Lots of Toronto homeowners are looking at the eye-popping prices houses and condo units in the city are fetching these days and deciding it’s time to cash in.
In most years, Toronto’s real estate market slips into somnolence by the mid-summer and agents head to their own cottages to recover from the spring maelstrom. But 2012 is different - especially in the upper echelons of the market. On just one day this week five agents put forward interesting and luxurious properties as candidates for “Home of the Week” in Globe Real Estate. That’s a pace that feels more like April than mid-July.
Ross McCredie, chief executive officer of Sotheby’s International Realty Canada, says high-end real estate sales have been hot in all of Canada’s big cities and nowhere more than Toronto. Calgary and Montreal are bustling too. Sales and prices in Vancouver have retreated from their 2011 peaks but lots of high-end houses are still selling above the asking price, he adds.
“The Toronto market is really the story,” he says.
He cited the relative strength of the Canadian economy, low interest rates, a migration from the suburbs toward the downtown and an influx of wealthy immigrants as the main factors driving the action. “A lot of people who weren’t thinking about selling their home are now thinking about it,” says Mr. McCredie. “It’s all about timing.”
The results of a study commissioned by his firm show that the number of listings in the GreaterToronto Area for houses valued at more than $1-million swelled by 29 per cent in the first half of 2012 compared with the first half of 2011.
The increase was surprising to Mr. McCredie, who thinks that many people are selling with the intention of sitting on the sidelines for a couple of years and then getting back into the market after a downturn.
But Mr. McCredie thinks the strategy may be mis-guided.
“You need to plan these things in advance an not just react,” he says of the sudden rush to list.
He doesn’t mind if people want to list, mind you, but he doesn’t see a big correction in prices coming in Toronto. Downturns are typically fuelled by a catalyst such as a sudden spike in interest rates, he points out. He doesn’t see rates rising sharply any time soon.
He know there’s lots of talk of over-heating in Toronto but he doesn’t believe the market is in a bubble.
“We actually don’t see it from our perspective.”
All of the new listings bring more choice for buyers, who so far have continued to step up. Sales in this segment in the first half of the year jumped 29 per cent to 3,113 from 2,405 in the first half of 2011.
The inventory of houses on the market for asking prices at above $1-milion in the GTA stood 31 per cent higher at the end of June than inventory at the same time last year.
In the first half of the year, the average number of days on the market for a property in this segment slipped to 31 from 34 in the same period last year.
Mr. McCredie says the jump in listings could erode some of those numbers in the GTA just as they have in Vancouver, but he believes sales will remain robust.
Besides, marquee condominim projects such as the Four Seasons Private Residences and the Shangri-La are set to open this year.
“You’ve got a lot of high-end product,” he says. “Those are condo markets like we’ve never had before.”