the pandemic has caused buyers to look beyond the City of Toronto, where house prices were less expensive and the supply was more plentiful. Not any more.


4. LIST PRICES VS. SALE PRICES

Except for one trading area in the City of Toronto, where the average sale price was $5,625,720, the recorded sale price of all properties sold throughout the greater Toronto area exceed the asking price, on average by 106 percent. This is a first, and it proves that in this market the list price is merely a starting point. No one expects that the end sale price will be equal to or lower than the asking price. This phenomenon is a product of the demand-supply problem. In some trading areas, the end sale price exceeded the asking price by substantially more than 106 percent. For example, all semi-detached properties in Toronto’s eastern trading areas sold for a breathtaking 118 percent over the asking price.


To reiterate, the list price of properties today is only a starting point.


5. CONDOMINIUM APARTMENT SALES

Condominium apartment sales, devastated by the early effects of the pandemic, have come roaring back, and so have their sale prices. In September 2,664 condominium apartments were reported sold across the region, exceeding pre- pandemic sales numbers. Of those 2,664 condominium apartment sales, 1,792 were in the City of Toronto.


As the chart above illustrates prices are following sales. In the City of Toronto, the average sale price increased to $744,730 and to $634,111 in the 905 Region, 8.5 and 18 percent, respectively. In the central core of Toronto, where 1,176 sales were recorded (44 percent of all recorded sales) the average sale price reached $806,242, a record high and the first time the average sale price has exceeded $800,000. Even Toronto’s least expensive housing type is now becoming pricey.


Going forward the five trends that have been discussed in this Report will continue to influence the resale market. Expect sales in October to be even stronger than September, with continued pressure on sale prices due to the lack of available supply.


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A number of themes became clear in August, themes that will drive and impact the Toronto and area residential resale market for the remainder of this year and no doubt into 2022.


The first and most important is supply. In August only 10,609 new properties came to market. This contrasts sharply with the 18,599 that came to market in 2020. What is even more shocking is that at the end of August there were only 8,201 properties available to buyers, a 51 percent decline from the same period last year when buyers could choose from 16,662 properties. Available properties were reduced to their lowest level in over a decade. A chronic problem has now become critical.


The critical nature of the supply problem is glaringly evident in certain sub-sectors of the marketplace. At the end of August there were only 337 semi-detached properties available for sale in the entire greater Toronto area. This number is shocking but becomes eye-popping when it is remembered that in August 750 semi-detached properties were reported sold. That means that we enter September with 55 percent fewer semi-detached properties available for sale than the total number reported sold in August. Only the City ofToronto’s central districts have more semi-detached properties available at the beginning of September than sold in the month of August, and only marginally at that.


These numbers make it clear that during the current election campaign, the only housing item on all parties platforms should be supply! Platforms that speak to making purchasing properties easier – ie. longer amortization periods, government assisted loans, reducing mortgage insurance premiums, tax free home buying savings accounts – are misleading at best and reckless at worst. They are blatant, unhelpful, self- serving promises that hope to pave the way to being elected. Supply and ways to achieve it should be the only words uttered by politicians at this time.


The second theme that emerges is the disparity between the 905 region marketplace and the City of Toronto (416). The pandemic and its impact on the house buying consumer has been dramatic. Before the pandemic house prices (on average) were lower in the 905 than in the City of Toronto, nor did house prices rise as quickly in the 905 region. That has all changed.


In August the average sale price for the 905 region was more than $1,050,000. In the City of Toronto it was $1,000,000. Prior to the pandemic these differences were reversed. Also, the increase in average sales prices was more startling in the 905 region than in the City of Toronto. In the 905 region detached properties increased in value by 26 percent, semi-detached by 21 percent, townhomes by 20 percent and even condominium apartments increased by almost 15 percent. By contrast in the City of Toronto detached properties only increased by 11 percent, semi-detached by 4 percent, townhouses by 8 percent, and condominium apartments sales prices by 7 percent.


The explanation is three fold. Firstly there is less supply in the City of Toronto, except for condominium apartments, house prices are still pricier in the City of Toronto, and the pandemic, which has intensified the need for space and safety, coupled with the ability to work remotely, has driven buyers to the suburbs and secondary markets.


