GTA home sales truly hit one out of the park

Up to 100,000 expected to be sold this year, with higher prices not deterring buyers

Neither the Blue Jays’ winning streak nor Stephen Harper’s losing streak managed to distract frantic homebuyers across the GTA as sales set a record for the month of October and the region remains on pace to see more homes change hands by the end of 2015 than ever before.

If the pennant race and federal politics had any real effect on the real estate market, it may have been on the number of homes listed, with the total number of for sale signs down 7.5 per cent in October compared with a year ago, according to figures released by the Toronto Real Estate Board (TREB) Thursday.

The average sale price of a home — lowrise houses and condos combined — was up 7.3 per cent in Octo- ber, year over year, to $630,876. That’s up from $587,945 last October. But the MLS Home Price Index Composite Benchmark price — considered by TREB to be a more accurate reflection of price growth because it factors out sales at the extremes — was up 10.3 per cent, year over year.

The unrelenting demand for lowrise homes — in the face of listings that have remained unusually low since the 2008 recession — continued to be the major driver of highprice growth in Toronto, as it has been in Vancouver.

The two Canadian markets show no signs of slowing down as prices catapult further out of reach of the average buyer. Fuelling demand, despite sky-high prices, continues to be low interest rates.

But TREB warned the Ontario government could throw cold water on a provincial market that also remains extraordinarily hot — especially in cities surrounding the GTA such as Hamilton, Barrie and the outlying regions — if it gives cities the power to implement their own land transfer tax, in addition to the existing provincial tax.

That second tax, which now only exists in Toronto, has been blamed for pushing house prices further out of reach and affecting sales. A Toronto homebuyer will pay a total of $10,200 in land transfer taxes on a $450,000 home: $5,475 in provincial land transfer tax and $4,725 in Toronto land transfer tax.

Municipal Affairs Minister Ted McMeekin said recently the additional tax is one item on the table as a new revenue source for cashstrapped municipalities.

The effect of the shortage of houses for sale can be seen in the October numbers. Sales of detached homes were down 9.7 per cent in the Toronto, year over year, and prices were up 12.5 per cent, to an average of $1.07 million.

In the 905 regions, detached sales were up 2.4 per cent and the average sale price was $734,745.

Townhouses, the new go-to form of lowrise housing as even semi-detached homes continue to soar out of reach, also saw declines in the city as demand continues to outstrip supply. Townhouse sales in the city of Toronto were down 3.6 per cent, but up 9.1 per cent in the relatively wellsupplied suburbs.

The average price of a townhouse in Toronto hit $579,358, up 11.2 per cent year over year. That compared with $456,585 in the 905 region, up 10.1 per cent over a year ago.

Condo sales more than held their own as buyers find themselves increasingly pushed to that segment of the market by soaring house prices.

Condo sales in the 416 region were up 9.7 per cent and the average price hit $406,792, up 4.2 per cent. Sales in the 905 suburbs were up 9.7 per cent, as well. The average sale price climbed to $318,317, up 3 per cent. At this point, the GTA is expected to see more than 98,000 homes change hands by the end of this year.

But analysts for the Canada Mortgage and Housing Corp. said at a look-ahead conference this week that they wouldn’t be surprised to see sales exceed 100,000 homes.

Condo research firm Urbanation reported Thursday that the sales of new condos were down13 per cent in the third quarter of 2015 as Toronto’s unprecedented condo boom continues to slide and return to more historic norms.

Some 4,031 pre-construction condos sold from July to September as sales slow to more historic averages, expected top out at about 20,000 new unit sales for 2015.

An unrelenting demand for lowrise homes, and a low supply of these units, are the main factors behind Toronto’s high prices