York won’t feel Toronto’s condo cool off: analysts

Yorkregion.com
March 13, 2014
By Amanda Persico

Move over single-family home, make room for multi-family high rises.

The high-density boom seen in 2013 will continue well into 2014, said a senior housing market analyst.

But south of the Steeles Avenue border is a different story.

Recent economic reports from TD Economics paint a not-so-rosy picture in Toronto, where supply for condominium units outweigh demand and the housing market, in particular the condo market, will see a slowdown over the next few years.

However, York Region is at the beginning of a long-term trend that will see an influx of condominium developments, said Ed Heese with the Canadian Mortgage and Housing Corporation.

“The long-term trend will move the market away from low-rise housing,” he said. “York Region, along with Durham and Peel, have been traditional low-rise markets. We will start to see more condo developments.”

The condo market is very solid, especially in the southern parts of the region, where about 90 per cent of the region’s condominium units are shared between Markham with 44 per cent, Vaughan with 28 per cent and Richmond Hill with 18 per cent.

That means, more opportunities for first-time home buyers, said local real estate agent, Susan Taylor, who is also president of the Cornell Residents Association in Markham.

“We’re seeing more new condo inventory compared to other housing types,” she said. “Condos are a great way to get into the housing market, great for first time buyers and great for newcomers.”

According to the Toronto Real Estate Board’s housing report, the 905 area out paced Toronto when it came to townhouse and condominium unit sales.

There was a 46-per-cent increase in condo unit sales in 2013, compared to 2012 in the 905 area and a 15-per-cent increase in townhouse sales during the same period. The average price for condos last year in the 905 area was $293,883 and townhouses $384,095.

In the 416 Toronto area, there was a 21-per-cent increase in condo sales averaging $367,376 in price and a 13-per-cent increase in townhouses with the average price tag of $447,188.

In the 905 area, there was a 13-per-cent increase in detached home sales over 2012, compared to a 7-per-cent decrease in Toronto.

But adding more condo units, which are generally lower in price than single detached homes, will cause decrease in the average home price.

Don’t be fooled into believing this downward turn means housing prices are on the decline, Mr. Heese said.

“People love the average price game, waiting for the bubble to burst or for the housing market to correct itself,” he said. “This just means there is a larger proportion of condos in the mix. The public just needs to be aware of the arithmetic.”

With more condo units in the mix, single family home prices are on the rise as there is less supply, he added.

For families, a good compromise between less expensive condo units and increasing detached home prices are townhouses, both freehold and condo-style, Ms Taylor said.

“This might mean the average price comes down,” she said. “But volume will go up. And the vacancy rate remains low. And that means there is a demand for it.”

And there doesn’t seem to be a downturn in housing demand as the fine balance between supply, demand and house sales is still intact, Mr. Heese said.

“Housing demands is a reflection of immigration trends and employment,” he said. “The market is all about what people can afford. There hasn’t been any dumping of homes or panic selling to indicate a market slowdown.”

BY THE NUMBERS:

York Region: all housing types:

- 16,118 - number of sales in 2013 worth more than $10 billion, of which $2.8 billion worth was sold in Markham and $2.5 billion worth in Vaughan and $2.2 billion worth in Richmond Hill. East Gwillimbury had the lowest market value with 319 sales worth $166 million
- $622,000 - average house price compared to $562,500 median house price in 2013;
- 98 per cent - average sale price to list price in 2013;
- 27 - average days on the market in 2013

Here is a look at housing price numbers by municipality, compared to the typically busiest month of the year - May.

Aurora:
- $747,000 - average detached house price in December compared to $628,000 in May 2013;
- $446,000 - average semi-detached house price in December compared to $437,000 in May 2013;
- $409,000 - average condominium townhouse price in December compared to $762,000 in May 2013. One condo townhouse sold in December;
- $459,000 - average condominium unit price in December compared to $343,000 in May 2013;
- $404,000 - average townhouse price in December compared to $417,000 in May 2013.

East Gwillimbury:
- $652,000 - average detached house price in December compared to $525,000 in May 2013;
- $413,000 - average semi-detached house price in December compared to $380,000 in May 2013;
- There were no condominium townhouses or units sold in either December or May 2013;
- $351,000 - average townhouse price in May 2013 as no townhouses were sold in December.

Georgina:
- $329,000 - average detached house price in December compared to $344,000 in May 2013;
- $305,000 - average semi-detached house price in May 2013, as no semi-detached homes were sold in December;
- $194,000 - average condominium townhouse price in May 2013, as no condo townhouses were sold in December;
- $221,000 - average condominium unit price in December compared to $186,000 in May 2013;
- $295,000 - average townhouse price in December compared to $312,000 in May 2013.

King:
- $994,000 - average detached house price in December compared to $940,000 in May 2013;
- $245,000 - average semi-detached house price in May 2013, as no semi-detached homes were sold in December;
- No condominium townhouses were sold in December or May 2013;
- $305,000 - average condominium unit price in May 2013, as no condo units were sold in December;
- $695,000 - average townhouse price in May 2013, as no townhouses were sold in December.

Markham:
- $858,000 - average detached house price in December compared to $816,000 in May 2013;
- $515,000 - average semi-detached house price in December compared to $493,000 in May 2013;
- $415,000 - average condominium townhouse price in December compared to $422,000 in May 2013;
- $343,000 - average condominium unit price in December compared to $364,000 in May 2013;
- $541,000 - average townhouse price in December compared to $490,000 in May 2013.

Newmarket:
- $517,000 - average detached house price in December compared to $570,000 in May 2013;
- $395,000 - average semi-detached house price in December compared to $382,000 in May 2013;
- $325,000 - average condominium townhouse price in December compared to $334,000 in May 2013;
- $319,000 - average condominium unit price in December compared to $183,000 in May 2013. One condo unit sold in May 2013;
- $416,000 - average townhouse price in December compared to $400,000 in May 2013.

Richmond Hill:
- $940,000 - average detached house price in December compared to $893,000 in May 2013;
- $469,000 - average semi-detached house price in December compared to $547,000 in May 2013;
- $424,000 - average condominium townhouse price in December compared to $348,000 in May 2013;
- $302,000 - average condominium unit price in December compared to $319,000 in May 2013;
- $540,000 - average townhouse price in December compared to $538,000 in May 2013.

Vaughan:
- $871,000 - average detached house price in December compared to $795,000 in May 2013;
- $534,000 - average semi-detached house price in December compared to $540,000 in May 2013;
- $439,000 - average condominium townhouse price in December compared to $456,000 in May 2013;
- $350,000 - average condominium unit price in December compared to $342,000 in May 2013;
- $525,000 - average townhouse price in December compared to $515,000 in May 2013.

Whitchurch-Stouffville:
- $723,000 - average house price in December compared to $667,000 in May 2013;
- $437,000 - average semi-detached house price in December compared to $424,000 in May 2013;
- $247,000 - average condominium townhouse price in December compared to $231,000 in May 2013;
- $392,000 - average condominium unit price in December. No condo units sold in May;
- $388,000 - average townhouse price in December compared to $432,000 in May 2013.

- Toronto Real Estate Board