The third theme that has emerged is the plateauing of average sale prices. Yes, August’s average sale price of $1,070,911 for all properties sold was 12.6 percent higher than the average sale price achieved in August 2020 ($951,219), but it has steady declined since May’s stratospheric record breaking average sale price of $1,108,362 and has stabilized at approximately $1,073,000.



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Without a mortgage interest rate decline, which is unlikely, or massive increase in household incomes, also unlikely, consumers have reach their maximum housing purchasing power, outliers excluded.


The last theme that is emerging is the resurgence in condominium apartment sales. During the early months of the pandemic condominium apartment sales and prices collapsed. The density of condominium living and fear of the Covid-19 virus drove consumers to ground level properties, especially in the suburbs and secondary markets. Not only were properties less expensive in the 905, and in secondary markets, those prices got consumers more space and the psychological benefit of safety.


August’s results have made it clear that the condominium apartment market is back. In the City of Toronto condominium apartment sales increased by more than 13 percent. Almost 1,740 apartments traded hands, representing almost 58 percent of all properties reported sold in the City of Toronto in August. All condominium apartment sales took pave in only 21 days at 102 percent of their asking price. In Toronto’s central districts, where most sales take place, the average sale price came at $783,712, a number beginning to exceed pre-pandemic levels. Not only are condominium apartment sales robust, but on the supply side they are practically the only game in town. At the end of August, there were 3,577 condominium apartments available to buyers. This, shockingly, represents 44 percent of the total available supply of 8,201 properties of all types.


These themes – supply, disparity between the 905 and City of Toronto marketplaces, the stabilization of average sales prices, particularly in the City of Toronto, and the resurgence of the condominium apartment market – will play out in September, similarly to how they did in August. The result will be sales results and average sale prices similar to what were achieved in August.


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In some ways the July resale market’s performance was anticlimactic. We could see it unfolding in June, and as a result, there were few surprises. Sales continued their decline – in June 11,106 properties were reported sold, dropping to 9,390 in July, but still a strong month by historical standards. The record for reported sales was established last July at 11,081. At the end of the day there are only so many buyers in our given geographical area, and since the beginning of 2021, almost 80,000 properties have changed hands, a pace that will see at least 120,000 sales take place by the end of the year, shattering the previous record of 113,400 sales achieved in 2016.


All market indicators continue to point to a very robust market. The market’s slow down is due to absorption, seasonal change, and with higher vaccination rates and declining social restrictions consumers are focusing on activities other than buying and selling real estate. In addition, even if there was no change in buyers’ attitudes, there simply isn’t enough inventory in the marketplace. In July only 12,551 properties came to market, 31 percent fewer than the number that came to in market last July. As we enter August there are only 9,732 properties available for sale in the entire greater Toronto area, more than 35 percent less than were available last year (15,018).


The sales that took place were at lightning speed. In July all 9,390 reported sales took place (on average) in only 15 days. Last July, which was a record-breaking month, they took place in 17 days. These sales also came in at record-breaking average sale prices. In July the average sale price for all properties sold was $1,062,256,

12.6 percent higher than last July’s average sale price ($943,594).


A closer examination of July’s average sale price indicates the growth in sale prices is taking place in Toronto’s 905 region, and very moderate price growth in the City of Toronto, as the chart below clearly indicates.



The reason for this dramatic differentiation is twofold. Firstly, prices for homes in the 905 region are substantially lower than in the City of Toronto. Affordability is very much at play in the decision-making of buyers. Secondly, the need and desire for more space and perceived more safety, continues to drive buyers away from dense areas in Toronto to the less crowded suburbs. Of the 9,390 reported sales in July, 6,121 traded in the 905 region, or more than 65 percent. This trend is not likely to end soon.


Overall, the high end of the market continues to perform very strongly. In July 521 properties having a sale price of $2 Million or more were reported sold. Last year only 452 properties were sold in this category of homes. It is amazing to look back to 2019. In that year only 185 properties were bought and sold having a sale price of $2 Million or more. In just two years the number of high-end properties sold has increased by an eye-popping 182 percent.


Condominium apartment sales have continued to strengthen over the last few months, particularly in the City of Toronto, where the availability of most condominium apartments is located. In fact, in July condominium apartments were the only housing type that saw year-over-year growth, with detached, semi-detached, and townhouse sales all producing negative variances compared to July of last year. Condominium apartment sales were up by 4.2 percent.


