First-Time Buyers On The Move In Toronto

More buyers are ready to make a move into Toronto Condos recognizing that it is a buyer's market and there are great Condo bargains to be picked up.

First-time buyers are now back in the market citing lower prices and lower interest rates as a motivating factor. These buyers feel now is the time to buy and the Toronto Real Estate statistics show they are active in this market.

First-time buyers usually occupy 30 to 35 per cent of the overall market according to Royal Lepage in their recent survey of potential first-time home buyers.

This survey went on to say first-time buyers are attracted to the larger urban cities like Toronto that contain a large supply of affordable Condominiums that are popular with this group.

According to the Royal Lepage Survey the typical first-time buyer is 25 to 30 years of age and willing to spend up to $400,000 on a Condo orHome for couples and singles, mostly women, purchasing within the $250,000 to $300,000 range.

Toronto Real Estate offers a large variety of Condos in price, location and layouts for the interested buyers.

Related Posts:

Toronto Condos Resales April 2009

Toronto Condos Prices April 2009

Toronto Real Estate Mid May Sales And Prices

Toronto Real Estate Index April 2009

Toronto Real Estate Index April 2009

Toronto Realtor, Brian Madigan has compiled his own Real Estate Index for Toronto and the GTA areas.

Brian names his index, ORES (Ontario Real Estate) Index and it compares Toronto Real Estate Homes, Condos ( North,East,Central,West) in price differences along with the current price of Gold, Stock Markets and Oil.

This is a very good price comparison of different Toronto Real Estate areas and also when and were this Real Estate Market is heading.


By Brian Madigan LL.B.

The markets have shown a significant sign of recovery this Spring, particularly during the month of April which saw a 6.51% increase in average prices for single family homes in the GTA.

This follows a substantial stock market crash, a worldwide financial crisis, and elections in both the US and Canada during the last quarter of 2008.

I set up the ORES Real Estate Index last year. In many ways it is like the CPI (consumer price index) in the sense that it is designed to track values over a period of time.

The Index commenced 1 January 2004. All related prices were converted to 100, so everything to be compared would have a common starting point.

Single Family Housing in the GTA:

When you are looking at house prices for single family homes in the GTA, you will find the following:

129.80…..30 April 2009

123.28…..31 March 2009

123.08…..28 February 2009

117.93……31 January 2009

122.85……31 December 2008

124.80…..30 November 2008

120.38…..31 October 2008

124.60…..30 September 2008

131.53….. 30 June 2008

132.11……31 May 2008

132.24 …. 30 April 2008

127.42….. 31 March 2008

127.86….. 29 February 2008

125.63….. 31 January 2008

126.31….. 31 December 2007

130.76….. 30 November 2007

130.98….. 31 October 2007

100.00….. 1 January 2004

This means that the average price for single family homes in the Greater Toronto area has increased 29.80% in 64 months. So, this is 0.46% per month or 5.59% per year.

You will also see that the height of the market was reached in April 2008. Traditionally, the peak is reached in May.

There were several remarkable factors that occurred in the month of October 2008:

• Worldwide stock market crash
• Worldwide liquidity crisis
• Commodity price declines in every sector
• Expectation of a worldwide recession
• expectation of numerous bank failures

These factors were very unusual, with media reports noting comparisons to the Great Depression in the early 1930’s.

So, all of these numbers have to be viewed in the context of the world markets and the international media in the month of October.

The year ended at 122.85 and trended lower in January to 117.93.

Sales volumes were off substantially: down by half in January, one third in February, one fifth in March and only by 7% in April.

The good news was that the average price increased by 5.14% in February to 123.08, and slightly more in March to 123.28. There was a 6.51% increase in April to 129.80.

Condominium Market in the GTA:

Here are the comparable statistics for condominiums throughout the GTA:

112.80……30 April 2009

113.56……31 March 2009

112.65……28 February 2009

112.53……31 January 2009

122.61…. 30 April 2008

123.17….. 31 October 2007

100.00….. 1 January 2004

You will notice that the overall performance is less than the comparative single family home.
The condo prices dipped slightly during the month. The performance continues to trail the single family homes.

Central Condominiums :

Let’s have a look at the parts of the condo market. The numbers for centrally located condos illustrate a very notable decline. These are the ones in downtown Toronto:

140.00……30 April 2009

135.32……31 March 2009

134.89……28 February 2009

136.76……31 January 2009

152.99…. 30 April 2008

153.06….. 31 October 2007

100.00….. 1 January 2004

There has been a trend to downtown centrally located condos over the last four years.

