Every day there seem to be six or seven new articles written about Canada’s or Toronto’s housing market. We’re in a bubble, we’re not in a bubble. Household debt is too high, but average wealth is increasing. House prices are down, yet condo prices are up. Transactions are plummeting on Toronto resale homes, but sales continue to set records for new home prices and sales. The foreign buyers tax heavily impacted Toronto, yet Vancouver house prices are surging. How does one make heads or tails of this daily dump of contradictory information?
The first piece of advice I’ll offer is to avoid trying to time the market. People were certain that Canadian residential housing was in a bubble in 2011 and the entire country was headed for a painful housing crash. Well, you saw what happened next. Resale prices for single-detached and semi-detached homes declined pretty significantly in June and July in the Greater Toronto Area, so some people are going to wait to see if they fall further. Well, homes are still selling, and you just might miss out on that dream home of yours by waiting it out. Despite the recent drop, average resale prices in the GTA were higher in July 2017 compared to Dec. 2016.
If you’ve really got your heart set on a new home, you don’t have the luxury of waiting. In the new highrise condominium market, there are just over 7,000 units remaining for sale, but that figure was almost 16,000 a year ago. As supply has dwindled, average new condo prices have spiked from $470,000 in June 2016 to $627,000 in June 2017, according to Altus Group figures.
If you’re in the market for a new single-detached, semi-detached or row home, there’s some good news – supply has risen over the last couple of months. Unfortunately, there are still only 1,600 new homes up for grabs across builders’ sales offices in the GTA, a 25-per-cent decline year over year. Average new home prices for lowrise is a whopping $1.25 million, up from $887,000 in June of 2016.
Some of you may not be comfortable buying pre-construction and want to purchase a completed, new single-detached home. Canada Mortgage and Housing Corp. reports that there are 295 completed and unsold new singles in the GTA, but the average asking price is $1.7 million. Perhaps you want one of the 12 properties in the north part of Toronto. Well, the average price for those single-detached houses is $3.5 million.
Developers are more likely to pull pre-construction homes from the market and wait for conditions to improve, as opposed to discounting their product.
Despite uncertainty in the resale market, new home prices are still up there, and they probably won’t get any cheaper. Developers are more likely to pull pre-construction homes from the market and wait for conditions to improve, as opposed to discounting their product. When it comes to completed and unsold homes, there’s a high likelihood that they would rent them instead of reducing the price.
There is a lot of conflicting information out there, and no one wants to buy a property and immediately see its value decline. But if you’re in a place financially to buy, and intend to live in the home for several years, fluctuations in average values shouldn’t concern you. Good luck!