July saw the first overall negative variance in sales in 12 months. Again, it must be remembered that reported sales in July 2020 were record-breaking. Last July 11,033 properties were sold, this year 9,390. July was the fourth straight month of declining sales, which as discussed in our June market report, was anticipated, for reasons already stated – absorption, affordability, lack of supply, and historic seasonal adjustment. Early indications are that this trajectory will continue into August, and for the same reasons. Last August 10,738 residential resale properties were reported sold. This August we will see close to 8,500 properties trading hands. This does not mean that the market is softening. In 2019, which was a solid resale year, 7,682 properties were reported sold. What we are witnessing is the resale market slowly morphing back to pre-pandemic patterns.



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There were 11,106 resale properties reported sold in June in the greater Toronto area. In the City of Toronto 3,850 properties changed hands. In both areas, these numbers were substantially lower than the astronomical peak achieved in March. Having said that, sales activity in June was only outpaced by June sales achieved in June 2016.

                          

The Toronto and area market remains very strong, even though it may feel like it has softened. Peak momentum is clearly now behind us, although some components of the marketplace – ie. condominium apartments and various sought-after neighbourhoods – may resist both the softening of sales and average prices.

In June the average sale price for all properties sold came in at $1,089,536, 17 percent higher than the price for properties sold last year ($931,131). Because the City of Toronto’s numbers are heavily weighted by condominium apartment sales, the average sale price for the City was a little lower at $1,079,749.


Detached and semi-detached property prices in the City remained very robust at $1,700,000 and $1,267,000 respectively. Detached properties increased by 11.5 percent compared to last year, while semi-detached sale prices actually declined by almost 2 percent. This decline was due more to lack of supply than demand.


The high end of the market continued to perform robustly in June. This year 699 properties having a sale price of $2 Million or more were reported sold. Last year only 365 properties were reported sold in this price category, in percentage terms, an increase of almost 92 percent. With an increase in the average sale price of 17 percent, and 2,461 more properties reported sold this June, it is not surprising to see more property sales in the $2 Million plus range. Most of the greater Toronto area property sales are now in the $1 Million to $1.5 Million range.


Price increases were eye-popping in the 905 region. Detached property sale prices increased by almost 30 percent to $1,329,873, while semi-detached property prices increased by 21.5 percent to $915,000. These increases reflect the fact that buyers are continuing to flock to less expensive, ground-level homes, in less dense neighbourhoods. This phenomenon was dramatically accelerated by the concern for space and security (and price) generated by the pandemic.

 

Condominium apartment sales momentum continued in June, a pattern that first became noticeable at the beginning of this year. During the initial months of the pandemic and for most of 2020, condominium apartment sales fell off a cliff, victim to buyers’ quest for ground-level properties offering more space and security. In June 2,800 condominium apartments were reported sold in the greater Toronto area, a 57 percent increase compared to June last year. Most of those sales were in the City of Toronto (1,901).


With the increase in sales, prices have also been increasing. In June average sale prices for condominium apartments reached pre-pandemic levels. The average sale price for sales in the City of Toronto reached $717,466. In Toronto’s central districts where most condominium apartment sales take place (1,247) the average sale price rose to $770,000. Not only did the average price reach these lofty levels, but all central Toronto sales took place (on average) in only 15 days and at 102 percent of the list price. Buyers are fearlessly returning to high rise living.


Throughout the heady pandemic market supply has been a problem. There was no relief in June. Only 16,189 properties came to market, almost the exact number that came to market last year. Unfortunately, due to the extraordinary absorption in sales that have taken place in 2021, we enter July with only 11,297 properties available to buyers, almost 20 percent fewer than were available last year at this time.


Early July market data indicates that the pace of sales and the average sale price for properties sold will continue declining. July’s market will be primarily impacted by seasonal influences and consumers’ return to more “normal summer” activities. The province has been in lockdown for many months. The lifting of restrictions is beginning to moderate the consumer’s fixation for engaging in real estate buying and selling.

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The Toronto and area residential resale marketplace continued its slide towards a more normal but still very strong market. In May 11,951 properties were reported sold, a decline of more than 12 percent compared to the 13,650 properties reported sold in April, and a decline of more than 23 percent compared to the record breaking, stratospheric 15,646 properties sold in March. March’s numbers were, I believe, the zenith of the pandemic market, just before Ontario’s vaccination program was rolled-out.


