This summer has been Canada's hottest and priciest for a long time. Sales shot up by an incredible 21.1 per cent in August compared to results from a year ago. The average price in the Greater Toronto Are rose as well, from $477,170 last year to $503,094. The MLS Home Price Index, which adjusts for changes in the types of houses that are selling, increased 3.7 per cent in Toronto. The number of houses entering the market is up 4.5 per cent to satisfy the high demand.
Toronto Skyline by Hailey Toft
Bank of Montreal economist Sal Guatieri said the Canadian market has "shades of taking flight again." Observers suspect, though, that the upward trajectory will ultimately be flattened by rising rates. This is because many buyers jumped in sooner than they would have otherwise.
Mortgage rate pre-approvals tend to require four months. Mortgages below 3 per cent will be running out around October, and that's the major push for potential homebuyers. It's important to realize, though, that jumping in too soon can actually cost homeowners more money than a higher mortgage rate. It's a good idea to do the math before signing a deal. Many buyers pay $25,000 more for a house to preserve a mortgage rate that saves them $10,000.
While rising rates are pushing people into the market now, rates will ultimately act as a drag in the market,
said Craig Alexander, chief economist at Toronto-Dominion (TD) Bank. He also expects five-year rates keep rising by about 0.5 per cent throughout the next year. He's forecasting relatively flat sales for a lengthy period.
Flat is ultimately the best outcome we could have in the market. It is not terrible for sellers, but it's also good for buyers. And the fact that prices should rise money more slowly than incomes should ultimately reduce some of the overvaluation that is present in some of the markets,
Downtown Toronto by Jose Herrera
City of Toronto
The MLS system recorded 2,665 sales in August 2013, with an average selling price of $518,145.
The top-selling property type was detached houses. In August, sales rose by an incredible 23 per cent to 846 properties. The average selling price for this type of property was $783,708, which is 4.7 per cent more than buyers paid a year ago.
Surprisingly, the condo market strengthened markedly, and TREB (the Toronto Real Estate Board) recorded 1,280 units sold last month — which is 21.4 per cent more than in August 2012. The selling price remained low, at $357,572 per unit, but it increased by 2.3 per cent in a year-over-year comparison.
Townhouses saw a major sales improvement as well. There were 285 units sold in the City of Toronto last month — 12.6 per cent more than a year ago. The price, however, dropped slightly, by 0.8 per cent. This year, homeowners paid $416,463 on average. This is the only negative figure we've seen in this month's report.
Semi-detached houses remained at the bottom of the top-selling properties list. Their sales rose the least in August — by 7.4 per cent, to 231 houses. The average selling price rose by 8.7 per cent to $576,033. This is the highest price jump recorded on TREB records since August 2012.
Rest of Greater Toronto Area
There were 4,904 sales recorded in the MLS system in August 2013, with a selling price of $494,914 on average.
Detached houses led the market in the City of Toronto as well as in the rest of the GTA. Sales skyrocketed by 24.6 per cent to 2,789. Despite high sales, the average selling price remained the lowest in the rest of the GTA, at $590,583, which is 5.1 per cent above last year.
Townhouses were the second top-selling property type in the rest of the GTA, with 938 units sold. The number of sales jumped by 19.2 per cent. The average selling price rise remained in line with other properties, and rounded to 6.7 per cent. This year, homebuyers paid $374,494 on average for a townhouse.
Toronto at Night by madmack66
Condo apartments performed above expectations in the rest of the GTA as well. Their sales grew by 16.9 per cent to 506 units for an average sale price of $293,825 on average. The average selling price for condos rose 7.1 per cent, and it represents the biggest price jump in the rest of the GTA.
Semi-detached properties appear at the bottom of the top-selling properties list in the rest of the GTA too. The MLS system recorded 536 sales, with an average selling price of $409,322. Sales rose by 16.5 per cent, and the selling price increased 5.1 per cent. The price of semi-detached properties saw the smallest gain together with detached properties in the rest of the GTA.
Greater Toronto Area
According to the MLS system, 7,569 homes sold in August 2013 in the entire GTA, with a selling price $503,094 on average.
Detached properties were the absolute best-sellers in the GTA in the last month. There were 3,635 sales recorded in the MLS system, which is 24.2 per cent more than the year before. The average selling price was $635,531 — 4.9 per cent more than in August 2012.
The condo market jumped incredibly last month, and its sales rose by 20 per cent. It recorded 1,786 sales for an average price of $339,512. The 3.7 per cent price rise is the smallest in a year-over-year comparison.
Townhouse sales rose 17.6 per cent, to 1,223 units, in August 2013. Their average price was up 4.5 per cent, to $384,274.
Semi-detached houses closed the list, with a 13.6 per cent year-over-year rise. They recorded 767 transactions in the MLS system, with an average selling price of $459,528. The selling price of semi-detached properties jumped the highest last month, at 5.8 per cent.