Toronto Real Estate Summer Market Ends By Favouring Home Buyers

The swing back to a balanced Toronto real estate market finally was achieved in August when 6,318 sales resulted in a middle-of-the-road 25.2% ratio of sales-to-listings.  This is down from a strong seller’s market in August 2007 when that same ratio was 42.1%.  Poor economic news coupled with some sunny weather (finally) combined to keep Toronto home buyers away from the table.

The big bonus to this is that home buyers are now having to cope with multiple offers in fewer instances and are finally able to negotiate somewhat with sellers on a one-on-one basis.  The Toronto Real Estate Board listing inventory remains high with 25,076 houses and condos being offered for sale – up 23.7% from August 2007.  This gives purchasers a lot more choice and has a flattening effect on overall prices.

These stats place us back at the 2004 level in terms of number of Toronto real estate sales this year to date and back to the year 2000 for the sales-to-listings ratio.  The average sale price YTD however has maintained a positive slope with prices up about 1% from August 2007.

As is understandable from a viewpoint of affordability, Toronto condominium sales during the month of August took a 34.0% market share – the highest since December 2002 except for the one month of December 2007!

Expect this trend to continue… higher gas costs, very convenient locations and more affordable purchase prices will allow condominiums to keep Toronto on the map as the largest real estate market for this type of home ownership of any city in North America.  The average price per square foot for a Toronto condo is $396.  A recent comparison of moderately upscale 1-bedroom suites in Toronto vs Calgary and Vancouver resulted in Toronto being $456 per sf, Calgary being $528 and Vancouver being $739.

Similarly on the ‘prime’ and ‘super-prime’ condo markets, Toronto came in #13 at $800 and $1,400 per sf respectively compared with #5 New York at $2,550 and $6,000 respectively and #1 London with $6,200 for ‘prime’ and $11,800 per sf for ‘super-prime’ suites.  Comparatively speaking, the Toronto condominium lifestyle is very affordable on the world market and equally attractive within Canada.

Good news from down south – slowly but surely the Americans are getting their act together.  Sales volumes in the USA were up in August while foreclosure inventories remained high.  The US Government’s recent takeover of Freddy Mac and Fanny Mae will help to provide a stable buyer of home mortgages, thereby providing liquidity to what has been a tight hard-to-get financing marketplace for all but the most qualified buyers. 

Expect the US real estate market to take another 12 months to stabilize and with that, an increased level of consumer confidence and a rejuvenated economic outlook which will spill over into our Canadian economy.

To read the full Toronto Real Estate Board August Market Report, click here

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