I reiterate, that notwithstanding these declines, the market remains very strong by historic standards and May’s average sale price of $1,108,453, which includes more than 2,700 condominium apartment sales throughout the region, is an all-time record. May’s average sale price was almost 30 percent higher than last May’s average sale price of $863,583. In absolute dollars, a stunning increase of $245,000 in just 12 months. This record-breaking average sale price is clearly stretching the affordability limits of Toronto and area buyers.


Although the number of sales declined over the past two months, the pace of sales did not. In May it took only 11 days for all properties that came to market to be reported sold. At the end of May there were only 1.2 months of inventory for the entire greater Toronto region. The number was a little higher in the City of Toronto (1.6 months) due to the preponderance of condominium apartments in the City.


Condominium apartment sales have surged during 2021, and although comparison to 2020, at least until the month of June are not meaningful, in May the 1,881 condominium apartment sales recorded in the City of Toronto were almost 160 percent higher than last May’s results. With this surge in sales, sale prices for condominium apartments have also increased. The average sale price for condos in the City of Toronto came in at $716,976, a 6.3 percent increase compared to last year. In the City’s central core, where most of the region’s condominium apartments are located, the average sale price came in at $766,462, making Toronto’s least expensive housing form fairly pricey.


The price of detached and semi-detached property sales in the City of Toronto reached eye-popping levels in May. The average price for detached properties came in at $1,716,272, and $1,326,153 for semi-detached properties, increases of 20 and 16 percent respectively compared to last year. Average sale prices in the 905 region were not as high - $1,331,176 for detached properties, and $915,479 for semi-detached homes – however, from a percentage standpoint they exceeded the increases in the City of Toronto. In the 905 region detached property sale prices increased by 41 percent while semi-detached increased by 28 percent over the same period last year, a reflection of buyers fleeing to the suburbs, seeking more space and a sense of safety, at prices for less than can be found in the City of Toronto.


Affordability and supply will continue to moderate the Toronto and area marketplace as we move towards the second half of 2021. The region’s average sale price of $1,108,453 is making Toronto and area very pricey, and except for condominium apartments, beyond the reach of most buyers. To some extent that has been one of the reasons for the pull back in the market since March. Affordability will become even more relevant as the higher mortgage stress tests are applied beginning in June.


In May 18,586 new listings came to market. Sellers were clearly taking advantage of the record-breaking selling prices. The growth of the Toronto and area inventory levels will have a moderate impact on average sale prices, as stretched buyers discover that they have more choice than during the early months of 2021. The combined impact of tighter affordability and more inventory should see the marketplace continue to level off, consistent was “normal” pre-pandemic markets.


Prepared by Chris Kapches, LLB, President and CEO, Broker

Chestnut Park Real Estate Limited, Brokerage


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Market reports rely heavily on comparisons to the same month the year before. Comparing April 2021 to April 2020 would be pointless. Last April we were in the darkest period of the Pandemic. Buyers, sellers, and their realtors were developing and adapting to new, restrictive, and demanding industry protocols. As a result, there were fewer properties available for sale and even fewer sales. As a result it is much more fruitful to look at what unfolded just this past March and compare it to April’s market performance.


March 2021 was an all-time record breaking month both for the number of properties reported sold and the average sale price. April 2021 could not keep pace with the torrid March market. Having said that, April was itself record breaking, setting a new record for reported sales for any previous April. There were 13,663 homes reported sold, 12 percent fewer than the blistering 15,652 that were sold in March. There was also a marginal decline in the average sale price. March’s average sale price came in at $1,097,565. Although still eye-popping, April’s average sale price dipped to $1,090,992.


The decline in price was across the board for all housing types, except condominium apartments. Detached, semi- detached, and townhouse property prices all declined, albeit marginally. In April the average price for detached properties came in at $1,699,756 (a 3 percent decline from March), semi-detached at $1,288,005 (a 1.5 percent decline), and townhouses at $942,371 (a 2 percent decline).


The outlier was condominium apartment sale prices. In April 3,290 condominium apartment sales were recorded, a considerable decline from the 3,821 reported sold in March, a decline of almost 14 percent, contributing substantially to the overall decline in market sales as compared to March. However, while sales declined, prices increased, both in the City of Toronto and the 905 region. The average sale price for City of Toronto condominium apartments came in at $727,137, up from the $707,835 achieved in March. In Toronto’s central districts, where most of the greater Toronto’scondominium apartments are located, the average sale price came in at $781,471, a number not far off average salesprices for condominium apartments pre the Pandemic.


