According to the new report by «Toronto Real Estate Board» average price of a condo in GTA passed well above $500,000.

Now what? Who must be blamed? Investors? Speculators? Or non-residence buyers? Who must pay the next tax? Out of 54,813 total resale transactions reported by TREB in the first half of the year 15,474 condo units changed hands. Knowing that most of the pre-construction condo sales are not reported on MLS, the condo share is more than 35% of market activities. Despite the recent decline in overall sales, condo market was resilient compare to low-rise market. Now condo is no more affordable for a family with an average income in GTA.

The table below is part of the TREB’s report for second quarter of the year, when the new «housing fair plan» from Ontario Liberal government for cooling the market down has been in effect.

In the city of Toronto the average price of a condo is well over $566,000.

And here is part of TREB’s most recent report regarding rental market:

“It is clear that we continue to suffer from a lack of available rental units. The Fair Housing Plan announced by the Government of Ontario committed to measures designed to increase housing supply. Conversely, the Fair Housing Plan also expanded rent controls, which could preclude investment in rental properties, thereby further constricting supply. With different policy components potentially at odds, it will be interesting to see the eventual impact of the Fair Housing Plan on the rental market in the GTA,” continued Mr. Syrianos. The average one-bedroom condominium apartment rent was up by 8.8 per cent year-over-year in the second quarter to $1,861 per month. The average two-bedroom rent was up by 8.7 per cent to $2,533.

The graph below shows the new homes price changes. Price of new condos started catching up since 8 months ago after years of being almost flat.

Is it a right time for municipalities & provincial governments to understand the demand, reduce the construction costs & charges, encourage building new homes to increase the supply and creating job opportunities? Or inventing a new tax & blame purchasers to eliminate the demand?

I’m not a politician, so I don’t get it!

July 20, 2017 – Greater Toronto Area REALTORS® reported 2,670 residential transactions through TREB’s MLS® System during the first 14 days of July 2017. This result was down 39.3 per cent compared to the same period in 2016. The greatest year-over-year decline in sales was noted for the detached market segment. The lowest annual rate of decline was noted for the condominium apartment market segment.

 The number of new listings entered into the system was up by 6.5 per cent year-over-year. While still up compared to last year, the annual rate of growth for new listings has declined markedly, from over 40 per cent in mid-May, and over 20 per cent in mid-June, to less than seven per cent in mid-July.With sales down and new listings up year-over-year, the market was better supplied compared to last year. This translated into a more moderate 6.5 per cent annual growth rate for the average selling price, which was $760,356 for all home types combined. When breaking down average price growth by geography, an interesting dichotomy has developed between the City of Toronto and the surrounding ‘905’ area code regions for some market segments.

The annual growth rate for the average detached price in the ‘416’ area code was 12.1 per cent, compared to 2.7 per cent for the ‘905’ regions. The annual growth rate for the average condominium apartment price was 30.5 per cent in the ‘416’ area code versus 12.4 per cent in the surrounding ‘905’ regions.

The table below is part of report regularly being released by-weekly by Toronto Real Estate Board.

First line is about detached homes showing steady and strongly price appreciation in recent years, detached homes have been on demand for years, as many home owners enjoy having a backyard while investors like having more land.

What I believe is that the population of mother earth is increasing constantly yet the size of our planet is not expanding accordingly! So the land per capita is going to be less and less, thus the value of the land goes up and up.

On the other hand government and cities are not encouraging people to own detached homes. It’s not easy for cities to provide services like water, sewer, gas, electricity, etc. to many detached houses compared to a condo complex. This is of course despite the fact that a detached home still can be a better long-term investment for the owner.

But the most interesting part of Treb’s report for me is the last line of the table where Condo market is a strong segment of the market. Whether it is about affordability or changing life styles condos are getting high in demand in today’s housing market. Young professionals love living in or close to the city core having an active life and hating long commutes to work. Shovelling winter snow and mowing lawns is not for them!

Please look at the below table, numbers talk themselves.