In 2015, industry pundits were predicting that the scarcity of real estate listings in Toronto would continue into 2016. So far, they appear to be right.
Agents from central Toronto to the suburbs say listings are in the deep freeze – even for a January, when the market is normally cool.
The paltry number of houses for sale means sellers hold more power and prices remain aloft.
Jason Mercer, director of market analysis for the Toronto Real Estate Board, doesn't have numbers for the first half of the month, but he's not surprised that listings are rare compared with the demand from buyers. The same dynamic has been hampering sales for a while.
"We were expecting to see those tight market conditions continue," Mr. Mercer says.
While new listings rose by 8.4 per cent in December compared with December of 2014, sales jumped 11.9 per cent in the same period.
It's too soon to tell if this week's decision by the Bank of Canada to hold its key lending rate at 0.5 per cent will encourage homeowners to take some action. The central bank is optimistic the global economy will pick up this year. That relatively positive outlook may relieve some of the anxiety Canadian consumers have been feeling about this country's financial markets.
TREB is forecasting that sales in the Greater Toronto Area will come in at between 96,500 and 105,000 this year. Depending on how the final number stacks up against last year's record 101,299 sales, 2016's sales will either set a new milestone or stand as the second highest on record, Mr. Mercer predicts.
"Either way you cut it, that suggests that there are a lot of people out there looking to buy," Mr. Mercer says.
Twelve per cent of GTA households are very likely to purchase a house over the next year, according to the results of a survey released by TREB this week. Ipsos Reid conducted the online survey of 1,000 potential homebuyers in November. The results are considered accurate to within plus or minus 3.5 percentage points.
First-time buyers made up about half of those intending to buy.
Mr. Mercer says a few different forces are at play this year, including central bank policy, the impact of bond yields on fixed mortgage rates and affordability in the market.
He notes the slim supply is particularly noticeable in the low-rise segment of the market.
High-rise condos are more widely available for sale in Toronto, but agents say that many buyers are looking for the relatively rare units with two or three bedrooms, expansive floor space and character.
Toronto real estate agent Manu Singh was getting ready for a New Year's Eve dinner and still wondering if he would be able to end 2015 with the sale of a double-storey penthouse at the Zed Lofts in the King Street West neighbourhood.
The buyers, the sellers and the agents all had parties to attend that evening, he says, so they were keenly awaiting the outcome.
At 6 p.m., he made a final call to the buyer's agent and received good news – the last signatures were in place and the penthouse was sold for $1.390-million.
The sign-offs came more than a week after the offer first landed on Dec. 23.
"There's such a scarcity of listings – let alone unique listings."
Mr. Singh says Penthouse 2 at 38 Niagara St. is unusual because, in addition to the 2,000 square feet of space on two interior levels, there's another 1,000 square feet outdoors on the expansive roof terrace.
It was also outmoded by downtown Toronto condo standards because it still had the same kitchen and floors it had when the building was finished in 2007. Mr. Singh says competing units in the $1.3-million-to-$1.5-million price range in surrounding buildings had up-to-the-minute renovations.
Mr. Singh had listed the unit at the end of November with an asking price of $1.399-million. One offer came within a few days, but it was below the asking price.
Then the agent and his client talked about pulling the unit off the market during the Christmas holidays so they could put up a fresh listing in January.
But Mr. Singh, who had left for Montreal to visit family, was checking online to see how many people were viewing the property.
"It was still getting a lot of reaction."
He was also keeping an eye on the Toronto weather, which remained unseasonably warm. As well, he was able to drill further into the data and see that most of the online hits were coming from viewers on mobile devices, Mr. Singh says.
"From that, I was able to tell that people were out and about."
He and the client had decided to hold on a bit longer and that's when the offer came. The seller accepted the buyer's offer at slightly below the asking price and then the two sides negotiated a closing date. All that was left was the formal review of the condo building's status certificate and that's when the process hit a speed bump because some offices slow down for the holidays, Mr. Singh says.
"During that time you have to make sure the lawyers are working."
Shawn Lackie, a real estate agent with Coldwell Banker RMR Real Estate, says there's an absolute dearth of listings in areas such as Oshawa, Whitby and Pickering. He recently sold a house in Whitby in the $650,000-to-$700,000 range and there were only three others listed in that segment in Whitby, with another two listed in nearby Brooklin.
Buyers, he says, are in a much better bargaining position than they are in the spring because there are fewer people out looking.