That appeared to be changing over the last few months. While the overall downtown condo market seems vulnerable due to increased product supply, last month the short term trend subdued and the market rebounded.

East Condominiums :

These are the condos in the eastern areas served by the Toronto Real Estate Board. Here’s the performance:

121.98……30 April 2009

122.58…..31 March 2009

122.08…..28 February 2009

122.62…..31 January 2009

130.07…. 30 April 2008

121.04….. 31 October 2007

100.00….. 1 January 2004

This market generally has performed quite well. The performance has been very stable and has shown both increases and decreases in line with single family homes.

North Condominiums:

Here the numbers here are somewhat lower:

104.50…..30 April 2009

117.12…..31 March 2009

116.33…..28 February 2009

112.42…..31 January 2009

111.09…. 30 April 2008

125.36….. 31 October 2007

100.00….. 1 January 2004

While the north condos continue to show relatively poor performance, you will notice that it had been showing stability.

I should point out that the few months following inception of the index were not kind to the north condos.

They dropped about 30% in value. If the index were changed to 48 months rather than 64 months as it is now, the performance here would be considerably different. However, that does not account for the dismal April performance.

West Condominiums:

The west condominiums increased slightly over the month and overall the performance is demonstrating reasonable stability:

122.52…..30 April 2009

119.89……31 March 2009

117.68……28 February 2009

118.18……31 January 2009

127.50…. 30 April 2008

119.39….. 31 October 2007

100.00….. 1 January 2004

This market is now generally in line once again with other markets.

Market indicators, factors and conclusions:

There are a few general conclusions that may be drawn:

• You were better to have a downtown Toronto condominium over the last 5 years (actually 64 months) than other property (140.00)

• Single family homes provided a reasonable benchmark rate of return (129.80)

• West condominiums seem to be reasonably stable (122.52)

• East condominiums performed reasonably well (121.98)

• North condos continue to be the poor cousin in the market (104.50)

The downtown Toronto Condominium market is the best performing residential real estate over the last five years in the GTA.

By comparison, it rates particularly well in relationship to other financial and economic benchmarks. But, that does not make it a “buy”. It has recently been showing its vulnerability to the market forces.

It is probably overbuilt now, and further declines may be expected. Essentially, there is too much new product coming onto the market. But, that doesn’t account for its superior performance in the month of April.

Mark Twain once said “Buy land, they’re not making it anymore”, but that’s really not the case particularly when you are talking about downtown condos. And, while quoting Mark Twain don’t forget that he also said “Get your facts first, then you can distort them as you please.”

Other Market Comparisons:

Sometimes, it is wise to look at some other market factors. So, I have converted some popular indexes and commodity prices to the ORES format.

Basically, that means that all other indexes (and commodity prices) are given a base level 100 starting point as of 1 January 2004.

To illustrate the current trend, the March, February and January 2009 numbers follow in brackets. Here is the comparison:

184.80……(188.41)…….(190.62)….. (188.55)….. gold (per ounce)

172.96…….(169.13)…….(148.11)….. (151.21)….. ..oil (per barrel)

129.80…….(123.28)……(123.08)….. (117.93)….. ORES

117.89……..(110.73)…….(97.29)……. (108.16)….. TSX

94.58……..(82.16)…….(66.61)…….. (78.09)……..Nasdaq

85.59………(74.10)……..(60.25)……. (75.35)……. S&P500

82.87………(75.38)……..(62.87)……..(77.66)…….Dow Jones Industrial

For most of the last five years, you were best to speculate in the price of oil, however you will now see that with all the recessionary forces in play that gold is the number one performer.

The real estate index has moved up, and despite dropping prices is now well ahead of the stock market. As an asset class, it is now third, whereas six months earlier, it would have been fourth.

This fact reinforces that real estate is a good long term performer.

Our own stock market has faired pretty well compared to the substantial declines in the US. At the lower end of performance is the US stock market with all three indices at the bottom of the overall performance scale.

Real estate seems to be about where it should be: not too high and not too low. As I have often stated, real estate generally shows a 5% long term return, and right now the numbers show 5.59% as measured over the last 64 months.

You will notice that when it comes to prices and a recession, real estate is a relatively strong performer.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters,

Royal LePage Innovators Realty
905-796-8888
ontariorealestateresource.com


Brian has shown above, how Toronto Real Estate compares with other leading indicators and what direction the price is moving in an ongoing, updated manner.

Related Posts:

Toronto Condos Resales April 2009

Toronto Condos Downtown

Toronto Condo Impending Harmonization Tax

Canadian Real Estate Climbs Month Over Month For April

Canadian Real Estate climbed 11.2 per cent in national sales on a seasonally adjusted month over month gain, the highest in more than five years.

