Each Executive Summary Report is for a specific TRREB zone combination and includes a map of the included zones and a 1 page summary for each property type (detached, semi-detached, townhomes, condos)
The Information / statistics you can find in each Executive Summary Report include:
As the media has accurately portrayed, year-over-year growth in January 2021 was significant. Overall, TRREB # of sales increased by 52.4% with all but 7 of TRREB’s 65 zones posting year-over-year gains. With respect to property type, Condominiums led the way with Jan 2021 sales up 85.5% vs. Jan 2020, helping to eat into a still lofty level of active listings. While detailed reports by TRREB zone are included at the bottom of this email, some high level takeaways are as follows:
– 416 Condo active listings ended January 2021 with 2,360 units available (up 89%) vs. January 2020 (1,246 units). While the +89% figure still points to excess supply, it is a significant reduction from the +194% active listings at the end of Nov 2020, and +172% active listings at the end of Dec. 2020. Based on where February results are tracking, we expect to see this percentage continue to decrease.
– 416 Condo average price decline of -8.0% was heavily impacted by the reduced number of Condo sales over $1.5M in the month. Jan 2020 had 26 sales over $1.5M, while Jan 2021 only had 14 sales over $1.5M. This reduction in the high end condo market pulled overall average price downward.
– Detached active listings – detached active listings at the end of Jan 2021 were down -40% from Jan 2020 (down -39% vs. the 5yr average and -43% vs. the 10yr average for a typical January). This reduced inventory resulted in significant upward pressure on prices, particularly in the 905 where active listings were down -45%.
– *New Record* – 905 Detached Average Price was up 36.6% ($958K in Jan 2020 to $1.308M in Jan 2021). That year-over-year increase was the highest ever recorded for Detached homes in the 905. The previous record was a 35.7% increase from Feb 2016 to Feb 2017. While this significant increase in average price was heavily swayed by an explosion of detached sales over $2.5M in the month (95 in Jan 2021 vs. 17 in Jan 2020) it was a record nonetheless.
*CAVEAT – mid-month statistics should only be used for trend/estimate purposes only. As the Feb 1st to 17th date range historically represents less than 50% of the monthly transactions, figures can change quickly and dramatically as we approach month end. While we’ve included a February exhibit in the attached, summary results are as follows:
– February appears to be picking up right where January left off. Overall sales for the period are up 88%, led by 416 Condos and 905 Detached.
– Average price also continues to climb with an approx. 17% overall increase, with 905 Detached leading the way once again with a 31% increase.
– 416 Condo prices look to be down 10%, however, that is being skewed significantly by a continued slow down in the super luxury condo segment (only 1 sale $2.5M+ during this period in February vs. 7 $2.5M+ sales during the same period in the previous year).
– It will be interesting to see if these trends continue for the remainder of the months and where final February numbers land.
One of the most significant changes during 2020 was the impact COVID had on the condo market. Right out of the gate, Condos led the way with average prices up +17.5% during Q1/2020 vs. Q1/2019 and active listings (supply) down -29.4%. Fast forward to Q4/2020 and year-over-year condo average price was down -1.1% (for the period) and active listings (supply) up +158.7%. From a geographic perspective, the closer you were to the Core 416, the more profound the change.
With that in mind, we wanted to take a deep dive into the condo market segments (new construction, resale, rental) to see how things are shaping up for 2021 (Note – the attached presentation includes a deep dive on the former City of Toronto zone, however, if you have questions, or would like other area details, please let us know):
– New Construction Condos (i.e., Pre-Registration): 2020 new condo sales in the “905” region outpaced “416” sales for the first time. While it was close, 51% of all new construction sales during 2020 were in the 905 (vs. 42% which was the previous 905 record in 2019).
– New Construction Condos (i.e., Pre-Registration): Inventory within the Former City of Toronto surpassed the 10month “balanced market” threshold ending with 12.5 Months of Inventory (6,352 available/unsold units priced at an average of $1,377psf)
– Resale Condos (former City of TO Zones): Average price per square foot hit a peak of $1,069/psf in Q1/2020, but fell to $959/psf in Q4/2020. This represented a -10.3% drop between periods for the Former City of Toronto Zones (“Outer 416” dropped only -3.1%, and 905 was up +0.4%).
– Rental Condos (former City of TO Zones): Average rent per square foot in Q4/2019 was $3.79/psf (average rent = $2,538/mth) which reduced to $3.14/psf (average rent = $2,101/mth) in Q4/2020. This represented a decrease of -17.3% for the former City of Toronto Zones (“Outer 416” dropped -12.7% and “905” dropped -4.9%).
– Outlook – while demand appears to be back for the resale condo market (at least for the immediate term), with significantly reduced immigration numbers and continued COVID restrictions, it could be some time before we start to see a rebound in the condo rental market.
While your Outline Financial Mortgage Agents are always available to discuss any questions you might have, a few of our most requested topics this month include:
– Tax Filing Time & Mortgage Qualification – Most self-employed / commission income clients have some flexibility with respect to the amount of deductions they claim or how much income they declare on personal taxes (vs. retaining in the corporation). It is always a good idea to run the pre-qualifying numbers BEFORE you file your taxes as it can have a material impact on your mortgage qualification amount.
– Appraisals – with property prices climbing quickly, it is important to understand that lenders/appraisers base their opinion of value on historical sales and not a forecast on the direction of the market. Appraisers will rely heavily on recent comparables (sales typically within the most recent 3 to 6 months) and if there aren’t enough, they are more likely to expand the geographical area and adjust for price than extend the comparison time period. With that in mind, we’ve provided some useful strategies in the attached to help navigate the current market conditions.
– Are 5-year fixed rates on the rise? While the banks have yet to move upward as of writing this email, it is likely we will see an increase very soon. Historically, 5-year fixed mortgage rates will move in tandem with the Bank of Canada 5-year bond yields. While bond yields have fluctuated between 0.30% and 0.50% during the pandemic, we have seen a recent spike with bond yields rising 0.25% between Feb 1 to Feb 22nd (from approx. 0.40% to 0.65%).
Given the amount of uncertainty in the economy/market, time will tell if this is this increase is here to stay, however, if you are active looking for purchase or refinance, now is a very good time to secure your rate hold. To discuss available options, please contact us directly for an introduction.
11 Capreol Ct
Toronto, ON M5V 3Z6
©2021 Michael Labrador Real Estate
Michael Labrador – Sales Representative
Right At Home Realty Inc., Brokerage