So, what does all this data tell us about the Toronto and area marketplace? Firstly, it was impossible that March’s pace could be exceeded or even equaled for a second month in a row. Since the beginning of 2021, 47,157 properties in the greater Toronto area have changed hands. Historically this is an unprecedent pace. What April’s data tells us is therehas been tremendous buyer absorption during the last few months of 2020 and now into the first four months of 2021.Bluntly, the market is running out of buyers. With no immigration since last March, and with many city dwellers moving to secondary markets during the Pandemic, the number of potential buyers is declining.


As to the average sale price, it appears that it too may have reached a pinnacle in March. Between 2019 and March 2021, average sale prices have increased by more than 20 percent. Household incomes have not. A recent study indicated that the decline in mortgage interest rates over the same period has boosted the price that buyers could pay for properties by 22 percent. It is not co-incidental therefore that average sale prices have increased by more than 20 percent over the same period.


Subject to an increase in migration to the Toronto area from other parts of the country and a return to pre-Pandemic immigration levels, the market has probably plateaued and in fact we may see a slight decline in sales as we make our way to the latter half of 2021. Similarly, unless there are declines in mortgage interest rates, the average sale price has plateaued at approximately $1,100,000. Looming on the horizon is the more restrictive mortgage stress testingeffective June 1, 2021, which will place further restrictions on buyers’ borrowing power.

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Just when you think the Toronto residential resale market can’t reach new heights, it surprises us again. March was not only strong but it shattered records, something that is becoming a common occurrence.


In March 15,652 homes were reported sold, an all-time monthly record and 97 percent more than the 7,945 properties sold last March. Even considering that the second half of March 2020 was impacted by the implementation of Covid restrictions, March’s results are nothing but extraordinary.

Not only was sales volume record-shattering, but so was the average price. The average price for Toronto and area came in at an eye-popping $1,097,585, the highest average sale price ever recorded. This number is even more impressive when it’s remembered that it included the sale of almost 4,000 condominium apartment units, the least expensive homes on the market, averaging less than $700,000.


The average sale price was unequivocally driven by the unbelievable number of high-end properties that were reported sold. In March 982 properties having a sale price of $2 Million or more changed hands – also a record! By comparison, only 245 sold in this category last year, obviously a number dampened by the effects of the pandemic’s restrictions during the last half of the month.


The speed at which properties sold was also record-breaking. All 15,652 properties reported sold in March came to market and were sold in only 13 days. There are no market descriptors that can define this phenomenon. At one time it was the eastern trading districts in Toronto, in particular Riverdale, Leslieville, and the Beaches, that had speed of light sales. Now sales are taking place even in the 905 region at an incredible pace.


Not only are properties selling quickly in the 905 region, but they also account for the bulk of all reported sales. Of the 15,652 sales in March, 10,522 of them took place in the 905 region, representing 67 percent of all reported sales.



March had a bright spot for stretched and frustrated buyers. In March 22,709 properties came to market, a much-needed increase in inventory, and 57 percent more than March of last year. It would appear that sellers are becoming eager to capitalize on the incredible prices that were achieved this month.


This runaway market gives rise to a variety of issues. There is the issue of sustainability. The average sale price reached a lofty $1,097,565 in March, almost $200,000 higher than it was a year ago. Average household income has not increased proportionately. Far from it. Even more worrisome, at the date of preparation of this Report, (April 8th), the average sale price in the City of Toronto was even higher at $1,106,000, including condominium apartment sales.


When the sustainability of the housing market becomes an issue, it generates government scrutiny. Government intervention inevitably leads to unwanted consequences, as past government intervention has clearly demonstrated. So there is talk of a capital gains tax on principal residences and even a speculation tax. The best solution is an organic one – namely the market moderates itself because households become incapable of paying higher prices, and more inventory comes to market. We are beginning to see signs of both of these developments.

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Is it really February? The Toronto and area residential resale market certainly did not behave as if it was. Actually, it was more reminiscent of a crazy spring market, and even then, it outdistanced most spring markets that we have recently experienced. In February 2021, 10,970 properties were reported sold in the greater Toronto area. To put that number into perspective, no month in 2019 came close to 10,970 sales. The strongest month for sales in 2019 was May at only 9,951 reported sales, and that was an excellent month! By comparison to February 2020, also a strong month at 7,193 sales, February 2020’s performance was 52.5 percent stronger.