Over 34,838 homes changed hands again higher than in any of the prior seven months.

Calgary led by 31 per cent gain, Vancouver 30 per cent gain, Montreal 15 per cent gain and Toronto home sales by 10 per cent gain.

Over 7o per cent of the Real Estate markets cross Canada reported sales were up from March.

The average Canadian Real Estate sales price was $306,366 down 3.2 per cent from April 2008.

The Canadian Real Estate Association said that this rebound in home sales and prices was much stronger than expected.

Related Posts:

Toronto Condos resales April 2009

Toronto Real Estate Technical Forecast

Toronto Condo Lovers

In the past few years large numbers of Toronto Condos appeared to be all under construction at the same time.

Now people are wondering just who is lining up to buy these new Condos.

Just recently we had 1 Bloor East, The Aura Condos of College Park, Beyond The Sea and California Condos that proved to be very popular and buyers lined up sometimes for days to get a chance at buying their own units.

Forecasts are that Toronto employment and incomes could drop into next year until the economy starts to recover and this will impact current demand for homes, including Condos.

Just how much so remains to be seen as the Toronto Real Estate Market for 2009 is building on month to month increases in both sales and prices.

Affordability, choice of location, immigration and lower mortgage rates are encouraging home buyers to buy more of these new Condos.

Existing Resale Condos should stabilize in a median price range of $239,000 over the next 12 to 18 months according to a recent TD Economics report.

The first quarter of 2009 has seen the average home price rise from $343,632 in January, every month to $385,641 in April, a 12.2 per cent increase.

Just perhaps, December 2008 would have been an excellent time to buy for potential Toronto Condo lovers thinking about entering the Toronto Condos Market.

Related Posts:

Toronto Condos Downtown

Toronto Condos On Bloor Street

New Downtown Toronto Condos East

Canadian Home Ownership More Affordable

Canadian home ownership was more affordable at the end of 2008 according to a study released by the Royal Bank of Canada.

From mid-2004 to early 2008, the cost of home ownership more and more of a portion of family incomes, however this trend reversed in the final months of 2008. This affordability in the last quarter of 2008 covered all housing segments, detached bungalows, townhouses, condos and two-storey homes.

RBC's affordability on a national level was:

• Maintaining a detached bungalow costs 43.7 per cent of household income


• Maintaining a townhouse...35.4 per cent


• Maintaining a condo...........30.1 per cent


• Maintaining a two-storey..50.0 per cent

Improvements were related to lower interest rates and downward pressure on new and resale home prices improving affordability in most Real Estate markets.

The Toronto Real Estate Market has been showing strength, month over month with higher sales and improving prices, even in these uncertain economic and political ( more Tax ) times.

Related Posts:

Toronto Resale Homes And Condos February 2009

Toronto Real Estate Condo Listings

Toronto Taxpayers Now In Real Estate Development

Toronto Real Estate Developments have a new player..the Toronto taxpayer. The City of Toronto is about to develop over 30 properties ranging from selling them to develop them for commercial use.

One example is the City owned parking lot at York Mills and Yonge street that is over 3.2 acres and even Wilson Heights that is 8 acres now ready for development.

It is estimated all these potential development sites could bring in $150 million dollars a year from the sale of Toronto Real Estate holdings.

Source:
John Spears CITY HALL BUREAU Toronto Star Article as follows:

If you're a City of Toronto taxpayer, you're now in the real estate development game – and the city has released a list of 30 properties that are now in play.

From the derelict bus stalls at Eglinton subway station, to the C.O. Bick Police College at Finch Ave. E. and Brimley Rd., the city's new development company, Build Toronto, will soon have a substantial portfolio. Yesterday, the city released a list of 22 new properties that will be assigned to Build Toronto for development, if council approves.

Council had already earmarked three others, and Build Toronto will inherit five more through its predecessor, the Toronto Economic Development Corp.

The city will explore ways to make money from the sites, ranging from selling them off to developing them for commercial use.

The Eglinton bus terminal, for example, is geographically almost at the dead centre of the city. The TTC moved the bus terminal beneath a parking garage several years ago – while the bus stalls sit vacant, surrounded by chain-link fence.

A special panel appointed by Mayor David Miller estimated last year the city could make $150 million a year by developing its real estate.

Last week, Build Toronto's board of directors named the company's top two officers: real estate executive Lorne Braithwaite as chief executive, and Derek Ballantyne, head of Toronto Community Housing Corp., as chief operating officer.

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Build Toronto