2014 was a near record breaking year for the Toronto Real Estate market. Things started off strong with a lot of competition in the housing sector. These conditions progressed into the summer and finally started to cool a bit by the end of fall. Where we were seeing sometimes upwards of 7-10 people making offers on a home; the fall brought fewer offers and in some instances no offers at all on offer night. Which I find quite normal since buyers are often exhausted by that point.
The low inventory levels that we saw at the end of 2013 continued into and lasted for all of 2014.
Due to the increased cost of moving, mostly the addition of the Toronto Land Transfer Tax (introduced in February of 2008), homeowners are now undergoing renovations to accommodate their changing needs instead of moving. This has caused a decline in active inventory which we have really felt the effects of this year.
Despite those inventory levels sales were actually still up 6.7%.
“The Toronto Real Estate Board’s 2014 sales figures are a testament to the importance Greater Toronto Area households continue to place on home ownership. GTA households realize that home purchases have been a quality long-term investment. While home prices certainly increased substantially in 2014, the purchase of an average priced home remained affordable, in terms of the average household’s ability to comfortably cover their monthly mortgage payments,” said Mr. Paul Etherington, President of the Toronto Real Estate Board.
“Even with a constrained supply of homes for sale in many parts of the Greater Toronto Area, buyers continued to get deals done last month. Households remain upbeat about home ownership because monthly mortgage payments remain affordable relative to accepted lending standards. This is coupled with the fact that housing has proven to be a quality long-term investment,” stated Mr. Etherington.
The year-over-year summary illustrates the drop in active listings in 2014, down 10.4% from 2014.
The two types of homes that saw the biggest decline in inventory were semi-detached and attached row houses. This is undoubtedly due to the lack of this style of home listed for sale. The demand for these homes likely rose due to the average price point of a semi-detached or row how in comparison to a detached home.
2015 will not likely see the same competition in the first quarter as we did in 2014, though the market will remain a seller’s market.