In September 7,658 residential properties were reported sold by the Toronto Real Estate Board. This was an improvement over the 7,542 sales reported in August, and continues the pattern of consistently strong sales results throughout 2011. September’s performance represents a 25 percent increase over the 6,138 sales reported in September of 2010. Whereas the number of sales reported in 2010 began to decline in the second half of the year, this year the opposite has occurred, with sales increasing on a year-over-year basis. This pattern should continue to year-end.
Sales through the first nine months of this year now total 70,588 properties. This represents a 2.6 percent increase over the number of properties reported sold to the end of September 2010. Confidently it can be predicted that total sales for 2011 will amount to about 90,000 properties, making 2011 the second best year in the history of Toronto sales, exceeded only by the 93,193 properties reported sold in 2007.
Another pattern that is developing relates to the number of new listings coming to market each month. For three consecutive months the number of new listings coming to market has exceeded the same month in 2010. In September 14, 727 new listings came to market.
Last September only 12,899 new listings became available for sale. September’s new listings represent a 14 percent increase compared to last September’s new listings. Slowly this increase in monthly listings is increasing the inventory of available listings, but still below the number of listings that are required to constitute a balanced market. At the end of September there were 18,808 available listings, 8 percent lower than the 20,334 available last year at the same time. Based on September’s sales results, the available listings represent 2.4 months of supply. This is still a seller’s market, which will continue to force buyers to compete for well-located, attractively priced properties.
Average days on market came in at 27, consistent with the average days on market for August. In August 2010 the average days on market were 33. September’s pace was very rapid, consistent with a seller’s market. Toronto’s eastern districts continue to outpace the overall market, coming in at only 23 days. All of Toronto’s trading area were 26 days or better. The slower trading areas for the most part are within the G.T.A’s suburban markets, north and east of Toronto.
In September the average sale price for all properties came in at $465,369. In September 2010 the average sale price was $425,757. This represents a 9 percent increase. Prior to September there were three consecutive months of declines in the average sale price. In August it was $451,663. September’s average sale price represents a 3 percent increase over August. 81 percent of all properties sold had a sale price of $500,000 or less.
334 properties achieved an average sale price of $1,000,000 or more, with 48 properties coming in with a sale price exceeding $2,000,000.
Notwithstanding the economic turmoil throughout the world Toronto’s residential resale marketplace remains unaffected by these challenges. Early October statistics indicate that October will be a strong month, dramatically exceeding the results achieved in October 2010. Clearly affordable debt servicing costs continue to drive the market, causing buyers, particularly the 81 percent of buyers that purchased properties valued at $500,000 or less.
The prevailing market conditions are putting upward pressure on average sale prices in Toronto. In March the average sale price for all properties sold came in at $456,147, a new all time record for a single high average monthly sale price for resale housing, bettering the previous record of $454,423 achieved just last month. As compared to the average sale price of $434,696 for March 2010, year over year prices are up by 5 percent.
The concern going forward will be affordability. The shortage of supply has been driving average sale prices much higher than any forecasts for 2011 made by various economists, including Canada Mortgage and Housing Corporation. Forecasts were unanimous that there would be little or no appreciation in resale housing prices in 2011. These forecasts did not anticipate the shortage of listings that are creating the market imbalance we are anticipating. Continual increases in average sale price, coupled with an increase in mortgage interest rates, could have an abrupt impact on the market. The best outcome for the market would be that sellers decide to take advantage of the higher prices that can be achieved and then proceed to put their properties on the market in greater numbers. This will allow the market to evolve towards a balanced market with healthy sales and moderate price increases.
