Toronto November TREB report

Toronto Market Conditions Tighten This November

By: Zoocasa

Supply issues have plagued the Toronto real estate market for years, and the Toronto Real Estate Board (TREB) cites it as one of the primary reasons home prices continue their seemingly irrepressible growth.

Last November saw a surge of inventory – 14,349 new listings amid a rush to capitalize on the buying frenzy resulting from the new mortgage lending rules hitting the province in January.

This increase in properties dampened prices from November 2016 by 2 per cent.

But this November new listings fell over 26 per cent to 10,534 – almost exactly back to levels from November 2016. At the same time, sales fell only 14.7 per cent to 6,251.

Few Listings Squeeze Buyers

As long as sales are more robust than inventory, or in other words, demand exceeds supply, prices will continue to rise.

Indeed, home prices edged up 3.5 per cent to $788,345 across the Greater Toronto Area.

TREB already predicted this during the summer: Jason Mercer, director of market analysis said in TREB’s August report that, “We only have slightly more than two-and-a-half months of inventory in the TREB market area as a whole and less than two months of inventory in the City of Toronto. This means that despite the fact the sales remain off the record highs from 2016 and 2017, many GTA neighbourhoods continue to suffer from a lack of inventory. This could present a problem if demand continues to accelerate over the next year, which is expected.”

Toronto Still a Balanced Market

Still, Toronto remains balanced, but it could easily tip toward sellers’ territory soon. When that happens, we are likely to see more bidding wars, less conditions included in offerings and stressed out prospective buyers.

Many neighbourhoods in the City of Toronto now show a sales-to-new listings ratio above 60 per cent, the cut-off where a market turns from balanced to sellers.

Already, the popular, family-friend neighbourhoods of High-Park, Junction and Roncesvalles show sales-to-new listing ratios above 70 per cent – heavily advantaged toward the seller.

Only a single Toronto neighbourhood is advantaged toward the buyer, Lawrence Park North and St. Andrew-Winfields in North Toronto, with a ratio of 32 per cent.

If we don’t see heavy increases in supply soon, either through development or listings, prices are likely to continue to rise through 2019. The average price of condos for sale in Toronto hit $595,678, up 7 per cent from last November.

Want to see price and sales details for each property type across the GTA? Check out the infographic below.

toronto-home-sales-nov-2018-treb-zoocasa 

Zoocasa.com is a real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse the website or the free iOS app.

Ontario Land Transfer Tax

The Best and Worst Cities in Ontario for Land Transfer Tax

By: Zoocasa

As your home purchase closing draws nearer, most of the stress and anxiety dissipates as you take the final steps towards homeownership. The same can’t be said for your wallet, however, as you’re then faced with numerous closing costs that need to be paid before your transaction is complete, with the largest being land transfer tax.

This tax, which is charged by the province, (with the exception of Ontario where the City of Toronto has its own additional tax), is determined based on the total purchase price of the property, and unlike the mortgage, it must be paid in cash.

Tax Amount Ranges by Average Home Price

Since land transfer tax is so intertwined with the home property price, it will increase and decrease alongside average home prices. As a result, land transfer tax will vary across Ontario’s major housing markets. For example, a buyer in the city of Toronto will be faced with an LTT of $27,521—which adds up to an additional 3.2% of the total home price, based on the September 2018 average of $864,275.

To compare, a home buyer in Sault Ste. Marie, where home can be purchased for an average of $164,853, will only pay $1,374 in tax upon closing, which is only 0.8% of the total purchase price.

Buyers in mid-price Ontario markets will expect to pay between $5,000 to $7,000 on LTT. For Instance, the tax on Ottawa homes for sale, would come to $5,467 on an average home price of $449,613. Compared to the tax on Greater Toronto Area houses for sale, the mid-price markets are much more affordable options if you are willing to go outside of the city limits.

However, note that the amount of tax jumps sharply as you move closer to the City of Toronto; a homebuyer in Mississauga will pay $11,173 in land transfer tax based on the average price of $734,901.

Repeat Home Buyers Hit the Hardest

As an incentive for first-time home buyers, there are sizable rebates that help to take a good chunk out of the LTT: $4,000 from the province, with an additional $4,475 if you live in the city of Toronto. Also note that first-time home buyers purchasing a home valued at less than $368,360 effectively pay no LTT, a scenario that can occur in six markets across the province: Sault Ste. Marie, Thunder Bay, North Bay, Sudbury, Windsor-Essex, and Kingston.

