Toronto Real Estate and Neighbourhoods Blog | Move Smartly

Toronto and Vancouver – Canada’s Hottest Real Estate Markets

John Pasalis in Toronto Real Estate News

Toronto and Vancouver have Canada’s hottest real estate market according to the Teranet-National Bank House Price figures released this week.

Looking at the appreciation in the Index from each city’s market bottom in 2009, Toronto is leading the way with a 13.6% increase in house values.  Vancouver prices increased 11% followed by Ottawa at 8.7%.  Toronto’s market bottomed in April 2009 versus June 2009 for Vancouver.  This two month head start pushed Toronto’s appreciation ahead of Vancouver’s for November 2009, but prices in Vancouver are appreciating at a faster rate than Toronto.

Toronto House Prices up 19% Mid January

John Pasalis in Toronto Real Estate News

The Toronto Real Estate Board reported 1,749 existing home sales on the Multiple Listing Service (MLS®) during the first two weeks of January. This result was almost double the 888 sales reported for the same period in 2009, when sales had dipped to a recessionary low.

“We have had a strong start to 2010,” said Toronto Real Estate Board President Tom Lebour.
“Widespread sales growth in terms of geography and housing type indicates that many
households remain confident in their ability to purchase and pay for a home over the long-term.”

The average price for transactions in the first two weeks of January was $395,307, compared to an average of $332,495 for the same period in 2009.

“Double-digit average annual price growth will continue through the first quarter of 2010 as sales remain high relative to listings and we continue to make comparisons to last year’s winter downturn,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Toronto House Prices Increase for 13th Straight Year

John Pasalis in Toronto Real Estate News

The average price for a Toronto home increased by 4% in 2009 to $395,460, the 13th straight year house values have increased in Toronto.

Browse year over year comparison charts on our new Toronto Real Estate Statistics page.

The following chart shows the average price for a home from 1975-2009.

 

Note the difference in appreciation between the late 1980s to the appreciation we’ve seen over the past thirteen years.  In the late 1980s house prices increased 150% in just 4 years compared to a 100% increase from 1996 to 2009. 

Feds May Change Mortgage Rules to Cool Down Real Estate Market

John Pasalis in Toronto Real Estate News

CTV News reports that finance minister Jim Flaherty is considering raising the minimum down payment required for a mortgage in Canada and possibly reducing the maximum amortization period allowed in an effort to cool down Canada's hot real estate market.

Flaherty warns "If we see further evidence that there is excessive demand in the housing market or that there's an indication that people are taking on obligations that they will not be able to handle in the future when interest rates rise, then we will take some action,"

"The likely action we will take is to increase the size of the down payment from 5 per cent to a higher number, reduce the amortization -- bring it down from 35 years to something less," he said.

Low interest rates have been one of the key drivers behind the quick turnaround in Canada's real estate market.  The federal government is looking for ways to cool the demand in the real estate market without raising interest rates.  Increasing interest rates would have a negative effect on the other sectors of Canada's recovering economy.

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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A Glimmer of Hope for Toronto Home Buyers

John Pasalis in Toronto Real Estate News

The Toronto Real Estate Board’s November Market Watch report showed the first sign that some relief might be on the way for Toronto home buyers.

Every month this year prior to November experienced a decline in the number of new listings coming on the market.   In some months the decline in new listings was as high as 30% over the previous year.  This decline is one of the factors driving the imbalance we are seeing between the demand and supply for homes in the Toronto market.  November marked the first month this year where we did not see a decline in the number of properties coming on the market.  The number of new listings remained flat when compared to the same month last year.

 

But the overall inventory (total number of homes available for sale) for the market continues to be well below historical levels.

More Transparency Needed in The Real Estate Industry’s Multiple Offer Process

John Pasalis in Toronto Real Estate News, Home Buying Tips

The Real Estate Council of Ontario (RECO) recently published a brochure with some consumer focused information about competing in a Multiple Offer for a home in Ontario.  The publication offers some good tips on setting an offer price and understanding the risks involved when excluding conditions on financing and inspection.  The brochure unfortunately falls short by not recommending any new rules or guidelines on how the real estate industry should manage multiple offers and how to improve the transparency to consumers.

When more than one buyer competes for a home in Toronto, they have to put their best offer forward from the start because the seller typically accepts the best offer presented.  The best offer is usually the one with the highest price and fewest conditions.  Most buyers who win multiple offers often exclude a condition on financing and inspection in order to make their offer more attractive (See Realosophy's Home Buyer's Guide to learn more about the risks of removing conditions from your offer).

