For the third consecutive month, Canadian home sales have seen an increase. According to the Canadian Real Estate Association, 0.9% more home were sold nationally in October through the MLS system, with the GTA and Fraser Valley, B.C. area leading sales.
See the breakdown of Toronto real estate news in this December edition.
cytotec in Canada Toronto Real Estate Listings: New Condos Toronto
Out of the 5,377 purchases in Toronto, condos and stacked townhomes accounted for a whopping 91%. In fact, according to the Building Industry and Land Development Association, in October the GTA had the highest supply of newly constructed condos since data started being collected 15 years ago.
The annual rate of housing starts (homes entering construction) in October was about 35,300, according to Statistics Canada. This is compared to about 28,050 in September. The number can be attributed to the decrease in the multi-unit and single-detached homes categories.
Housing starts are expected to fall more in line with the number of homes on the resale market. The resale market was hotter this September and October, with growth reaching 12%. However, the GTA still experienced about 27% fewer sales this October compared to last.
The average price of a home, including all types of homes, also increased this October compared to last year. According to the Toronto Real Estate Board (TREB), the average price rose to $780,104 from $762,691 — up 2.3%.
However, when broken down by category, some housing types are doing better than others. Prices of detached homes declined by 2.5% across the GTA. The decline in the 905-area was more at 4% which brought the average price down to about $910,500. Toronto only experienced a 1.1% decline, making the average around $1.3 million.
On the flip side, condo sales increased by about 21% across the GTA. The average price of a condo is now about $523,000.
Agents selling condos are noting a rise in buyers compared to the summer. Since demand is high and supply is low, buyers are still flocking to detached homes and multi-bedroom condos. Some buyers are also choosing to buy before they sell their current home.
The GTA is seeing an even higher demand for rental properties. While people may not have the money for a down payment, they still have enough saved up to afford a high-quality rental priced up to $4,000.
Effects of New Mortgage Rules
Since new mortgage rules are coming into effect in January of next year, some agents are expecting more of a rush of people trying to buy before the deadline.
When these changes come into effect, it may decrease house transactions by 10 to 15%, according to the Canadian Home Builders’ Association.
New mortgage rules coupled with government changes and high land prices are also deterring developers from Toronto. According to Altus Group Ltd. data, land prices in some GTA areas has risen almost 300% over only five years. In addition, the land available under Ontario’s new growth plan still isn’t significant enough to encourage development. As a result, developers are having trouble building homes people can afford. According to the Bank of Canada, the new mortgage rules may disqualify up to 10% of buyers who have down payments that are 20% or higher.