Greater Toronto Area
10-year appreciation—81 per cent (6.09 per cent annually)
Five-year appreciation—32 per cent (5.74 per cent annually
Serious equity gains remain the strongest catalyst in the Greater Toronto Area, prompting healthy homebuying activity in trade-up neighbourhoods from Scarborough to Mississauga and all points north. Last year, sales of move-up product—identified as single-family dwellings priced from $500,000 to $700,000—were up eight per cent over the previous year— and represented 20 per cent (17,218) of the market.
In 2011, 15,855 sales occurred at that price point, accounting for 18 per cent of overall homebuying activity. The level of activity in the move-up segment is expected to increase in the year ahead as first-time buyers take a backseat to more experienced move-up purchasers. Supported by higher downpayments— as a result of solid price appreciation in recent years—and augmented by today’s low interest rate environment, the timing is ideal for many to trade-up to larger homes and better neighbourhoods, or make lateral moves to condominium product in the downtown core. To illustrate, homeowners who bought homes in 2002 at an average price of $275,231 typically sold in 2012 for an average of $497,298—a percentage increase of 81 per cent over the past decade—representing an annually compounded rate of return at 6.09 per cent. Even those buyers that purchased just five years ago have realized a 32 per cent increase on their original investment. Singles, semi-detached, and towns/rowhouses have been most popular with move-up buyers, with almost 90 per cent of sales in the price range involving a freehold home. Just 10 per cent of sales involved a condominium at that price point. Inventory levels remain a challenge within Toronto proper—with fewer than 300 single-detached homes currently listed for sale in the $500,000 to $700,000 price range from Victoria Park to Islington, north to Steeles Ave.
While the arrival of the traditional spring market should prompt an infl ux of new product to the marketplace, the number of homebuyers is also expected to climb. On the other hand, supply in peripheral areas—the 905 suburban markets—has increased, allowing purchasers the luxury of time and choice. Property types in markets like Thornhill, Maple, Richmond Hill, Markham, Brampton, Mississauga, Whitby and Ajax run the gamut, with both older and newer product available from $500,000 to $700.000. Not surprisingly, purchasers in outlying areas tend to prefer turnkey properties requiring little or no renovation whereas buyers in more established areas within Toronto proper are more willing to undertake renovations to improve accommodations. Given the city’s solid economic footing and positive employment picture, demand for residential real estate is expected to continue at a healthy pace throughout 2013, with sales on par with last year’s levels.
Jas Jagpal, BSc. Broker “Name Trusted by Clients and Realtors Alike!”
Jess Jagpal, Sales Rep. 416.312.9742
RE/MAX Dynasty Realty Inc.
8 Shadlock St, Markham ON L3S 3K9 O: 905 471 0002 Jas Cell: 647 272 6629
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