Real Estate Cheat Sheet: detached homes are for millionaires
This past month’s real-estate news highlights the creeping desperation of homebuyers, but also holds out a few small glimmers of hope, primarily for renters and prospective condo owners.
Here, the four things you need to know about Toronto’s real-estate market right now.
1. A detached home will run you almost a million dollars, on average
According to the latest Toronto Real Estate Board figures, sale prices for all home types were up in April, year over year. The most mind-blowing statistic to come out of April’s numbers, though, has to do with detached homes, the perennial top-performers in Toronto’s real-estate market. Get this: thanks to a 13.2 per cent price increase over April 2013, the average detached home in Toronto now costs $975,670. That’s almost a million dollars. On average. As usual, realtors are attributing the price growth to a shortage of detached listings. It’s supply and demand—but mostly, it’s demand. (Semi-detached prices were also up in April, at an average of $702,332.)
2. Realtors still hate Toronto’s land transfer tax
It should come as no real surprise that people who get paid to facilitate real-estate transactions are dead-set against taxes on real-estate transactions. And yet, possibly because this is an election year, the Ontario Real Estate Association decided to issue a reminder last month, anyway. A report completed for OREA by Atlus Group Economic Consulting says eliminating Toronto’s land transfer tax could give the local economy a $2 billion boost and create 12,000 new jobs—figures which may or may not have any basis in reality. No matter how many reports like this are released, though, it’s not likely that city council will repeal the tax in the foreseeable future. It generates somewhere in the neighbourhood of $300 million for the city each year, and a budget hole that large would be very difficult to fill.
3. Condo land is getting cheaper
The Globe reports that land prices for condo development (that is, the amounts developers are paying for bare plots of earth upon which to build towers) took a gentle dive during the first three months of 2014. They’re down about 4 per cent, to $55 per square foot. This could point to a general slowdown in condo construction, which, if it’s actually happening, would help allay fears of oversupply in the market. More good news for condo owners: the latest Urbanation numbers show sales holding steady.
4. Purpose-built rental is coming back…kinda
New rental-apartment construction in Toronto essentially died out in the 1970s, but the Star reports that rent-control reforms are starting to have an effect. A few developers are beginning to put their money behind purpose-built rental properties, like The Heathview, in Forest Hill. If the trend picks up, Toronto’s murderously low rental-vacancy rates might start to creep up, and maybe (just maybe!) finding an apartment in this town will become a bit less of an ordeal.