Quiet comeback for detached housing bodes well for GTA housing market
Price appreciation in the second quarter of 2018 showed a marked improvement over Q1 figures, with the average detached housing values in the Greater Toronto Area (GTA) on par or climbing in 75 per cent of Toronto Real Estate Board (TREB) districts, according to a report released by RE/MAX INTEGRA, Ontario-Atlantic Region.
The RE/MAX Hot Pocket Report examined sales and average prices for detached homes in 65 TREB districts for the first and second quarters of 2018. The quarterly comparison found that second-quarter sales were up almost across the board (63/65), with housing values on par or rising in three-quarters of GTA markets (49/65).
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“While the stellar performance of the GTA’s condominium sector captured headlines throughout much of the year, detached housing sales and prices were quietly making a comeback,” says Christopher Alexander, Executive Vice President and Regional Director of RE/MAX INTEGRA, Ontario-Atlantic Region. “Second-quarter detached housing numbers from both a price and sales perspective suggest that the market has shifted yet again, with momentum building as homebuyers flex their muscles.”
The top-performing markets in terms of price appreciation experienced double-digit growth in Q2. Led by Palmerston-Little Italy, Trinity-Bellwoods, Niagara and the waterfront communities (C01) in the 416, values rose 17 per cent from $1,601,327 in the first quarter to $1,872,407 in the second quarter. Homes in the sought-after downtown core are typically sold at a sale-to-list-price ratio of 107 per cent within eight days on market.
To the East, Brock posted a 15-per-cent increase in average price. Values in The Beach (E02) experienced a 13-per-cent uptick, while Edenbridge-Humber Valley, Kingsway South, Princess Rosethorn and Islington City Centre West (W08) rose 10 per cent in the second quarter, compared to the first. Georgina – a community on the shores of Lake Simcoe— rounded out the top five, jumping 10 per cent.
Home-buying activity was also on the upswing in the second quarter of the year, with 97 per cent of districts reporting an increase in sales volume between Q1 and Q2 2018. The neighbourhoods of Lawrence Park North and South, Bedford Park-Nortown and Forest Hill North – comprising the North Toronto neighbourhood of C04 – were clear frontrunners in the second quarter, with sales almost tripling first quarter levels. Between April and June, 173 homes changed hands, up 193 per cent from the first three months of the year.
Mississauga placed second with a 122-per-cent increase in detached sales in the second quarter, compared to Q1, followed by Caledon with an upswing of 121 per cent. Yonge-St. Clair, the Annex, University and Wychwood (C02) ranked fourth, with a percentage increase of 118 per cent, while Highland Creek, Centennial, West Hill and the Rouge (E10), placed fifth at 116 per cent.
Greater affordability provided a much-needed break for homebuyers in the Greater Toronto Area in 2018, with year-over-year prices falling short of 2017 levels in many areas.
“Buying opportunities continue to exist as a result in neighbourhoods throughout the 416 and 905 area codes,” explains Alexander. “But the window is starting to close, with detached housing sales and values climbing.”
While the average price of a single-detached home hovered at $1,350,000 in June, five neighbourhoods in the 416 offered up single-detached homes under $860,000 in the second quarter of the year. Those neighbourhoods were: West Humber, Claireville, Rexdale-Kipling and Thistletown-Beaumond Heights (W10) at $732,854; Bendale, Woburn and Morningside (E09) at $742,670; Malvern and Rouge (E11) at $752,292; Rockcliffe-Smythe, Keelesdale-Eglinton West and Weston (W03) at $783,141; and Downsview-Roding, Glenfield-Jane Heights, Black Creek and Humber Summit (W05) at $859,215.
Purchasers expanding search perimeters to suburban GTA communities realized even greater savings, with average prices for detached homes found under the $600,000 price point in Essa ($547,970); Oshawa ($556,309); Brock ($573,951); Clarington ($585,562); and Georgina ($590,255) in the second quarter.
The RE/MAX Hot Pocket Report also found a limited supply of detached inventory in the 416 contributed to a noticeable decline in days on market in hot pocket neighbourhoods in Toronto proper. While the overall average was 21 days in June, detached homes sold in eight days in Palmerston-Little Italy, Trinity-Bellwoods, Niagara and the waterfront communities (C01); nine days in Mount Pleasant (C10); 10 days in Leaside (C11); 11 days in High Park North, Junction (W02); and 12 days in Rockcliffe-Smythe, Keelesdale-Eglinton West and Weston (W03); Lawrence Park North and South, Bedford Park-Nortown and Forest Hill North (C04); the Beach (E02); and O’Connor Parkview, Crescent Town, East York, Danforth Village and Broadview North (E03).
“The GTA’s detached housing market has clearly stabilized after a rocky 12-month period,” says Alexander. “The frenzied home-buying activity of 2016/2017 is behind us. The new normal for Toronto and the surrounding communities is a relatively balanced housing market, with supply meeting demand. Given current economic fundamentals, we expect continued upward pressure on detached housing values throughout the remainder of the year.”