Rising detached home sales pull up average price in the GTA
The bounce-back in single-detached home sales is contributing to an uptick in average price, with more than 50 per cent of neighbourhoods in the Greater Toronto Area reporting an increase in detached housing values the first half of 2019, according to a new report released by RE/MAX of Ontario-Atlantic Canada.
RE/MAX examined trends and developments in 65 Toronto Real Estate Board (TREB) districts, finding that detached home sales were up in almost 88 per cent of markets, while prices were up in 51 per cent of markets between January and June 2019, compared to the same period one year ago. The 905 area saw the greatest increase in home-buying activity, with all 30/30 areas reporting rising detached home sales, and 43 per cent of 905 communities experiencing price appreciation. Meanwhile in the 416, just 20 of the 35 districts experienced an uptick in sales, while detached home prices increased in 57 per cent of neighbourhoods.
"Detached housing is finally back on track, with year-to-date sales almost 17 per cent ahead of last year’s levels, signaling a return to more normal levels of home-buying activity,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Market share is also climbing, with detached homes now representing 45.7 per cent of all home sales in the Greater Toronto Area, up from 43.1 per cent one year ago."
While greater affordability remains the strongest catalyst in the uptick in detached home sales, RE/MAX has found that location is an equally important component, as first-time and trade-up buyers move to secure prime real estate before values are on the move again. Leading in terms of percentage increase in the average price of a detached home is E01 in the city’s east end, comprised of North Riverdale, South Riverdale, Blake-Jones and Greenwood-Coxwell, where average price rose 15.2 per cent to $1,378,987.
Second place was claimed by downtown Toronto’s C01 area, which includes Trinity-Bellwoods, Palmerston-Little Italy, Niagara, Little Portugal, Kensington-Chinatown and Dufferin Grove, boasting a 12.8-per-cent increase in average price, bringing values to $1,953,511. Perennial favourite blue chip neighbourhood Leaside and Thorncliffe Park ranked third with an 11.2-per-cent increase in detached housing values to $2,193,747. Rounding out the top five are Scarborough’s E04 (Dorset Park, Wexford- Maryvale, Clairlea-Birchmount, Ionview and Kennedy Park) where price climbed 7.8 per cent to $836,585; and Toronto’s W02 (Junction, High Park North, Runnymede-Bloor West Village, Lambton-Baby Point and Dovercourt-Wallace Emerson-Junction) rose 7.1 per cent to $1,410,057."
Year-to-Date Average Price
According to TREB Market Watch, all five neighbourhoods were in clear seller’s market territory in June, characterized by low inventory levels and in some instances, bidding wars. The sales-to-active listings ratio ranged between 62.5 per cent in C01 to a high of 88.8 per cent in E01.
Despite strong demand in these hot-pocket areas, approximately 45 per cent of districts within the 416 are in a technical buyer’s market, with a good selection of homes listed for sale. RE/MAX also found that select neighbourhoods north of Bloor offered greater flexibility in terms of negotiation – this is especially true when average price topped $2 million – while market conditions were tightest south of Bloor Street.
“Heated demand clearly exists for single-detached housing south of Bloor Street, but there are pockets throughout the 416 that are scorching hot,” explains Alexander. “The Oakwood-Vaughan area in C03, where homes can still be had for just over the $1 million price point, is one of those neighbourhoods, while C10, comprised of Sherwood Park, Mount Pleasant West, Mount Pleasant East, is another. The Junction Area, High Park North, and Runnymede-Bloor West Village (W02) in the west end and Leslieville (E01) and the Beach (E02) in the east are also highly sought-after, with close proximity to transportation and vibrant shopping avenues the common denominators drawing younger buyers.”
Year-to-Date Unit Sales
Top performers in terms of unit sales were markets offering single-detached homes under the $1 million price point. Scarborough’s L’Amoreaux, Tam O’Shanter-Sullivan, Steeles neighbourhood (E05) saw the most significant upswing in terms of percentage increase in sales, with the number of homes sold up 76.2 per cent to 148 units.
Milliken, Agincourt North, Agincourt South and Malvern West (E07) ranked second, with a 57.1-per-cent increase and 132 sales, while Yorkdale-Glen Park, Briar Hill-Belgravia, Brookhaven-Amesbury, Weston, Maple Leaf, Rustic, Beechborough-Greenbrook, Mount Dennis, Humberlea, Pelmo Park (W04) in the west end reported a 50-per-cent gain to 204 units sold. Simcoe County’s Essa reported a 43.6-per-cent increase in sales of 168 units, while Downsview-Roding-CFB, Glenfield-Jane Heights, Black Creek, Humbermede, York University Heights, and Humberlea-Pelmo Park ( W05) in the west end rounded out the top five with a 37.1-per-cent increase in sales to 144 units.
With an average price of $1,380,253 for a detached home, York Region’s Richmond Hill ranked sixth, up 36.1 per cent to 615 sales. The north end of the GTA appears to be in recovery mode, having been particularly hard-hit in the correction. Savvy first-time buyers looking for the best deals in the GTA are likely to find them in York Region, where the dollar seems to stretch further.
“With recovery well underway in the detached housing segment, the residential real estate market is starting to fire on all cylinders,” says Alexander. “The possibility of more relaxed mortgage rules down the road – in conjunction with today’s low interest rate environment – may serve to spark up the GTA housing market yet again.”
Source: Re/Max Blog
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