It will surprise no one with such robust sales activity that prices were also sharply on the rise in February. In fact, the average sale price for the greater Toronto area shattered the $1 Million threshold for the first time, finishing the month at $1,045,488, almost 15 percent higher than the average sale price of $910,142 achieved last year. It is interesting to note that the average sale price for the City of Toronto came in lower at $995,201. That was due to the 2,167 condominium apartment sales that were recorded. These lower price point properties acted as a drag on the City of Toronto average sale prices.


Detached and semi-detached property sales in the City of Toronto were extremely active and at a strong prices. Expect to pay almost $1.7 Million for a detached property and $1.325 Million for a semi-detached home – if you can find one. The supply of detached and semi-detached properties in Toronto is at an all-time low. In February, 915 detached properties were reported sold. By March, the inventory of detached properties was down to 938 homes or only 1 month of supply. The supply of semi-detached properties has reached a critical state. In February, 295 properties sold in this category. By the beginning of March, only 181 semi-detached properties were on the market, only .6 months of supply – an unprecedented number.


Sales of every housing type, including condominiums, were strong. This was particularly true for higher-priced properties. In February, 597 properties having a sale price of $2 Million or more were reported sold. Comparisons to previous years are staggering. In 2020 only 266 properties in this price category were sold, and in 2019 a mere 193. Sales in February 2021 were a shocking 125 percent higher than sales at this price point in 2020.


Condominium apartment sales were also very strong in February, posting results 63.2 percent higher than last year. While sales increased, the average sale price continued to decline by 6.4 percent in Toronto but rising by 5.4 percent in the 905 region. It is the decline that is relevant in that 70 percent of all condominium apartment sales are in the City of Toronto. The decline in average sale price in the City’s core, where most sales are recorded, was even lower, down by 10 percent compared to last year.


February’s resale market was like no other we have experienced. Going forward we can anticipate more of this, at least until March and into April, however sustaining 15 percent price increases (higher in some districts) will be difficult. Even with historically low mortgage interest rates, affordability will become (is?) a concern. On the positive side, February saw new inventory increase by over 40 percent compared to last year. If the pace of new listings coming to market continues, more consumer choice should see prices begin to moderate. But currently, with only 1.5 months of inventory, price moderation is still some months away.


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Once again, the Toronto and area resale market delivered eye-popping results. As compared to last January sales were up by over 52 percent and the average sale price increased by almost 16 percent. In absolute numbers January produced an unprecedented 6,928 sales – there were only 4,546 last year – and the average sale price came in at $967,885 for all properties sold throughout the greater Toronto area. It was only $838,000 last year.


But the market was not homogenous. Within the City of Toronto, sales were dominated by condominium apartments. Over 55 percent (1,703 apartments) of all reported sales were condominiums. That was a shocking 85 percent increase compared to the number of condominium apartments sold last year. In the last two months, condominium apartment sales in the City of Toronto have come roaring back erasing the mid-pandemic declines they had experienced.


That was only part of the story. While sales were soaring, average sale prices continued to decline. By month-end, condominium apartment prices in Toronto’s 416 region had declined by 8 percent. The situation was more extreme in Toronto’s central core. Almost 70 percent of all Toronto condominium apartment sales are located in Toronto’s central districts, primarily downtown. Last year the average sale price for condominiums in Toronto’s central districts was $758,000. In January, the identical apartments were selling for $661,000, 13 percent less. With such steep price reductions, it is not surprising that buyers are flocking to the condominium apartment market.


The other market story is Toronto’s suburbs, the 905 region. Not only are more sales taking place in the region, but at rapidly rising prices. In January the average sale price in the 905 region was more than 10 percent higher than the average sale price in the City of Toronto ($866,331). Halton (Burlington, Halton Hills, Milton, and Oakville) and York Region (Aurora, East Gwillimbury, Georgina, King, Markham, Newmarket, Richmond Hill, Vaughan, and Whitchurch-Stouffville) both produced average sale prices for all properties reported sold of more than $1,160,000.


