Can anything stand in the way of seemingly insatiable demand for Greater Toronto real estate?
Not even a 16-point measure to cool the GTA housing market has been able to stop home prices from rising, a new report suggests.
The benchmark price of a home in the Greater Toronto Area was $821,400 in May, up 1.2 per cent from April and 28.9 per cent higher than it stood 12 months prior, according to the latest data from the Canadian Real Estate Association.
That’s considerably above the national benchmark price of $613,800, which represents an annual increase of 17.9 per cent.
The May resale numbers were highly anticipated because they detail the first full month of activity since the Ontario provincial government gave word of its Fair Housing Plan, which included a Vancouver-style foreign-homebuyer tax of 15 per cent, on April 20.
While GTA sales were down 25.3 per cent in May compared to April, BMO Senior Economist Sal Guatieri notes in commentary that the decline “merely returned sales to some semblance of normalcy after a manic winter.”
The BMO economist does not expect Toronto to enter a prolonged cooling period as a result “if Vancouver is any guide.”
The CREA stats for Greater Vancouver show a market that has bounced back from the relatively frosty period that followed the BC government’s August 2016 move to tax non-resident homebuyers. In Greater Vancouver, the benchmark home price was $967,500 in May, growing 2.8 per cent from April and 8.8 per cent over year-ago levels.
“Policy tinkering will do little to cool demand on a sustained basis,” notes Guatieri. He also draws attention to the fact that “most areas in the [Greater Golden Horseshoe] still have less than a two-month supply of available homes on the market.” “As a result, while price growth has simmered down from the overheated pace of earlier this year, it remains positive.”
National Bank Senior Economist Marc Pinsonneault was another notable observer to highlight the continued strength of GTA home price gains in a post-foreign buyer tax environment.“[The foreign-buyer tax] had a dampening effect on sales and induced a rush to put homes on sale, but its effect on home prices remain[s] to be seen,” he wrote in a recent report.
His statement was included with the May results of the Teranet-National Bank House Price Index, which suggested GTA home prices rose 3.6 per cent from April to May and 28.7 per cent on a year-over-year basis.
The index, which dates back to 2006, has never recorded a larger month-over-month increase in GTA home prices before.
Home prices in the upper-echelons of the Toronto housing market increased 22.2 per cent in March, compared to where they stood that very month in 2016, according to Knight Frank’s first-quarter index. Knight Frank researchers the world over typically consider the top 5 per cent of a market to be “prime.”
Toronto’s Q1 leap only fell short of a 36.2-per-cent annual gain recorded in Guanzhou, a large Chinese port city, and an increase of 22.9 per cent tracked in China’s capital, Beijing. However, looking at luxury home price growth over a six-month time frame, Toronto inches up to the second slot. From September 2016 to March this year, prime Toronto home prices soared 13.5 per cent, only short of Guangzhou’s rise of 20.2 per cent, according to Knight Frank.
“The big story on the North American continent is the acceleration of prices in Toronto — across all price bands,” Knight Frank’s report containing the index performances reads.
The Toronto luxury housing market outperformed the market in Vancouver, the only other Canadian city on the 41-entry list, “by some margin,” the report notes. In Vancouver, until recently Canada’s hottest major market, luxury prices climbed 7.9 per cent in March, on a year-over-year basis.
As of the Q4 2016 index reading, Vancouver luxury residential real estate was already on a downward trajectory while Toronto’s high-end housing market was on the upswing. In December, Toronto luxury home prices were up a slightly more restrained 15.1 per cent over a year prior, putting it in the number-five spot, just ahead of Vancouver, which placed sixth for posting year-over-year price growth of 14.5 per cent during that period.
Toronto’s current strength comes at a time when flagging Asian markets are regaining momentum, suggests Kate Everett-Allen, head of international research with Knight Frank. “An Asian revival might be overstating it, but we are certainly seeing the region’s key cities of Hong Kong and Singapore rise up the rankings following years of lackluster price growth,” she says in a statement.
In particular, Hong Kong and Singapore are on the upswing, posting annual gains of 5.3 per cent and 4 per cent, respectively, enough to earn the former the 13th spot and the latter the 15th place.
The Plant lives up to its name. This 10-storey boutique condo building, just off trendsetting Queen Street West on Dovercourt Road, should appeal to urban farmers—even at first blush. Greenery will trace its facade. The Plant also offers community-oriented gardens and outdoor barbecues as amenities. It’s no surprise the Curated Properties and Windmill Development Group project’s website notes the bright building is “designed with terrace-to-table” living in mind.
