The Canada Mortgage and Housing Corporation (CMHC) has released its Housing Market Insight Report for the Greater Toronto Area. The primary finding of the report is that the risks in condo building in Toronto seem to have been mitigated.
“Condo building activity in Toronto seems to be well-managed,” said Dana Senagama, principal, market analysis for the GTA. In spite of this encouraging information, future inventory management will be critical.”
According to the report, more than three-quarters (79%) of condo projects in the Greater Toronto Area didn’t start construction until they reached a pre-sales threshold of 70 per cent sold, and the majority of the other projects are smaller, or later phases of other developments.
Most of the unsold inventory in the GTA is in Markham or in Toronto Centre, where the condominium markets are the most active.
Read the full report here.
A new map published by BlogTO and formulated by SkyViewSuites has laid out the average home prices for each TTC subway station in the city.
It’s definitely interesting to note where prices rise and fall depending on where you are in the city.
Check the map out in full on BlogTO over here.
Twice each year, the Ontario Real Estate Association polls Ontario residents’ thoughts on home ownership and their local economies in the Ontario Homeownership Index.
This latest poll found that Ontario residents have experienced the largest positive increase in positive sentiment of the local real estate market and economy since 2013, when the Index began.
In the Greater Toronto Area:
59% of residents in the GTA said their real estate market is stronger than last year.
70% of residents in the GTA think their local economy is good.
63% of residents say their local residential real estate market is favourable.
59% of residents in the GTA said the real estate market in their city will be stronger in the next year.
“With significantly-improved perceptions across all markets and timeframes, it is clear to see why the index has posted its biggest gain to date,” said the vice president of Ipsos Public Affairs, Sean Simpson. “As home prices and sales figures throughout the province continue to astound, it is encouraging to see the Ontarians are feeling optimistic about economies and real estate markets, both provincially and locally. The last time Ipsos polled on Ontario real estate, perceptions of the province’s economy were more negative. Midway through 2016, the economic mood has improved considerably, and while there is undoubtedly still room for improvement, opinion has rebounded, likely carrying perceptions of the real estate market along with it.”
Home sales across Canada dropped by 0.9 per cent from the month of May to June, however actual (not seasonally adjusted) sales were up by 5.2 per cent year-over-year in June.
“While national sales activity remains strong, there are still significant differences in housing market trends across Canada,” said Cliff Iverson, the president of the Canadian Real Estate Association. “While home sales activity and price growth are running strong in BC and Ontario, they remain subdued in other markets where homebuyers are cautious and uncertain about the outlook for their local economy. All real estate is local, and Realtors remain your best source for information about sales and listings where you live or might like to in the future.”
The average price for a home in Canada increased by 11.2 per cent nationally year-over-year in June, however if Greater Vancouver and Greater Toronto are excluded that number drops to 8.4 per cent.
Gregory Klump, the chief economist for the Canadian Real Estate Association, said that, “June sales extend trends observed the previous month. As was the case in May, the monthly decline in national sales activity was led by the Lower Mainland of British Columbia and markets in or around the GTA. In keeping with the law of supply and demand, exceptionally low inventory combined with high demand continues to translate into strong price growth in these housing markets, where year-over-year price gains have been running in double-digit territory since late last year.”
There were just fewer than 9,000 condo apartment sales in the second quarter of 2016 according to the Toronto Real Estate Board, representing an increase of over 17 per cent over the same time last year.
“TREB Realtor members are involved in all aspects of the condominium apartment market in the Greater Toronto Area, from working with buyers at the pre-construction stage of development through to the resale or rental of existing units,” said the president of the Toronto Real Estate, Larry Cerqua. “While we have certainly seen a lot of condo construction over the last few years, project completions have not resulted in a glut of inventory.”
During this past quarter, the average selling price for a condo in Toronto reached $415,326, which is an increase of 7.1 per cent over the same time last year.
Jason Mercer, the director of market analysis for the Toronto Real Estate Board, said that, “Similar to the low-rise market segments, we have seen growth in condo sales outstrip growth in condo listings this year. Seller’s market conditions exist for condominium apartments in many parts of the GTA including Toronto’s downtown core. This is why we are seeing average price growth well-above the rate of inflation.”
The number of Toronto condos rented in the second quarter of 2016 was down only 2.7 per cent compared to the same time last year, according to the Toronto Real Estate Board.
“Greater Toronto Area Realtors continued to facilitate a large number of rental transactions in the second quarter, as investor-held condo apartments remained an important component of the overall rental supply in the GTA,” said the president of the Toronto Real Estate Board, Larry Cerqua. “If the market had benefited from more listings in Q2, the number of rentals would have likely been above last year’s level.”
The average rent for a one-bedroom condo increased by 6.4% year-over-year, up to $1,710. For a 2-bedroom condo, the average rent increased by 4.1%, to $2,330.
Jason Mercer, the director of market analysis for the Toronto Real Estate Board, said that, “Year-to-date, total condominium apartment completions in the GTA were down compared to the same period in 2015. This contributed to the decline in the number of apartments listed for rent on TREB’s MLS system. However, the number of rental transactions remained
On July 13th, the Bank of Canada announced it would maintain its target overnight lending rate at 0.5%. On this same day, the advertised five-year lending rate was 4.74%, which is 0.1% higher than the last rate announcement.
According to the Canadian Real Estate Association, “The announcement repeated many of the themes from its announcements and Monetary Policy Reports published in late 2015 and early 2016. Chief among these themes is how the Bank is still counting on the continuation of low interest rates and stronger U.S. economic growth to buoy Canadian exporters amid ongoing weakness in Canadian business investment. However, the Bank again reduced its annual forecast for Canadian economic growth in light [of] ‘a weaker outlook for business investment and a lower profile for exports reflecting a downward adjustment to US investment spending.’ It also recognized how recent economic growth was reduced by the Alberta wildfires; however, it expects Canadian economic growth will pick up in the third quart as oil production resumes.”
The next rate announcement from the Bank of Canada is scheduled for September 7th.