Sales across the Greater Toronto Area rose by 2.5% to 8,200 in September, keeping the city on track for a record breaking 2015 for home sales. The average selling price for all type of homes across the GTA, including condominiums, increased to $627,395, up from $574,424 when compared to this time last year.
As Jamie Sturgeon of Global News reports, this latest average price increase can be attributed to “the low-rise market segments” (single-family homes), as well as detached and semi-detached homes. The average price of a detached home in the metro area hit $1.05 million last month. The average condo price rose to $418,603 in the “416” region, up 10.7% and 5.6% respectively when compared to September 2014.
September saw a record number of home sales transactions in the GTA. According to TREB, there were 8,200 homes that traded hands last month, a record for the month of September.
Toronto Real Estate Board President Mark McLean, made a prediction in a press release:
“Barring a drastic shift in the economy over the next three months, total transactions reported by TREB Members in 2015 are expected to be at or near the 100,000 mark.”
The recent TREB data also suggests that the supply of homes is falling behind demand, with the total number of active listings at the end of September being lower than it was at the same time a year ago.
“This … suggests that competition between buyers will remain strong as we move into the fourth quarter,” according Jason Mercer, TREB’s director of market analysis.
Both Sturgeon and Garry Marr of the Financial Post points out an interesting observation, noting that the price of detached homes is escalating at a pace far faster than all other categories of homes, creating a price gap that is troublesome. Such market conditions make it next to impossible for small families living in a condo to upgrade to a home with its own backyard.
Sal Guatieri, economist at BMO, argues that this gap reflects “a consequence of land restrictions,” and that “Toronto home buyers and condo dwellers bemoan the widening chasm between single-family and condo prices.” According to his estimates, the price gap between a condo and a detached home in Toronto has doubled since 2009, up to $332,400.
And just how many potential first-time buyers might this affect? A survey released by local Toronto brokerage Re/Max Hallmark Ltd. found that over the next 18 months in the GTA, 38% of buyers will be of the first-time variety. That’s over 1 in 3 potential home buyers that may not be able to come up with the money to make their home purchasing dreams come true. According to the same survey, those first-time buyers will make an average down payment of roughly 22% of the home’s total value, a figure also estimated to average around $455,000.