Toronto Market Report July-August 2017
June marked the third month in a row where sales declined from the previous month. TREB sales at 7974 units were down a whopping 37% from June of 2016. They were also down 21% from May. Last year was a record year with 113,000 sales. Our own forecast for this year was for 105,000 sales. Year to date, we are at 55,000 sales. Historically, the midpoint of the year represents about 52-54% of the year’s sales. That would translate into a final number of 102,000. In 2016, the June yearly sales were 60,000 which was 53% of the final number.
So why are we looking at the market this way? Everyone talks about the speculator and foreign investor components of our market. The reality is that most sales are a result of changing needs. People change jobs, they marry or divorce, they have kids, and they die. All these changes require a change in housing. Some years we have a bad winter and the spring market is delayed. Other years, there are events that cause people to ‘pause’ their buying and selling decisions such as the monetary crisis of 2008. What we do know is that a ‘pause’ can be three to six months or more. On that basis, we are expecting sales in the latter months of the year to be stronger than normal. Why? The fundamentals of this market have not changed. People are still moving to Toronto and Toronto continues to be one of the most desirable places to live.
Last month we showed the supply of ‘active’ listings are in line with previous years. This month we focused on sales per day in two-week periods. Sales per day bounced back in the last two weeks of June. However, they weakened in the first two weeks of July. Many buyers are still sitting on the sidelines. But what is interesting is that for properties that sell, the days-on-market is sitting at 15 – the same as last year! Prime properties, priced right are still selling quickly!
In terms of the downtown condo market, sales in June were also lower by 29%. One of the reasons why prices have not dropped is that ‘active’ listings in 2017 are also down by 29% - suggesting the market dynamics are not much different than a year ago. In terms of the Humber Bay Shores market, sales in June in 2017 were the same as in 2016!
TREB Sales Per Day in 2017
This chart plots the number of Sales per day in Toronto and the GTA for Spring 2017 in two-week intervals. This chart demonstrates the drop in sales numbers in early Spring and the bounce back in the last two weeks of June. Now we are entering the normal summer slow down. Source: Toronto Real Estate Board
The Morgan: 438 Richmond Street West
The King/Spadina neighborhood, once the home to the garment district and China town has become one of the most popular and densest areas for condos. This fifteen-story building was registered in 2003. The first unit we tracked sold four times. It is a one bedroom with balcony and 9 ft ceilings but without parking or locker. The first sale was for $211,000; then $252,000 (in 2006); $284,000 (in 2008); and $480,000 (in 2017). This is the largest one bedroom in the building at 680 sq.ft. and that translates to $705/sf. The second unit is a two bedroom, two bath unit with parking and locker. It does not have a balcony but has 9 ft ceilings. It also sold four times during the period: first for $271,000 (in 2003); $293,000 (in 2005); $400,000 (in 2008); and for $661,000 in March of 2017. At 865 sqft, that is $764/sq.ft. with parking. Both unit sizes have appreciated at 5.8% per year over the last nine years. There are 217 units in the building and there are currently no units for sale. Given that pre-construction prices are now in the $900/sf range, this building is excellent value
Number of Sales by Area for June 2017
This map shows the number of sales and median price for residential homes for June 2017 by municipal breakdown.