TREB’s July Numbers.
Toronto, Aug. 08, 2019
By Ivan Kalinin
Each month when the Toronto Real Estate Board reports on pricing and sales, we try to interpret for our clients trends that seem to be developing and what it means to them. We zero in particularly on TREB areas C08 and E01 – Toronto’s Lower East Side – the neighbourhoods of St. Lawrence Market, The Distillery, Corktown, Regent Park, Cabbagetown, Riverside and Riverdale.
July 2019’s numbers seem to show that the pent up demand we saw from a late spring season kept going full bore into a normally slower July. They show overall GTA sales up a whopping 24.3% over last year and up 5.1% vs last month, seasonally adjusted.
While sales were up, new listings continue to struggle. This increased demand and reduced supply, as always, means prices were up – between 2.5% and 7.7% from last year. The only exception to this continues to be detached homes in the 416, whose average price declined by over 9% from last year.
We’ve been seeing these price increases driven entirely by higher density housing (semis/condos/towns) which makes sense – detached homes are the most expensive and therefore hardest hit by the market cooling policies brought in by the Federal and Provincial governments in 2017. When you pull out the demand, the prices will drop. What will also drop is the number of people who own detached homes putting them on the market when prices are what they consider to be weak. Reality is, they have yet to adjust to the new detached 416 reality: the insane overpricing of 2017 is long gone. As always, this will eventually correct itself – but it’s going to be a while.
TREB Areas C08/E01 – Toronto’s ‘Lower East Side’
Sale prices were on average over asking prices in our LES (101% and 105% respectively) with Days on Market lower (21 and 15) than the GTA average of 22. That continues to tell us that the LES is in demand as a great neighbourhood. E08 still has less than a month of inventory on hand – a great signal if you’re wondering if now is a good time to list your condo or semi.
So what’s the takeaway? I’d say:
- I still think it’s still a good seller’s market for condos/semis/towns, and a great time to lock into your capital gains, especially if you’ve owned for a few years.
- There still exist pockets that are selling below asking, but finding them is trickier than even a few months ago.
- There is pent-up demand out there for detached homes – it just takes good marketing to sell for top dollar.
- The fact that variable rates are right now higher than fixed-rate mortgages seems to indicate the market expects the central bank to lower the prime rate further, so despite the 2017/2018 stress test introductions, increased qualification levels will likely stoke demand. And especially at the lower end of the market. That will keep the price pressures up. And will likely make people wait a bit too list, keeping inventory low. Come and have a coffee with me if you want to talk more about what this means for you as a buyer or seller.
- GTA new condos are for now, in global terms, still a sound place to park money for gains in the medium/long term, especially if you can afford downtown units. The recent moves by the provincial government to remove rent freezes on new buildings will take some time yet to percolate into the market.
Ivan Kalinin is a sales agent at Key Toronto Real Estate Group. Zoocasa Realty Inc., Brokerage. He can be reached at 416 858 8085. Not intended to solicit clients already under contract.