The Toronto residential resale market set a new record for sales in July. It appears that there are no more seasonal slowdowns. Almost 10,000 properties were reported sold in July, a month when historically both buyers and sellers took vacations and the number of sales dropped noticeably. Not this year. With 9,989 properties changing hands, Toronto and area realtors were responsible for the best result on record for the month of July. Last July 9,813 properties were reported sold, almost 2 percent fewer sales than this year.
The big story as we approach the halfway mark of the summer is the depletion of inventory of available properties for sale in the greater Toronto area. Inventory levels in Toronto, including condominium apartments, have reached dangerously low levels. In July only 13,542 properties became available for sale. This compares to 14,625 properties that became available in July 2015. The combined impact of declining numbers of new properties coming to market and high sales volumes sees the greater Toronto area resale marketplace limping into August with only 11,346 active listings, fewer than the total numbers of sales reported for each of the months of April, May, and June. By comparison, there were 16, 673 properties available for sale in July of 2015, an eye-popping 31.9 percent decline.
Last year there were 1.9 months of inventory in the greater Toronto area, and 2.2 months of inventory in the City of Toronto. By this July, the months of inventory were reduced to 1.4 and 1.8 months, respectively. There are trading districts where the months of inventory are even lower. For example in the eastern districts, there were two trading areas where the months of inventory were less than one month, the second consecutive month in which this has happened. These districts are the popular Riverdale, Leslieville, and East York. Without overstating it, if this trend continues there simply won’t be properties for buyers to buy.
It comes as no surprise that under these conditions sales are taking place at lightning speed, and for prices that only a year ago would have been seen as impossible to achieve. All sales in July for the greater Toronto area took place in only 15 days. There is probably no other marketplace in the world in which properties sell as quickly as Toronto, even in Vancouver. Last year it took 19 days, a decline of over 20 percent. There are some districts, particularly in the eastern trading districts, where sales took place even faster. In these districts detached homes sold in 10 days and semi-detached properties in only 8 days on average. These are sellers’ markets as never seen before, resulting in constantly increasing average sale prices.
In July the average sale price came in at $709,825, a 16.6 percent increase compared to the average sale price of $608,875 achieved in July last year. Once again almost every trading district (except two) produced average sales prices that exceeded the listing price, in some cases by more than 110 percent. List prices have become merely “suggested” prices and have no connection to the sales price that sellers hope to achieve. With only 1.4 months of inventory, that is not surprising. A balanced marketplace, something we have not seen in Toronto since the 90’s (except for the short recession in 2008 to early 2009), is at least 3 months of inventory.
Condominium apartments, which were the Toronto market’s only plentiful source of housing inventory are also disappearing. In July there were 3,307 active condominium apartment listings. That number represents more than a 32 percent decline compared to the 4,924 active listings available to buyers last year. This lack of inventory of condominium apartments resulted in a 9.2 percent increase in sales and an 8.2 percent increase in the average sale price of condominium apartments in July. The average sale price for condominium apartments in the City of Toronto is now $427,074. In the city’s central districts, the average sale price for condominium apartments comes in higher at $472,622. Almost 70 percent of the city’s condominium apartments are concentrated in Toronto’s central districts.
On a year to date basis, 70,098 properties changed hands in the greater Toronto area by the end of July. This compares with 64,110 properties sold to the end of July in 2015. At this pace by year end the market should produce about 109,000 property sales, smashing last year’s record of 101,212 sales.
Early indications in August point to another strong month. August sales are coming in at about 260 to 270 daily. Projected August sales should total about 8,700 properties sold. Last year 7,943 properties were reported sold in August.