Higher priced properties throughout the greater Toronto area sold at a pace not seen before for January. In January 331 properties were reported sold having a sale price of $2 million or more. That amounts to a shocking 155 percent increase compared to the 130 properties that sold in this category in 2020, and only 76 in 2019. This is an amazing accomplishment, and it demonstrates that robust sales of properties in the greater Toronto area are taking place in all price categories.


Aside from the issue of sustainability, the perennial concern, as we move into February, inventory levels remain a problem. At the end of January, there were only 7,396 properties available to buyers, almost 5 percent fewer than last year. The bulk of those listings (44 percent) are condominium apartments. There simply aren’t enough ground level, freehold properties to meet demand. It is the rarest of occurrences when new listing offerings aren’t greeted by multiple offers – many multiple offers.


Looking forward, February will be an even stronger month than January. Early February data indicates that the resale market will exceed last February’s results by at least 50 percent and that the average sale price, both in the City of Toronto and the surrounding 905 region, is on an upward trajectory. Cheap money – five year mortgage interest rates at less than 2 percent – government stimulus, and the consumers’ frantic psychological need to acquire real estate, preferable low rise, with outdoor space, will continue to drive this frenzied market for the foreseeable future.

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December’s Toronto and area residential marketplace exhausted all the superlatives that we would normally apply to a robust resale market. Not only was December’s housing market strong by historical standards, but it dramatically exceeded historic norms, performing more like a spring market than what we have come to expect of property sales during the holiday season. It’s almost as if the holiday season didn’t exist, and unfortunately, because of the restrictions imposed bythe effects of Covid-19, normal retail shopping was non-existent. Deprived of retail shopping, it appears that buyers focusedtheir attention on housing instead.


December saw 7,180 residential properties reported sold. That is an eye-popping 65 percent increase compared to the 4,364 properties reported sold last December. December 2019 was a very strong month. For example, only 3,746 properties were reported sold during December 2018. It’s not surprising that with this surge of sales, we also witnessed a surge in the average sale price. On a year-over-year basis, the average sale price for all properties sold in the greater Toronto area increased by more than 11 percent, from $838,662 last year to $932,222 this December.


No doubt this huge jump in average sale price was driven by the number of higher-priced properties that changed hands in December, normally a quiet month for luxury property transactions. In December, 287 properties having a sale price of $2 million or more were reported sold. That compares with only 125 last year, an increase of 130 percent. Not surprisingly more than 90 percent of those properties were detached single-family homes in the 416 and 905 regions.


December’s condominium apartment sales require extra attention. Both during the third and forth quarters of 2020condominium apartment sales and prices declined, in some cases substantially, namely in Toronto’s central core, while inventory levels increased dramatically. In December, we saw a stunning resurgence of condominium apartment sales. InToronto’s 416 region, sales increased by 80 percent compared to December 2019. In the 905 region condominium apartment sales were equally as strong, increasing by 75 percent. In the 416 region, there was no corresponding increase in average sale prices. In fact, quite the opposite: average sale prices declined by 5 percent. In Toronto’s central core, where most of the City’s apartment projects are located the decline was even steeper. Prices fell by almost 10 percent, from $733,000 in December 2019 to $669,000 this year. Central core condominium apartment sales accounted for almost 67 percent of thecity of Toronto’s total condominium apartment sales. It should be noted that condominium apartment sales in the city’seastern districts not only doubled, but average sale prices actually increased from $476,000 last year to $512,000, buckingthe trend in the central core.

The increase in condominium apartment sales at lower average sale prices shifted the variance between average sale pricesoverall between the 416 and 905 regions. Before December the average sale price in the 905 was always less than the 416. Not this year. The average sale price for the greater Toronto area came in at $932,000. It was 4 percent less in the city of


Toronto ($894,000), all as a result of the massive increase of condominium apartment sales at sharply falling prices.


It will be interesting to see if December’s condominium apartment sales were a market anomaly. It may be that the moreaffordable prices have overcome buyer’s need for space and safety. This phenomenon might also be driven by the fact that prices in the 905 region have risen to prohibitive levels.


Having said that sales of ground level properties, detached, semi-detached and townhouses were robust both in the 416 and 905 regions. Price increases in the 905 eclipsed price increases achieved in the 416 region. Interestingly even condominium apartment average sale prices increased by over 6 percent in the 905 region, a stark contrast to what we witnessed inToronto’s central core.


