2013 was a good year for the Toronto real estate market. The slowdown that occurred towards the end of 2012 carried into early 2013, but the market quickly recovered and became stronger than ever. In 2013, the GTA saw an increase in real estate home prices as well as total number of sales.
The Toronto Real Estate Board (TREB) recently published their year-end market report. Here are a few of the key statistics for the year.
Average Selling Price
The average selling price of Toronto area homes in 2013 was $523,036, which is an increase of 5.2 per cent over the 2012 average rate. After a slower start to the year, 2013 had a strong finish. The month of December saw an 8.9 per cent increase in average selling price over the 2012 December numbers. This increase is well above inflation rates.
Total Toronto real estate market sales saw an increase of 2 per cent over the 2012 calendar year. The latter half of the year became a seller’s market. Homes stayed on the market for a shorter period of time while selling for more money. According to Toronto Real Estate Board President Dianne Usher, “After a slow start to the year, sales growth accelerated to a brisk pace in the second half of 2013. Despite the inclement weather in December, we finished the year with a respectable gain in transactions compared to 2012.”
The strongest demand in Toronto is for low-rise housing. Single homes, semi-detached and town homes have all seen a marked increase in sales. Condos are also selling but at a slower rate than low-rise housing.
Another sign of the year-end being a seller’s market is in the decrease in the total number of new properties on the market. Even though sale numbers were up, there were about 4 per cent fewer new listings reported in December. The average number of days on the market for properties was at 33, down from 35 days in December 2012.
To read the complete Toronto Real Estate Board (TREB) Market Watch report for 2013, please go to their website here.
2014 Market Trends
What trends are going to continue into 2014? In general, the market is predicted to remain strong. According to experts, a few factors may influence what happens in the coming year.
With a possible mortgage rate increase towards the end of 2014, real estate sales may face a slowdown. As Finance Minister Jim Flaherty explained in a recent interview on CTV, Canada will face global pressure to raise the interest rate in 2014.
But not all share his restraint. “Looking forward, I believe that home ownership in the GTA will remain affordable as borrowing costs stay low. The result could be a further increase in sales in 2014,” said Dianne Usher, Toronto Real Estate Board President.
Current interest rates continue to be near historical lows, allowing new buyers to enter the housing market. Low rates also help buyers to purchase bigger homes as mortgage payments are more affordable. An increase in the interest rate may keep new housing purchases out of reach for some Torontonians.
Continued Strong Demand for Housing
Experts are predicting a continued strong market across the country’s largest cities. As reported on CBC News here, sale prices are projected to rise above inflation rates again in 2014 due to continued demand for housing.
If there continues to be a decrease in listings and properties on the market, the Greater Toronto Area market may continue to be a seller’s market. More buyers for fewer properties may create more bidding wars and increase selling prices.
As reported by TheStar.com here, Toronto jobless rates are amongst the highest of Canada’s big cities. At 8.4 per cent in December 2013, the rate is significantly higher than the Canadian average of 7.2 per cent. An improvement in employment rates could have a positive effect on the housing market.
Toronto’s Next Hot Neighborhoods
Location, location, location. According to a recent Globe and Mail article, some Toronto neighbourhoods to watch include Eglinton West, Long Branch, Little India and the Bloordale area. They are positioned as great up and coming districts that allow for more affordable housing with access to fabulous boutiques, restaurants and schools. And in Toronto, lifestyle sells.
Condo developers are honing in on what buyers want, making condos more about lifestyle, activities and community. As reported by the National post here, Stan Moneta, president of Sherwood Park Property Management says “What’s happening in the evolution of condos is that as prices are going up and suites are getting smaller, the units themselves are effectively bedrooms and the amenity space in the building is where people actually live and entertain their friends.”
Market Bubble and Housing Crash
Experts can’t agree on the future of the Canadian housing market. Some predict a correction is looming, others say the market is sound. Only time will tell who is right here, although the market in early 2014 is still going strong.
What are your predictions for the 2014 Toronto real estate market?