TORONTO, January 15, 2014 – Greater Toronto Area REALTORS® reported 4,078 residential transactions through the TorontoMLS system in December 2013 – up by almost 14 per cent compared to 3,582 sales reported in December 2012. New listings entered into the TorontoMLS system were down by almost four per cent over the same period.
Total sales for calendar year 2013, at 87,111, were up by approximately two per cent compared to 85,496 transactions in calendar year 2012.
"After a slow start to the year, sales growth accelerated to a brisk pace in the second half of 2013. Despite the inclement weather in December, we finished the year with a respectable gain in transactions compared to 2012. Looking forward, I believe that home ownership in the GTA will remain affordable as borrowing costs stay low. The result could be a further increase in sales in 2014," said Toronto Real Estate Board President Dianne Usher.
"The average selling price will be up again in 2014 and by more than the rate of inflation. The seller’s market conditions that drove price growth in the second half of 2013 will remain in place in many parts of the GTA. Some neighbourhoods, especially those characterized by low-rise home types like singles, semis and townhomes, will continue to have less than two months of inventory," said Jason Mercer, TREB’s Senior Manager of Market Analysis.
The average selling price for December 2013 sales was $520,398 – up by 8.9 per cent compared to the average of $477,756 in December 2012.
The average selling price for 2013 as a whole was $523,036, which represented an increase of 5.2 per cent compared to the calendar year 2012 average of $497,130.
MY OPINION
2013 was a year of ups and downs in terms of sales, but the average price crept up from 2012. In terms of sales, the beginning of the year was a little slower than the beginning of 2012, but by mid year there was a rebound. Remember that the end of 2012 was slower in sales due to the implementation of new mortgage rules in August of 2012. This slump carried over into 2013, but as soon as consumers noticed that these changes did little to the market prices of homes, they resumed buying.
2014 will be another year of stability. Prices will continue increasing marginally (at the rate of inflation) as interest rates (borrowing costs) will remain low.
In certain situations, Buyers will still be involved in bidding wars and multiple offers. Sellers, however, will realize that if there property is overpriced, it will not sell, and they will be forced to reduce the price.
Houses will not sell as fast as in the past because Buyers will not act as quickly as they used to. Buyers will be more cautious and will do their appropriate due dilligence (qualifying for appropriate financing) before preparing an offer. Banks are being more careful in lending, and getting qualified for a mortgage is becoming more difficult.
Nevertheless, a correction, I believe, is nowhere in site for now. I also believe that double digit price increases are over.