Overall, more than 95,000 properties were reported sold in 2020, a 9 percent increase compared to the 87,751 properties reported sold last year. Notwithstanding the unprecedented socio-economic upheaval experienced universally in 2020 asa result of the pandemic, the Toronto and area resale market results were the third best on record. An extraordinary accomplishment!


Looking at 2021 the economic factors that drove the 2020 housing market remain in place. The key factors are exceptionallylow mortgage interest rates, government stimulus, and a roaring stock market. With interest rates as low as they are, asset acquisitions will continue to drive the housing market. It is impossible to see a change in this scenario until borrowing moneybecomes substantially more expensive than what it is at the beginning of 2021.

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The Toronto and area residential resale market continued its torrid pace in November, defying all expectations and forecasts.It wasn’t, however, homogenous in its performance, with different housing types and areas performing at dramatically different levels.


Overall, reported sales for the greater Toronto area were up a scorching 24.3 percent compared to November 2019. Last year, 7,054 residential properties were reported sold. This year that number jumped to 8,761. That number was driven primarily by the sale of ground-level properties, detached, semi-detached, and townhouse homes. Sales of these types of homes increased in both the City of Toronto and the 905 region, and correspondingly, so did average sale prices.


In November, the average sale price for all properties sold across the greater Toronto area came in at $955,615. This number was more than 13 percent higher than the $843,307 achieved in November of 2019. In the City of Toronto, the average sale price was even higher, coming in at $979,224. These numbers would have been even higher if not for the lagging performance of condominium apartment sales in the City of Toronto.


Once again, as in previous months, resale data indicates that market activity has shifted from the City of Toronto to the905 region. The 905 region includes Halton, Peel, York, Durham, Dufferin, and Simcoe Counties. Of the 8,761 reportedsales for the greater Toronto region, 5,729, or 65 percent, were in the 905 region. What we also witnessed in November was the average sales price gap between the City of Toronto and the 905 region is narrowing. For the third straight month, average sale price gains in the 905 region far outdistanced gains in the City of Toronto. The average price increase for all property types in the City of Toronto was 5.5 percent. In the 905 region the average sale price jumped by 14 percent. Even if condominium apartment sales were extracted from these numbers, gains in the 905 were at least double the average sale price gains in the City of Toronto.


Except for condominium apartment sales in the City of Toronto the entire resale marketplace continued to move at a torrid pace. In November, all sales across the greater Toronto area sold (on average) in only 19 days, 26 percent faster than the 24 days it took last year. The pace for semi-detached properties in the City of Toronto was even more hectic. All semi-detached properties sold in only 14 days. Toronto’s eastern districts, which include the popular Riverdale, Leslieville, and Beaches trading areas, saw semi-detached properties sold in only 11 days, and (on average) for 109 percent of their asking price. The average sale price for the combined eastern districts for semi-detached properties exceeded $1 million, with substantially higher average sale prices in the most popular neighbourhoods. Similar results were achieved in Toronto’s western districts. Because of higher price points, Toronto’s central district sales were a little slower (20 days) but still managed to achieve sales prices that were 102 percent of the asking price.


It should be noted that the high end of the market also put on a strong performance. Throughout the greater Toronto area, 356 properties with an average sale price of $2 million or more were reported sold in November. This compares with only 199 sold in the same category last year. On a year-to-date basis, 3,363 $2 million plus properties have been reported sold. Last year, at the end of November, 2,171 properties at this price point were reported sold. This year’s sales represent a 55 percent increase in high-end property sales compared to 2019.


If there is a dark spot in the greater Toronto resale marketplace it’s condominium apartment sales in the City of Toronto. InNovember, sales were flat, and average sale prices fell off by 3 percent. Unfortunately, that’s not the whole story. Inventorylevels are increasing dramatically. In November, 2,943 new condominium apartments came to market (some of these were no doubt new listings of units that hadn’t sold and were being re-introduced to the market, often at lower asking prices). Last year, only 1,629 new listings came to market. November’s new listings increased the total number of active listings to 5,018, 194 percent higher than the 1,707 condominium apartments available to buyers at the same time last year.


On a more positive note, by the end of November, year-to-date, 88,026 properties (all types) were reported sold for the greater Toronto area. Total sales for 2019 were only 87,753. Notwithstanding the pandemic, and its negative impact on our society, our businesses, and our health and safety, with December still to be counted, 2020 will be the Toronto and area’s best year for resale house sales since 2016. Astonishing.

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