The last phase of Tridel’s master-planned Islington Terrace and located only minutes from Islington Station in Etobicoke, the 395-unit Bloor Promenade boasts access to a whopping 50,000 square feet of on-site amenities. The 40-plus-storey high-rise condo tower puts residents within reach of multiple open-air community offerings: a large family-friendly outside play zone for children and a sprawling rooftop terrace that’s sure to provide striking views of Islington Village and beyond.
Daniels Lighthouse East Tower
What’s a better summertime amenity than Toronto’s waterfront? That’s where Daniels Lighthouse East Tower, part of the developer’s City of the Arts community, is set to stand tall. At Queens Quay East and Richardson Street, the 36-storey Lighthouse East Tower is a stone’s throw from the shores of Lake Ontario. And like The Plant, at Lighthouse East residents’ green thumbs can grow thanks to multiple gardening plots and a barbecue terrace.
Jason Mercer - Director, Market Analysis, discusses the Market Watch Report for January 2017.
Watch the video above!
Jason Mercer - Director, Market Analysis, discusses the Market Watch Report for December 2016.
Watch the video above!
But although home sales in Canada have slowed down in the past few months, the national average price continues to push ever higher. This raises the question of whether government intervention to date has been enough, suggests Desjardins.
“Have we finally achieved the right dose of restrictive measures, and are we on the verge of a slowdown in the real estate market?” asks Benoit P. Durocher, a senior economist with Desjardins, in a recent report. “The housing market slowdown that is especially hoped for in the Toronto and Vancouver areas is not yet certain,” writes Durocher.
Canadian home sales have dropped by 0.7 per cent in the past three months, but prices climbed 0.5 per cent over the same period, according to Desjardins. While the Vancouver market has showed signs of cooling, the same can’t be said for the Greater Toronto Area, which is Canada’s most active market, and as a result, has a considerable impact on national figures.
Home prices in the GTA increased 2.6 per cent from October to December. “In other words, it is not yet certain how well the new restrictions are working,” says Durocher. “Under these conditions, governments will have to remain vigilant and we cannot rule out the possibility that further restrictions will be introduced if the housing market remains lively.”
Jason Mercer - Director, Market Analysis, discusses the Market Watch Report for November 2016.
Watch the video above!
Here are five simple tips to maximize the showing potential of your home during the winter months.
1. Don't Let Winter be an Obstacle
It’s storming or just post-storm, but you have showings booked for your home. (You must have motivated buyers to go out in that weather!) Don't make it even more of a chore for them, be sure to shovel your drive or walkway so that the first impression is a clean and accessible entry. Buyers have been known to turn away, rather than hike to the doorway in knee deep snow and risk snow in their shoes, wet pants, and wet socks.
2. Consider Your Home’s Temperature
Remember, buyers are usually viewing more than one home at a time, and thus traveling around and running in and out of cars or up and down elevators in condos. Typically they will be dressed for the great outdoors, so although having the heat way up is great for lounging on the couch, it can be oppressive for visiting buyers. Be sure to monitor the temperature of the entire house and set it appropriately.
3. Get Buyers Out of the Dark and Into the Light
The winter months also mean shorter days and less natural light. Be sure to have adequate lighting in every room. Dark rooms are depressing when coming in from the cold. Keep it bright in the winter. Some may object for energy saving reasons, but it is best to leave all the lights on before showings or use timers. This allows you to set the mood lighting, and saves the buyers fumbling for light switches. Remember first impressions. Is your home a sanctuary or an oasis from the cold?
4. Preparation is Key
Be sure to prepare for those wet and snowy shoes and boots. No one likes having snow and dirt tracked around there home by shoes or wet socks, just as no one enjoys having wet socks and dodging puddles in the doorway. Be sure to have a "Shoes Off" sign. Place an absorbent mat protecting your stone or wood flooring. Be sure to have a shoe tray or appropriate storage area for shoes, not only to avoid the puddles but to show off the organization of your home. Apply this also to winter jackets, hats and scarves. Show functioning and organization by thoughtfully arranged set ups, don't just have outerwear exploding out of closets or haphazardly hanging on hooks or coat racks.
5. Pet-Friendly—and Groomed!
If you do own pets, be sure to have the appearance of clean pets…especially dogs. We love our furry friends, but it’s best not to leave those dirty slush-soaked towels and doggy outfits laying around. The last thing you want is the smell of wet dog greeting your buyers at the front door.