Real estate agent Ira Jelinek has experienced ebbs and flows in the Toronto real estate market in 2019.
So far in April, deals are flowing.
“Everything I list has sold very quickly,” Mr. Jelinek of Harvey Kalles Real Estate Ltd., says.
Last week, Mr. Jelinek listed a downtown townhouse for sale at 13 New St. with an asking price of $2.499-million. Within a couple of days, it sold for the full asking price.
Mr. Jelinek says the townhouse in the fashionable Yorkville area is a rare find. It’s a freehold property with two-car parking and a contemporary interior. There’s also very little lawn or garden to worry about.
“It was a good condo alternative for people who don’t want to be in a condo,” he says. “There’s not too much maintenance at all.”
While sales in some areas of the city are slow, demand is high for downtown properties, Mr. Jelinek says, as baby boomers and empty nesters downsize from large houses.
April’s activity may be perking up a bit after dismal winter weather in Toronto led to grim real estate sales in March.
The Canadian Real Estate Association (CREA) reports that sales across the country fell 4.6 per cent in March compared with the same month in 2018. The result was almost 12 per cent below the 10-year-average for March.
“March results suggest local market trends are largely in a holding pattern,” Gregory Klump, CREA’s chief economist, says. “While the mortgage stress test has made access to home financing more challenging, the good news is that continuing job growth remains supportive for housing demand and should eventually translate into stronger home sales activity pending a reduction in household indebtedness.”
Mr. Jelinek sees signs of improvement: He also sold two condo units in a matter of days last week.
In one case, a 650-square-foot loft at the Merchandise Building was listed with an asking price of $549,900.
Mr. Jelinek did not set a date for reviewing offers, but soon three bidders were vying for the hard loft in a former warehouse. The seller accepted an offer just above the asking price, he says.
A 500-square foot unit in the King Street West area also sold quickly in the same price range, he says.
In Mississauga, where high-priced homes have been sitting for long stretches, the market has started moving.
Mr. Jelinek’s team helped buyers purchase a house with an asking price of $3.99-million.
The sellers accepted the buyer’s offer of $3.86-million, Mr. Jelinek says. The house had previously been listed at $4.2-million.
National Bank of Canada reports that the Teranet-National Bank House Price Index slipped 0.3 per cent in March from February to mark the sixth consecutive monthly decline.
In Toronto, the index dipped 0.3 per cent in March from February.
The Teranet-National Bank House Price Index records prices after they have been recorded at land registry offices, so the numbers lag those of local real estate boards.
Marc Pinsonneault, senior economist at National Bank of Canada, points out that price weakness does not mean collapse.
In Toronto, Canada’s largest real estate market, condo apartment prices have risen for 17 consecutive months, while prices of other types of dwellings have lost only 1.4 per cent over the past six months, Mr. Pinsonneault points out.
As the market heads into the Easter and Passover holidays, Mr. Jelinek says new listings appear to be arriving at a healthy pace. He says the late arrival of spring in Toronto may have held the market back so far.
Once spring flowers and trees come into bloom, he expects another spike in activity.
Real estate agent Cheri Dorsey McCann of McCann Realty Group Ltd. says the market is very competitive at prices lower than $2.5-million. But at prices above that mark, buyers have a stronger hand in negotiations than they did in years past.
“I would say the higher end is still on the soft side.”
Ms. Dorsey McCann says the federal banking regulator’s tighter rules around mortgage lending are keeping buyers in lower price brackets or holding them back from entering the market at all. The foreign buyers tax introduced by the Government of Ontario in 2017 is also weighing on sales, she says.
“It’s definitely affecting everyone.”
Ms. Dorsey McCann says land transfer taxes are also taking a bite from the budgets of buyers.
“It’s a money grab constantly.”
Ms. Dorsey McCann says sellers at the high end need to be realistic about setting asking prices. She advises homeowners to look at how much their property has appreciated since 2016 – instead of comparing today’s prices with the high water mark of early 2017.
Still, she is seeing signs of improvement this month. Mortgage rates have come down in 2019 and some buyers are jumping in to purchase houses that sat through the fall and winter.
“I think there’s more confidence,” she says. “And interest rates have helped.”
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