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Baby, we got a bubble!?

Average price of detached home in Toronto hits $1.15M
By: Susan Pigg Business Reporter, Published on Wed Jun 03 2015

The GTA is in the midst of a record-setting frenzy for real estate.

The region set a new record in May for sales, right on the heels of a record-smashing April, according to figures released Wednesday by the Toronto Real Estate Board.

Prices also continued their unrelenting climb skyward: The average selling prices of houses and condos combined climbed 11 per cent last month, year over year, to $649,599. That’s up from $584,946 just a year ago.

The MLS Home Price Index Composite Benchmark was up just 8.9 per cent, however, reflecting the fact that the city is seeing more sales of high-end homes than it did a year ago, which are skewing average sales prices upward.

The big problem remains listings, which remain so far behind demand they continue to play out in bidding wars and bully bids among frantic buyers which have catapulted house prices to almost unthinkable levels – an average of $1.15 million for a detached house in the City of Toronto in May, up a stunning 18.2 per cent just in the last year.

Sales of that highly sought after housing type were down six per cent last month, though, largely because there aren’t enough for sale, and they’re now well out of reach of most buyers.

“With no relief so far on the listings front, expect similar rates of price growth as we move through the remainder of 2015,†said TREB senior market analyst Jason Mercer in a statement. “At this point, a number of months where listings growth outstrips sales growth would be required to satisfy pent-up demand.â€

But that’s highly unlikely to happen in a market where baby boomers are largely staying put and opting to renovate at the same time that the great buying bulge of their now-grown children, the echo boomers, are moving into their prime home-buying years.

Their impact continues to be felt in the condo market – the only realistic housing choice left for most young buyers in this hot market. Sales of condos surged by 13.2 per cent across the GTA in May and prices climbed a healthy 5 per cent, defying the skeptics who continue to voice concerns that too many units are being built.

So far, at least, the number of young buyers and renters has largely kept pace with all the new supply. In fact, condos saw the biggest increase in sales in May of all housing types, according to TREB’s monthly figures.

Sales of detached homes were up just three per cent in May across the GTA, with a 6.4 per cent increase in the 905 regions countered by a 6 per cent decline in single home sales in the 416 region, again, largely because of supply and affordability.

Detached prices were up 13.6 per cent in the 905 regions, to an average of $735,915, compared to Toronto’s 18.2 per cent climb in prices to an average of $1.15 million.

Semi-detached home sales were up 6.8 per cent across the region, with an almost 11 per cent surge in sales in the 905 regions compared to a 0.4 per cent increase in sales in the City of Toronto as buyers seek safe havens in this real estate storm.

The average price of a 416 semi was up 13.7 per cent in the 416 region to an average of $779,523 and up 11 per cent in the 905 regions to $493,194, says TREB.

Townhouse sales were up 7.5 per cent across the GTA. Average sales prices were up 10.2 per cent in the City of Toronto, to $555,052, while a similar 10.9 per cent increase in townhouse prices in the 905 regions saw average sale prices hit $449,705.

Condo sales were up 13.2 per cent across the GTA, with sales increases of almost 13 per cent in the City of Toronto and 13.8 per cent in the 905 regions.

Average sale prices were up 5.5 per cent in the 416 region to $422,947 and up 3.9 per cent in the 905 regions to $319,639.

Active listings – the total number of houses for sale – were down 10.1 per cent in May across the GTA, year over year, as new listings decreased by 0.8 per cent.

Even the number of days houses sat on the market declined, by 14.3 per cent, to 18 days compared to 21 days a year ago.

A similar scene is playing out in Canada's other hot housing market, Vancouver, where house and condo sales combined were up 23.4 per cent in May – 16.7 per cent above the 10-year historic average – although down 2.9 per cent from April.

The MLS benchmark price for a detached in Greater Vancouver was up 16.3 per cent from last May, to $1.4 million. But median prices climbed by more than 25 per cent in some prime neighbourhoods, such as Vancouver West, where the median sale price of a detached home was almost $2.89 million in May.

http://www.thestar.com/business/2015/06/03/average-price-of-detached-home-in-toronto-hits-115m.html
 
Here's a more specific breakdown of sales figures in Toronto for the month of May 2015.

Detached HomesAverage PriceMedian Price
Toronto West$848,450$726,000
Toronto Central$1,731,988$1,450,500
Toronto East$755,258$678,000



Condo ApartmentsAverage PriceMedian Price
Toronto West$330,934$302,000
Toronto Central$492,100$398,890
Toronto East$269,187$250,050
 
It's pretty eye-popping to note that detached single family homes in the 416 had 6% fewer number of sales year over year while exhibiting an average price increase of 18.2% as compared to same time last year! Those are some really big numbers.
 
It's pretty eye-popping to note that detached single family homes in the 416 had 6% fewer number of sales year over year while exhibiting an average price increase of 18.2% as compared to same time last year! Those are some really big numbers.

It makes sense. The scarcity and growing demand is sending prices to the sky.
 
I think the biggest indicator of the health of the Toronto market I've seen in recent months was when the new townhouses in Keewatin and Mt. Pleasant (the ones where #DensityCreep are making a big deal of) were all sold within 12 hours.
 
I think the biggest indicator of the health of the Toronto market I've seen in recent months was when the new townhouses in Keewatin and Mt. Pleasant (the ones where #DensityCreep are making a big deal of) were all sold within 12 hours.

It was impressive indeed and only goes to show that people want options. While condo apartments in high-rises are essential to the core, offering a product that fills that middle ground in terms of price, size, neighborhood and lifestyle is really going to gain traction.

Here are the Toronto Central condo townhouse figures for May 2015 to get an idea of what the price points are in the Toronto central neighborhoods.

Condo TownhousesAverage PriceMedian Price
C01$614,692$554,750
C02$744,450$575,000
C04$490,000$490,000
C06$530,000$530,000
C07$534,444$507,000
C08$670,375$602,500
C10$781,667$795,000
C11$352,067$402,000
C12$940,236$859,000
C13$627,167$679,250
C14$561,672$498,300
C15$486,006$500,000
 
The longer the rates hold steady at these low levels, the bigger the catastrophe later in the future is the general consensus from all these scare articles
 
Amazing that Fortress Development/Capital can lose investor money even when the housing market is red-hot. What would happen in a downturn?

http://www.cbc.ca/news/canada/manit...er-has-yet-to-erect-single-building-1.3097686

CentreVenture has put redevelopment hopes for the St. Regis Hotel in the hands of Fortress Real Developments, a company with five more projects across three provinces where not one ounce of concrete has been poured and none have started construction. Fortress is developing five projects — one in Saskatchewan, three in Ontario and another in Manitoba. A closer look at the projects reveals none have started construction and not one has a current building permit.

This comes after former Fortress partner Mady Development filed for creditor protection due to problems with sub-trades and bad weather. The move comes despite selling all 82 condos and leasing more than two-thirds of the office and retail space.

More than $50 million is owed according to Jonathan Kreiger, the court appointed monitor from Grant Thornton LLP. Laurentian Bank is owed $30 million. Fortress is the second secured creditor with $16.9 million owing. The city of Barrie is owed $3.5 million.

"We are waiting for the outcome of the sales process, and we hope there is a good resolution for the stakeholders of the project," said Krieger, adding bids for the partially built building will be reviewed in mid-June.

On its website, Fortress said it is working on a strategy during the Mady creditor protection "with the ultimate objective of protecting investor principal and completing the project."

I guess the Fortress shill like Ben Myers won't be coming around here anymore? Hopefully this press means less people will be tricked into investing into their shoddy investment products and developments.
 

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