TORONTO, March 5, 2012 Greater Toronto REALTORS® reported 7,032 sales in February 2012 – up 16 per cent compared to February 2011. New listings were also up over the same period, but by a lesser 11 per cent to 12,684. It is important to note that 2012 is a leap year, with one more day in February. Over the first 28 days of February, sales and new listings were up by ten per cent and six per cent respectively.
“With slightly more than two months of inventory in the Toronto Real Estate Board (TREB) market area, on average, it is not surprising that competition between buyers has exerted very strong upward pressure on the average selling price. Price growth will continue to be very strong until the market becomes better supplied,” said Toronto Real Estate Board President Richard Silver.
“It is important to note that both buyers and sellers are aware of current market conditions. This is evidenced by the fact that homes sold, on average, for 99 per cent of the asking price in February,” continued Silver.
The average selling price in the TREB market area was $502,508 in February – up 11 per cent compared to February 2011. The Composite MLS® Home Price Index for TREB, which provides a less volatile measure of price growth compared to the average price, was up by 7.3 per cent compared February 2011.
“If tight market conditions continue to result in higher than expected price growth as we move into the spring, expectations for 2012 as a whole will have to be revised upwards,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “While price growth remains strong, the average selling price remains affordable from a mortgage lending perspective for a household earning the average income in the GTA.”
The trend of rising average prices and low inventory seen in 2011 continued throughout the first month of 2012. Sales were up by 8.8-percent compared to the same period year-over-year, from 4,199 in January 2011 to 4,567 in January 2012. According to TREB’s latest Market Watch, sales growth was strongest for low-rise homes surrounding the City of Toronto. The average price has risen by 8.9-percent year-over-year, to $463,534 from $425,762.
TREB President Richard Silver continues to pride Toronto’s mar-ket on home ownership affordability as a result of low mortgage rates, despite rising average prices; "A favourable affordability picture bolstered by very low posted fixed mortgage rates has kept home buyers confident in their ability to achieve the Cana-dian goal of home ownership."
February So Far
The first two weeks of February represented a 13-percent year-over-year increase in new listings, making it better supplied that the past recent months. As quoted by TREB’s President Richard Silver, "The GTA resale home market became better supplied during the first 14 days of February. If growth in new listings continues to outstrip growth in sales this year, competition be-tween home buyers will ease. More balanced market conditions on a sustained basis would result in a lower annual rates of price growth later in 2012,"
There were 3,206 sales and the average price was $491,493, both numbers up by 9-percent year-over-year. Homes are selling quick and on average, at 99-percent of the asking price.
TREB members of the Commercial Division reported a total of 464,008 square feet of leased commercial space in January 2012. This marked a 41-percent decrease when compared year-over-year. Industrial space accounted for 86-percent of total square footage leased, down 46-percent compared to January 2011. Nonetheless, the average lease rate for industrial properties in-creased by 12.3-percent in comparison to January 2011, from $4.21 per square foot net to $4.73 per square foot net.
Commercial sales, on another note, were up year-over-year by 13-percent for the industrial properties and by 10.5-percent for other commercial properties. Average selling prices per square foot were down for by 9-percent for industrial properties and down by 20.3-percent for other commercial properties.
The leasing of commercial space is closely tied with the United States and the global economy. While there is starting to be a more positive outlook on the United States economy, the same can’t be said for the economic recession in Europe, leaving firms cautious and likely putting real estate endeavours off. "In the short term, this means that unless it is absolutely necessary for a firm to move or take on more space, real estate decisions will likely be on hold," said Commercial Division Chair Larry Purchase.
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