Toronto Real Estate News/Market Update

Sales and New Listings Down, Average Price up in July

Greater Toronto REALTORS® reported 6,564 sales in July – a 34 per cent dip from the record 9,967 sales reported in July 2009. New listings, at 10,825, dropped to the lowest level for the month of July since 2002.

The level of July sales remained below the expected long-term trend. The market has become more balanced following record monthly sales through most of the winter and early spring.

Total sales through the first seven months of 2010 were up 12 per cent compared to the same period in 2009.

Notwithstanding the fact that price trends vary at the neighbourhood level in GTA, the average price for July transactions was $420,482, representing a six per cent increase over July 2009. Over the first seven months of 2010, the average selling price was up 12 per cent annually to $432,253.

Market conditions promoting growth in the average selling price have remained in place. While July sales were down compared to last year, the number of new listings in the marketplace also fell. This means there was enough competition between buyers to exert upward pressure on price.

Source: Toronto Real Estate Board

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Summary of July Toronto MLS® Sales and Average Price 2009 - 2010

Sales & Average Price By Home Type

Source: Toronto Real Estate Board

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TREB MLS® Average Resale Home Price

Monthly with Three Previous Years for Comparison

TREB MLS® Sales

Monthly with Three Previous Years for Comparison

Source: Toronto Real Estate Board

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Federal Government Changes Mortgage Rules

The federal government has announced changes to the rules for government-backed insured mortgages (less than 20 percent down payment) as follows:

• All borrowers will be required to meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter terms.
• Reduced maximum amount that can be withdrawn in refinancing a government-backed insured mortgage to 90 per cent from 95 per cent of the value of the home.
• Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner occupied properties purchased for speculation. Borrowers purchasing owner-occupied residential properties will still be able to access government-backed mortgage insurance with a 5 per cent down payment.

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," said Minister Flaherty. "If some lenders aren't willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families."

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.

Additional detail is available here.

Source: Toronto Real Estate Board

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Toronto Real Estate Board: Rental Market Report

Rental Transactions Up Again

An Analysis of September 1, 2009 - December 31, 2009

From September through December 2009, TREB Members reported 3,859 lease transactions for condominium apartments and townhouses through the Multiple Listing Service (MLS®) – up 12 per cent from the 3,433 recorded during the same time in 2008. Condominium apartment transactions which accounted for over 90 per cent of the total, were also up by 12 per cent.

The weighted average rent across all apartment types and all TREB districts for the last four months of 2009 was $1,667 - in line with the 2008 weighted average of $1,672. This reflected the fact that average rents for the two most popular apartment categories moved in opposite directions, with a one per cent decrease for one-bedroom apartments and a one per cent increase for two bedroom apartments. At the district level, rent changes were quite mixed, in some cases changing at rates above or below the GTA average.

Owners of rental condominium apartments have had to consider changes in the supply and demand sides of the condominium rental market when setting rents over the past year. According to CMHC, the average condominium apartment vacancy rate increased from 0.4 per cent to 0.8 per cent between 2008 and 2009, with the stock of rented condominium apartments increasing by over 6,900 units1. While the condominium apartment vacancy rate is still substantially lower than the vacancy rate for purposebuilt rental apartments. The increase was still indicative of increased supply in some sectors of the rental market. Factors leading to increased vacancies included the strong growth in home ownership demand in the second half of 2009 coupled with strong condominium apartment completions2, which would have included investor-held units to be rented out.

A steep increase in rental listings explains the year-to-year decline in rents. At the end of August, 9,781 rental condominium listings appeared on the TorontoMLS system, a 51 per cent increase over the 6,482 listings available at the end of the May-August 2008 period.

Rental Transactions

Central Area 

• Central area districts led the way for leased transactions in the last third of 2009, with 2,162 leased condominium apartments reported. Of these 1,251 were one-bedroom apartments, and 774 were two-bedroom units, which leased for an average of $1,540 and $2,174 per month respectively. Average one bedroom rents were down one percent; average two bedroom rents were up two per cent.
• There were 70 condominium townhouse rentals in the Central area. Of these, 27 were three-bedroom units, which rented for an average of $2,725 per month, down five per cent.

East Area 

• In TREB’s East districts, Members reported a total of 296 condominium apartments rented. The majority of these rentals were one and two bedroom units, with130 and 146 units rented respectively. One-bedroom apartments rented for an average of $1,259 per month, up three per cent from the same period last year. Twobedroom apartments rented for an average of $1,501 per month, the same as last year.
• There were also 41 town homes leased in TREB’s East districts. Over half of these (28) were three-bedroom units, which rented for an average of $1,392 per month, down one per cent from 2008.

North Area

• The majority of condominium apartments leased within the North area (346 in total) during TREB’s last reporting period were one and two-bedroom units. One-bedroom apartments rented for an average of $1,318 per month, down three per cent from last year. Two-bedroom apartments rented for an average of $1,703 per month, a two per cent drop from the last four months of 2008.
• During that same reporting period, 45 townhouse units rented in TREB’s North districts. The most common were three-bedroom units (31 transactions), which rented for an average of $1,788 per month, up nine per cent from last year.

West Area

• TREB’s West area remained the second most active (after the Central districts) for condominium apartment rentals, with 737 units renting over the past four months. One-bedroom units rented for $1,296 per month, a three per cent decline from the $1,332 recorded in 2008. Two bedroom units leased for an average of $1,640 per month, up two per cent from last year’s $1,611.
• TREB’s West area led the GTA in the rental of condominium townhouses, with 162 deals in total. Of these 115 were three-bedroom units, which rented for an average of $1,563 per month a one per cent increase over last year.

Source: Toronto Real Estate Board

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