The Toronto Real Estate Board (TREB) recently released the GTA's sales results for July. The figures reveal what TREB is calling a “troubling trend” of growing demand pushing up against dwindling supply.
It was a record-breaking July for Toronto real estate in more than one categories. Both condo sales and price growth broke all previous records for July; we're continuing to see strong growth for both 905 and Toronto-area condos, which of course includes the Toronto loft market. Really, this is just another month in a long streak of record-breaking growth periods and these trends are unlikely to slow, let alone reverse, any time soon.
Looking at the above chart, you'll note the increase in Toronto condo and loft sales, up +9.2% in July over the same period last year. You may think that reflects an increase in condo stock; we wouldn't fault you for jumping to the conclusion that a surge in sales equals a jump in supply. In fact, quite the opposite is true.
As you can see below, active listings are down nearly -32% year-over-year and that's a big part of the reason why you're seeing these major price gains across all property types. You can't separate what's happening in the high- and mid-rise markets from what's happening in the freehold, low-rise market.
GTA property values as a whole jumped +16.6% in July over last year. That's average growth across all GTA areas and property types. When you isolate condos and lofts, Toronto saw an +8.2% price jump and the 905 - which is the big news story in our opinions - a phenomenal +13.0% jump in values.
The continuing shortfall of supply to demand is what's driving these massive price gains. It's also driving an increase in bidding wars, particularly on rare properties like Toronto lofts for sale, leaving some buyers frustrated and others simply not willing to participate in the market at all which may be a mistake. While you're not overpaying and going through the frustrations of buying in a hot market, if you're a would-be first time buyer who's currently renting, you're also not growing your home equity and taking advantage of these incredible growth years.
Larry Cerqua, President of TREB, had this to say when releasing July’s figures:
“GTA Realtors® have been working very hard on behalf of their buyer clients to help them find a home meeting their needs. Unfortunately, listings for single-detached and semi-detached houses and town houses continue to be in short supply.
The result has been an increase in pent-up demand and annual rates of price increases well above the rate of inflation.”
It’s clear we’re experiencing a major listings constraint but what wasn’t addressed in this recent report is that the Toronto condo market isn't immune. After years of critics calling for the mythical Toronto condo bubble to burst, a lot of people assume supply isn't an issue in the condo market because of all the building activity we've been experiencing. In fact, supply is very much an issue - for virtually every kind of condo outside of over-priced, cookie-cutter micro condos and units in new buildings where investors are all selling up at once. Add to a buyer's wish list any unique criteria such as an authentic, hard loft or a large 2 or 3 bedroom unit, and buyers may wait months for the right listings to crop up and when they do, face bidding wars that they may not win.
In this market, more than any other time in the GTA's real estate history, you need to work with an expert to maximize your chances of winning a bid and making a wise investment decision. So, whether it's with us or another loft team, working with a loft expert who knows the area you're looking to buy in well.
The biggest news item in July's figures is the incredible pace at which 905 condos are increasing in value and sales, now outpacing Toronto.
While authentic lofts in the GTA are synonymous with Toronto living, there are a number of lofts (mainly new soft loft developments although there are some hard lofts) across the GTA in key growth markets like Burlington and Mississauga.
If you're interested in learning more about lofts in Toronto and those outside of Toronto proper, contact one of our Loft Experts about investment opportunities in some of the GTA's hottest growth markets.
Charts courtesy of the Toronto Real Estate Board. Lead image of Unit 415, for sale at The Work Lofts in Leslieville.