It was an interesting year for Toronto real estate. Although approximately 86,000 residential home sales were reported for 2012, the previous year had more activity with about 89,000 sales. The first half of the year looked like sales were going to soar, but that welcome growth was stunted by the second half of 2012 when homes began to linger on the market and sales slowly edged downward.
Ann Hannah, Toronto Real Estate Board (TREB) President explains why market growth faltered on the TREB site. “Stricter mortgage lending guidelines resulted in some households postponing their purchase of a home. In the City of Toronto, the dip in sales was compounded by the additional Land Transfer Tax, which buyers must pay upfront.”
Average Selling Price (ASP)
By December 2012, the average selling price was up almost seven percent. End of the year data showed home sales averaged $497,298 while 2011 had average home sales of $465,412. See the TREB chart here. Looking back a decade to 2002, one can get a sense of how quickly Toronto home sales have increased these past ten years. The average selling price for 2002 was $275,231 or almost half of today’s ASP. Go back another ten years to 1992 and home sales averaged $214,971 or a mere $61,000 less than 2002’s statistics.
Condo Sales Cool
According to the Wall Street Journal Blog, Toronto condo sales were disappointing after such a hot market in the previous years. Condo ASP fell by about 1% in the fourth quarter from the year before, to $332,410.
Hannah said, “The condominium apartment market was the best supplied market segment in 2012. Strong condo apartment completions in 2011 and the first few months of 2012 resulted in a substantial number of new listings on the Toronto MLS system last year. With more units for buyers to choose from, the annual rate of price growth moderated.”
However, Huffington Post reports that an oversupply in the condo market is causing anxiety among numerous market observers who believe that Toronto is constructing more condos than needed.
Torontolife.com states, “According to the Toronto Star, Toronto has 132 high-rises currently under construction, which easily tops Mexico City’s 88 and NYC’s 86.”
TREB’s Senior Manager of Market Analysis Jason Mercer states, “Robust annual rates of price growth were reported through most months of 2012. Price growth was strongest for low-rise homes, including singles, semis and townhouses. Despite a dip in sales, market conditions remained tight for these home types with substantial competition between buyers.”
The 2012 luxury home market flourished. Sales of high-end homes increased from from 4,326 in 2011 to sales numbering close to 5000 for 2012. Approximately 3000 more luxury homes were listed than in the previous year. See here for more information.
According to CBC news, “Sales of homes worth more than $1 million in Toronto, Montreal and Calgary ended 2012 with positive year-over-year sales growth.” All indicators predict that the luxury market for homes priced over $1 million will continue. Because Toronto is considered one of the most desirable places to live, local and international buyers are providing a strong market for future growth.
Harmonized Sales Tax (HST)
Even though the HST has been in place since July, 2010, confusion about this tax continues today. Some buyers are concerned about paying HST on resale homes. The Toronto Real Estate Board reminds buyers, “Consumers buying a resale home do not pay HST on the purchase price of the home. On the other hand, if you are buying a newly constructed home, HST will apply.”
Days on Market (DOM)
The average DOM for 2011 was 32 but rose to 36 for 2012. This trend may continue through 2013 depending upon buyer confidence and home availability.
What’s your take on Toronto’s 2012 real estate market?