What makes multiple offers particularly stressful for many buyers is the lack of transparency.  Buyers are only told how many other buyers are competing for the same house.  They know nothing about the contents of the other offers, who the other agents are or even what brokerage they work for. 

Toronto Real Estate Sales up 84% First Half of November

John Pasalis in Toronto Real Estate News

From the Toronto Real Estaet Board:

In the first two weeks of November, Greater Toronto REALTORS® reported 3,666 sales – up 84 per cent compared to the first two weeks of November 2008. The average price for these transactions was up 10 per cent year-over-year to $415,066.

Increased interest in ownership housing has been widespread throughout the GTA and across all housing types,” said Toronto Real Estate Board President Tom Lebour.  “However, it is important to point out that we are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price”

Year-to-date sales, at 78,233 are up 11 per cent compared to 2008. Average price, at $393,180, is up by three per cent.

“Sales and average price in the GTA this winter will be well above levels reported
throughout the fourth quarter of 2008 and the first quarter of 2009," according to Jason Mercer, TREB's Senior Manager of Market Analysis.

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Competition in the Real Estate Industry – This Entrepreneur’s Perspective

John Pasalis in Toronto Real Estate News, Real Estate Trends

In case you missed the headlines earlier this week, after a two-year investigation into Canada’s real estate brokerage industry, the Competition Bureau concluded that Multiple Listing Service (MLS) rules established by the Canadian Real Estate Association (CREA) restrict consumer choice and limit the scope of alternative business models.

To really understand what this decision means we need to step back a few years to see how this investigation started.

Several years ago, the real estate industry started to take a closer look at a new kind of discount real estate brokerage that was making its way into the market.  These new brokerages were charging sellers a flat fee to upload their property listing to the MLS, but were doing very little outside of simply posting the listing.  In many cases, the real estate agent responsible for uploading the listing hadn’t even visited their client’s house before uploading the listing to the MLS.

The industry argued that these minimum service brokerages were compromising the integrity of the MLS trademark. In 2006, CREA decided to put an end to these upstart brokerages by changing the MLS rules to set minimum services standards that all realtors must meet before uploading a listing to the MLS. These minimum service standards included:

• Inspecting the property
• Posting the listing
• Maintaining a continuous agency relationship while the contract is posted on an MLS system
• Receiving and advising on offers
• Sharing compensation by and through the listing broker

The minimum service standards CREA put in place put an end to the brokerages that were running under the minimum service discount model.  The former discount brokerage RealtySellers launched a $100 million lawsuit against CREA and the Toronto Real Estate Board for introducing rules that effectively put them out of business.

Toronto Real Estate Sales Statistics for October 2009

John Pasalis in Toronto Real Estate News

A quick summary of the Toronto Real Estate Board's sales figures for October.

The two most commonly reported figures, sales growth and price appreciation are very misleading this month.

Home sales increased by 64% to 8,476 last month.  The percentage increase is skewed by the fact that sales in October 2008 were low due to the crisis in financial markets.  But it's worth noting that 8,476 sales is still the best October on record.

The average price for a home is up 20% to $423,559.  This number is also skewed by the poor sales figures last year and by the significant increase in the number of higher priced homes that sold last month.

The important take away from today's figures is that the imbalance between supply and demand, measured by the sales-to-inventory ratio actually widened this month. 

 

We saw a slight improvement in August and September but the market moved further into seller's market territory in October.

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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Toronto Real Estate Prices up 9.4% in 4 Months

John Pasalis in Toronto Real Estate News

Toronto real estate prices increased by 9.4% in just four months according to the Teranet National Bank House Price Index.

The House Prince Index does not use average price to measure changes in house values.  It uses something called the repeat sales methodology to calculate changes in house values.  This approach requires a property to have been sold at least twice in order for it to be used in their calculations.  They take the current sale price of a particular house and compare it to the previous sale price to measure the increase or decrease in value over that period.  This approach offers a more realistic look into changes in real estate values.   You can read more about the index here.

Here is the most recent House Price Index chart for Toronto.

Toronto's House Price Index reached a low of 104 in April 2009 but increased to 114 in August, an increase of 9.4% in just four months.  Over the past decade it has taken an average of 2-3 years for Toronto home prices to increase by 9%.  If prices continue at this rate for the next eight months we'll see a 28% increase in house values in just one year.