Because LTT can potentially add tens of thousands of dollars to the buyers’ real estate bill, it is important to take this into consideration when budgeting for your home purchase. This can be challenging for buyers in the hot markets, as they must save for longer to have that cash on hand; Something that buyers in moderate markets don’t have to worry as much about.

Check out the infographic below to see how LTT differs across Ontario:

zoocasa-ontario-land-transfer-taxes-by-city

Toronto October numbers

Housing Prices Set to Rise in Toronto, Reveals TREB’s October Report

By: Zoocasa

The shaky first half of 2018 is officially over, with home sales and prices both edging upwards for the fifth month in a row this October, according to the Toronto Real Estate Board (TREB).

TREB reported 7,492 sales through MLS in October 2018 in the Greater Toronto Area, a 6-per-cent increase year over year. At the same time. The average property price rose 3.5 per cent to $807,340.

Less Choice for Buyers

TREB expects prices to continue to rise in the future because inventory is so low and sellers are slow to list their homes – new listings softened 2.7 per cent to just 14,431.

“Annual sales growth has outstripped annual growth in new listings for the last five months, underpinning the fact that listings supply remains an issue in the Greater Toronto Area,” said Jason Mercer, director of market analysis for TREB. “While the OSFI stress test and higher borrowing costs have kept sales below 2016’s record pace, many households in the Greater Toronto Area remain upbeat on home ownership as a quality long-term investment.”

Slowing Demand Remains a Risk

The only thing that may deter the Toronto’s housing market’s seemingly unstoppable rise is slowing demand. A large factor behind this is shrinking mortgage affordability, as rising interest rates squeeze buyers’ budgets.

The Bank of Canada has already raised rates five times since last year, with the most recent increase in October. It’s too early to see if that has had any impact on sales, but it’s unlikely seeing as borrowing rates are still below 3.5 per cent, which low compared to the historical average. However, the Bank of Canada has indicated they will continue to raise rates in the near-future. Should interest rates rise a percentage point or more that will add hundreds of dollars of extra carrying costs to a monthly mortgage that may deter buyers from purchasing (or force sellers to list).

Tougher Mortgage Hurdles to Come

OSFI, the federal banking regulator, instituted a stress test this year for just that reason: they wanted to make sure buyers could afford carrying costs even if mortgage rates rise 2 percentage points.

At the same time, it may make it almost impossible for future prospective buyers to purchase homes for sale in Toronto if interest rates rise 2 percentage points andthey have to qualify for an extra 2 percentage points on top of that.

Still, although in theory higher interest rates should reduce demand and force prices to lower, there are many ways to get around this. Many buyers, such as foreign buyers and boomers with liquid assets , can pay cash and avoid interest rates altogether and residential buyers can avoid the stress-test by borrowing from a  credit union. Therefore, even higher-carrying costs likely won’t make prices drop.

One option for buyers in this situation is to leave Toronto altogether. Head to lower-priced regions with stable economic opportunities like Hamilton, or check out Kitchener real estate.

Another option is to choose high-density property like condo units, which remain the most affordable housing option at an average of $562,523 this October.

Either way, don’t hold out for a crash in the near-future because the current data only supports an escalating market.

Zoocasa.com is a real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse homes across Canada on the website or the free iOS app.

Toronto real estate September

GTA Housing Market Stabilizes this September

By: Zoocasa

Both home sales and prices are stable this September and slightly higher year over year in the Greater Toronto Housing market.

The Toronto Real Estate Board (TREB) recently announced that sales were up 1.9 per cent to 6,455 transactions while the average selling price for September 2018 was up 2.9 per cent year over year to $796,786.

“It is healthy to see sales and prices in many areas across the Greater Toronto Area up a bit, compared to last year’s lows,” said TREB president Garry Bhaura.

Toronto Condos See Strongest Price Growth

Those numbers, however, mask significant variances in market types, with sales of less expensive properties like condos far outpacing more expensive housing, like single-family homes.

Toronto condo prices grew 10 per cent to $570,140 while detached homes slipped 0.6 per cent to of $1,008,361. Semi-detached homes grew 5 per cent to $792,353 and townhouses  increased 4 per cent to $634,314.

