The Toronto Real Estate Board hit a new sales record for the number of homes sold in May, as Greater Toronto Realtors reported 11,706 sales, up 6.3% over May 2014. Record May transactions, coupled with a dip in the number of homes available for sale, resulted in strong price growth. The average selling price for all home types combined in May 2015 was up by 11 % from May 2014, bringing the average sale price year to date to $620,819.
While real estate sales will continue to be strong, I believe May will be the most active month of 2015, with 11,706 sales. I believe that the number of sales in June will be about 10,800, so expect the news headlines to read, “Market drops by 8%!” When you read those headlines, keep in mind that only means the number of sales, not the price of an average home. With no relief so far on the listings front, expect similar rates of price growth as we move through the remainder of 2015.
A huge part of the demand for homes in Toronto, is our low vacancy rate, which has remained at 1.6% from the fall of 2013 to the fall of 2014, according to CMHC. The other major factor in Toronto’s home price increases, is soaring rental rates. The average monthly rent for a bachelor apartment in Toronto grew nearly 3% to $896 between the fall of 2013 and the fall of 2014. The average cost of a two bedroom also climbed roughly 3% during the period, to $1,251.
The combination of low vacancy rates, high cost of renting, rock bottom interest rates, which brings ownership monthly costs into the same ballpark as renting, growing demand from millennials (18-35 year olds) and wealthy immigrants, it`s no wonder that prices in Toronto continue to increase.
If you are considering buying, or have a friend who is, or just want to talk about the market, give me a call, I would love to chat with you.
Have a great June and remember, I am never too busy for your referrals!