I know this report comes a bit late, but with Christmas just around the corner, it's been pretty crazy here! I figure though it's better late then never, so let's discuss the Toronto housing market and the numbers during the first 14 days of December 2011.
First let's start out by pointing out some numbers from TREB's
report:
- 2,699 transactions reported through the MLS during the first 14 days of December, up 11% from December 2010, not bad for what is usually known as a quiet month
- Average selling price in the 416 area is.....$486,414, up 3% from the same period last year
- Average selling price in the GTA is.....$460,967, up 6% from December 2010
- On a year to date basis, sales amounted to 87,407, up 4.3% compared to 2010
Although all these numbers indicate an increase in home prices this year when compared to last, I would have to agree with Jason Mercer (TREB's Senior Manager of Market Analysis) when he said that the housing market still remains affordable in the GTA. It definitely remains unchanged though, as the market continues to be a sellers market and hasn't really seen a buyers market this year, which has been a bit frustrating! I am still seeing very limited inventory and bidding wars and I think it's going to remain the same in the next few weeks. Which brings me to my next point, what can we expect for 2012?
There has been a lot of talk about the Toronto housing market in 2012 and I feel like majority of the news has been doom and gloom, which I find pretty typical of the media. I mean how many times have we heard negative things over the years about the housing market, freaking out our buyers, making us, Realtors, have to do damage control and then the predictions never materializing. I have one buyer couple that wanted to buy a condo last year, but heard through the media, that prices were dropping in 2011, so they decided to wait, even though I told them differently. Of course, prices never dropped this year and now they are kicking themselves for not buying. The same condo unit they were looking at last year, went up $50,000-$60,000 this year!!! The icing on the cake this month was the
article written by Financial Post a couple of days ago with a headline of "Look for 5% to 10% drop in home prices in first half of 2012", my phone was ringing off the hook with either buyers that I'm working with now and buyers who just recently purchased. Like who writes these articles? Economists who have never worked a day in the real estate field and use models that they plug a bunch of numbers into and get results without actually looking to see what is happening in the day to day market. Yes, I do understand that Canada's housing boom is among the longest in the Western world as
reported by The Globe And Mail recently and that something has to give, but I don't think it will be that dramatic as everyone saying it will be. I agree with TREB's president, Richard Silver, when he says, "As this trend continues into 2012, we will see more balanced market conditions". What does "more balanced market conditions" mean? I guess we will have to wait until 2012 to find out, but I definitely do not think the real estate market is heading into bad times. Canada remained relatively strong after the housing crash in the U.S and will continue to remain strong despite what is happening in Europe thanks to our conservative lending guidelines.
The
Canadian Real Estate Wealth reported recently that compared to global real estate markets, Canada is mostly average in their housing price gains. Since 1998, home prices in Canada have risen 85%, which you may think is high, but lets take at look at Ireland, which came #1 on the list, experiencing price gains by 330% from 1992-2007. It has one of the largest overall price gains when compared to 12 Western countries. The other leaders are Australia, up 114% since 1996 and the UK up 174% since 1995. So when put into perspective, Canada, as the article says, "...falls in the middle of the pack". Now keep in mind that I haven't discussed the booming condo market in Toronto, but I will leave that discussion for another day.
Overall, I really believe that the Toronto real estate market will do just fine, if not great in 2012. With the continued low interest rates and Mayor Rob Ford's commitment to repeal the land transfer tax beginning in 2012, as reported by
TREB, we will see a continued strong, healthy and balanced market for the upcoming new year. At the end of the day people have to remember that real estate is a cycle and what goes up must come down and vice versa, it's a circle that never ends and always rebounds. Real estate is always the better investment choice then anything else we have out there. For now I'm waiting to ring in the new year with the highs of 2011 and have confidence it will continue into the new year, but I guess only time will tell.
What do you think?
***Image via Really Better Real Estate***
