Single, detached homes make a price comeback in Toronto
‘Condo story was overshadowing a lot of the activity,’ Re/MAX executive VP says
The popularity of Toronto’s leafy Little Italy and Trinity-Bellwoods neighbourhoods has helped those downtown pockets achieve the best quarter-overquarter price increases in the Toronto area this year.
Detached houses in those hip urban areas were up 17 per cent in the second quarter of the year, averaging $1.88 mil- lion, compared with the first three months when they averaged $1.6 million, according to a Re/MAX report published Thursday.
Across the Toronto region, with the exception of condos, year-over-year home prices have remained relatively flat, although they inched up 2.5 per cent overall in June, led by a 9.5 per cent increase in condos, according to the Toronto Real Estate Board (TREB).
But traditional, detached houses have been making a quiet comeback, said Christopher Alexander, Re/MAX Integra’s executive vice-president and regional director.
“The condo story was overshadowing a lot of the activity of single-family detached,” he said.
“The fact remains that people who bought in the last seven years, prior to 2016-2017, gained a lot of equity and market conditions were easier for buyers to make decisions they felt comfortable with.”
When the frenzied buying hit the region in 2016 and continued through the first four months of 2017, “it was tough to be a buyer,” Alexander said. “Now it’s not as tough. You’ve got choices and you can make informed decisions better.”
Re/MAX found that conditions this year are showing signs of a new normal that looks more like the pre-fevered market. That heated market sagged when the Ontario government launched its cooling measures, such as a foreign buyers tax in April 2015 and interest rates started rising as consumers were hit by tighter borrowing restrictions.
Wednesday’s Bank of Canada quarter-point rate hike to 1.5 per cent won’t impact the housing market, Alexander said.
“Interest rates rising is a sign of a good economy and a quarter per cent is nominal. You might have to spend a couple of extra months saving up, but that’s such a nominal number we’re not concerned,” he said.
Detached house prices held steady in 49 of 65 TREB areas between the first and second quarter, and in 63 out of 65 neighbourhoods the number of sales increased between the first and second quarters — typical of the market as the weather warms up, Alexander said.
Although the average Toronto detached house sold for about $1.36 million in June, there were five neighbourhoods inside the city borders where houses averaged less than $860,000. Those were: Humber, Claireville, Rexdale-Kipling and Thistletown-Beaumond Heights where the aver- age was $732,854; Bendale, Woburn and Morningside at $742,670; Malvern and Rouge, $752,292; Rockcliffe-Smythe, Keesdale-Eglinton West and Weston with an average of $783,141 and Downsview-Roding, Glenfield-Jane Heights, Black Creek and Humber Sum- mit where the average house was $859,215.
Re/MAX is the third company this week to predict a stronger half to 2018. Royal LePage and Sotheby’s also issued reports suggesting that the Toronto area housing market is returning to normal.