The Real Estate Market for the First Half of 2014
Toronto’s real estate market continues to go from strength to strength in 2014. The latest report from the Toronto Real Estate Board (TREB) shows year over year growth in sales and average selling price. The main reason for this increase is a shortage of listings compared to demand for housing by home buyers in the GTA.
Sales were up by 10% to 9,198, making this the 2nd best July sales on record. The number of sales exceeded new real estate listings in the month, resulting in price growth above the rate of inflation.
The average selling price was $550,700, up by 7% compared to the same month in 2013. Detached home sales actually fared better, finishing 11% up over last year. Condominiums were up by 5.3%.
The average price of a detached home in July in the 416 area code was $880K & in the 905 area code it was $639K. The average condo price was $379K in the 416 area code, & $303K in the 905 area code. Semi-detached & townhouse average prices fell between these two ranges.
The Forecast for the Remainder of 2014
So what does the market hold for the rest of the year? Jason Mercer, TREB’s Senior Manager of Market Analysis, believes that prices will continue to increase for the remainder of the year, and should in fact continue until new listings by home sellers start to outpace sales.
Recent comments by Bank of Canada Governor, Stephen Poloz, indicate that the Bank is still neutral on mortgage rates, which in turn implies that short term rates will likely not increase until mid-2015, which is around the same time the US Central Bank is expected to increase rates. Long term 5 year rates have recently dropped again to below 3% on a discounted basis, which is an excellent rate for the 5 year product.
So for the forseeable future, with inventory of homes in short supply, rates still low, & demand as high as ever, expect prices to continue to increase in Toronto.
If you're in the market for a new home or condo, now may be the right time to move forward with your purchase, to capitalize on the low rate environment. Contact your Century 21 Toronto real estate professional for advice on the next steps. Good luck!
Ram Rajendram is a Toronto Real Estate Broker with Century 21 Harves Realty Ltd., Brokerage. He sells condos & houses throughout the GTA & assists home & condo buyers with their purchasing needs. He is also a Canadian Chartered Accountant (CA) & holds a Bachelors Degree in Economics from the London School of Economics (LSE)