Condos also experienced the strongest price growth of any home type, though the segment had the slowest sales, dipping almost 4 per cent. Meanwhile, townhouses saw the strongest sales growth, increasing 8.5 per cent. Semi-detached sales were  up 4 per cent and detached housing sales up 2 per cent. (Check out the exact details in the infographic below).

toronto-home-sales-sep-2018-treb-zoocasa

“Generally speaking, annual rates of price growth have been stronger for higher density home types in 2018, including condominium apartments, townhouses and semi-detached houses,” said Jason Mercer, TREB’s director of market analysis.

“In many neighbourhoods, these home types provide more affordable home ownership options. This is why a policy focus on increasing mid-density housing options throughout the GTA is important.”

Home Affordability Remains Steep in City of Toronto

An affordability crisis in Toronto has likely driven up housing costs in other parts of Ontario, which has captured an overflow of Toronto residents. London, Ontario real estate, for example,  is up a whopping 21 per cent year-over-year to $386,520, and up 57.9 per cent compared to five years ago, according to the Canadian Real Estate Association.

Even Ottawa real estate, which is largely independent of the Toronto market, seeing as it’s far outside a commutable distance and it’s economy is largely reliant on the public sector, has increased in price. The average sale price of a residential property sold in September was $449,613, an increase of 7.9 per cent over September 2017.

As long as interest rates remain reasonable, and economic fundamentals strong, stable price growth should continue in Toronto and other communities in Ontario.

Zoocasa.com is a real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse homes across Canada on the website or the free iOS app.

Cheaper Ontario Rents

Where Are Ontario’s Most and Least Affordable Housing Markets?

By: Zoocasa

Ontario is often thought to be the most expensive province for real estate – a perception created from the fact that it’s home to the Toronto housing market, one of the hottest in the nation.

Interestingly enough, according to recent data compiled by Zoocasa, Toronto doesn’t hold the top spot for Ontario’s most unaffordable housing market. That would actually be Richmond Hill, a residential Greater Toronto Area suburb where locals earning the median household income of $88,535—$47,962 short of the income required—would have some difficulty purchasing a home at the average price of $999,311. Comparably, a Torontonian earning the median household income of $ 65,829 would find themselves $41,282 short of the income required to purchase a home in 416.
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Toronto Property Tax

Property Tax Across Canadian Markets: How Toronto Compares

By: Zoocasa

The Canadian housing market tells different tales depending on the city; property values, and the economic fundamentals that support them, vary based on the municipality or the province in question.

While housing prices can be very diverse, so too can home ownership costs. For instance, the land transfer tax home buyers pay when they close on a property can range by as much as $20,000 depending on the market. An interesting thing to note is that the disparity can similarly be found across the nation according to a study done by Zoocasa, which compared the property tax rates in 25 major municipalities across Canada.
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Real estate taxes

August Home Sales and Prices Improve, Raising Overheating Fears

By: Zoocasa

The Toronto Real Estate Board reports that the housing market is finally starting to recover from the storm caused by last year’s policy and mortgage changes – to the extent that it has prompted concerns of overheating demand.

Compared to August 2017, data from this August reports slight improvement across all TREB regions. At an average price of $765,270, 6,839 homes for sale in Toronto have exchanged hands, a year-over-year increase of 4.7% and 8.5%, respectively. The MLS Home Price Index, used to keep track of the overall value of the market, rose 1.5%, reflecting a greater proportion of higher-priced detached home sales.

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TREB Data appeal comes to an end

Supreme Court of Canada Won’t Hear TREB’s Appeal to Keep Sold Data Private

By: Zoocasa

The Supreme Court of Canada announced this August that it will not hear the Toronto Real Estate Board’s (TREB) appeal to keep past sold data for Toronto homes for sale proprietary.

TREB fought a lengthy battle to keep such information private, losing two other court battles in 2011 and 2016, and now, finally, has no choice but to share information which includes past asking and selling prices, realtor commissions and the number of times a home has been listed.

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What are property taxes?

What is Property Tax?

By: Zoocasa

Property taxes are an important consideration for home buyers, as this levy is a carrying cost that must be paid each year, and will increase or decrease along with the home’s value.

These taxes are collected by the municipality in which you live, and are used to fund a number of infrastructure and service needs at both the city and provincial level; in fact, property taxes account for $19 billion dollars in revenue for the province of Ontario.
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