A three-bedroom home in the popular Bedford Park neighbourhood is coming on the Toronto-area property market this week — even though it is the time of year when lots of listings typically quietly disappear for the holidays.
However, 2017 has been anything but average in the Greater Toronto Area housing market and the fickleness appears set to continue right into 2018.
Real estate agent Andre Kutyan of Harvey Kalles Real Estate Ltd. says many buyers — particularly around the1-million mark — are eager to close deals before strict rules surrounding mortgage debt come into effect on Jan. 1. Mr. Kutyan claims that, before, agents normally advised sellers to pause after the Christmas decorations came out.
Mr. Kutyan is listing 328 Deloraine Ave. with an asking price of $995,000. “I am expecting action on it even though we are in the second week of December.”
The detached north Toronto home is in the coveted John Wanless Jr.. Public School district, and he believes buyers will be competing when it is time to assess offers on Dec. 18. “They’re prepared to put pen to paper before the stress test goes through.”
The “stress test” is the forthcoming policy change issued by Canada’s banking regulator. The Office of the Superintendent of Financial Institutions will need the lenders under its watch to make certain that home buyers who take out an uninsured mortgage may still afford to repay the debt if interest rates climb. Holders of insured mortgages are already required to pass a pressure test.
Mr. Kutyan claims the fourth quarter of 2017 has been busy in a way that reminds him of the last 3 months of 2007. Then, buyers were scurrying to secure a deal before the Toronto land transfer tax came into effect on Feb. 1, 2008.
Data from the Toronto Real Estate Board reveal that new listings in November jumped 37.2 percent from November of 2016. The most recent number does not indicate, however, how a lot of the “new” listings really represent the relisting of a property that didn’t sell on sell nighttime. Agents point out that the amount can appear artificially high when the exact same property is listed more than once in the same month.
TREB also points out that 2016 marked a low level of listings so the contrast is more dramatic.
Douglas Porter, chief economist at Bank of Montreal, states active listings in the GTA surged 111 percent last month compared with November of 2016.
He is not surprised that costs have experienced a correction — with the typical detached cost back below the1-million mark (at $996,527) — after a runup he likens to “making like bitcoin to begin the year.”
“With a lot of the rest of the nation still reporting strong gains in both sales and costs, Toronto very much seems like the outlier again,” he says.
Mr. Porter says the cooling in Toronto partially reflects a return to reality after the insanity of the first quarter, when prices were rising at a clip faster than 30 percent on a year-over-year basis. Prices also have dropped from their peak in the spring because of new policies introduced by Ontario in April.
Mr. Kutyan says the amount of showings he’s booked on recent listings are a great barometer of buyer activity. A semi-detached home at 1337 Lansdowne Ave., by way of instance, tallied 2,903 online strikes on the Multiple Listing Service, 60 agent showings, 100 groups throughout the open house and 14 offers.
He’d put an asking price of $695,000 in the hope it would bring plenty of possible buyers. He believed spirited bidding could bring the final cost to $950,000 or so.
“I shook my head in the people coming through. I know I am listing it harshly — and that’s part of this plan, of course.”
After six days on the current market, the home sold for $1.026-million.
“We are definitely seeing a hurry on these,” he says of homes around the1-million mark.
He adds that the condominium segment is less influenced by the more stringent stress test, but it is just as hot. “At any given price point, it is on fire.”
Condo buyers — especially those in the lower end — often need insured mortgages as they’re more likely to be first-time buyers and might not have large down payments.
Mr. Kutyan believes condominium units are in high demand because they sell for an average cost of $555,396 from the fundamental 416 area code, in comparison to an average of $802,220 for all housing types from the 416.
“People are realizing to own property in the city of Toronto, it is going to have to be sky distanc”
He recently recorded a two-bedroom, two bath unit of approximately 750 square feet available on Nelson Street in the downtown core. He also set a low asking price of $488,000.
“My customers literally had to move from their condo for a couple of days — since they have got a young kid — to adapt all of the showings.”
Mr. Kutyan states the property received 2,002 strikes on MLS, 104 agent appointments and five offers. It sold for $581,800. “The man who obtained it won by a hair.”
Looking forward, he expects sales in early January to be slow, which is very typical for the beginning to the year. But he believes that the first few months may be less busy because some sales are pulled forward. “We might see a lull in the first quarter.”
Court judgment on data sharing
Another element that brokers will be watching closely is a recent ruling by the Federal Court of Appeal that allows more open sharing of sale costs from property transactions. The appeal court ruled that TREB couldn’t prevent its members from providing data about how much houses sold for. TREB argues that the clinic would breach privacy limitations and says it intends to seek leave to appeal the decision, in addition to an order staying the decision pending the outcome of the appeal, if allowed.
Some online services started posting information immediately after the judgment.
Davelle Morrison, an agent with Bosley Real Estate Ltd., believes that TREB should survey its members and discover how much enthusiasm they have for the struggle. In her view, TREB is squandering money on legal fees. She launched a petition asserting that TREB members must be consulted after representatives started sharing their perspectives in Facebook groups.
“This is a tiny waste — only accept the long run,” she says.
Until the judgment, TREB realtors could disperse limited sales data up to 100 customers at a time but couldn’t publish all data widely. That meant that a homeowner who wanted to understand what a neighbor’s home sold for, by way of instance, would need to call an agent to inquire.
Ms. Morrison says some brokers fear that the more open sharing of information will lead customers to perceive brokers as less useful, but she disagrees.
She points out that there are 49,000 agents in Toronto and anyone interested in real estate may keep a few on speed dial.
Excellent brokers, she adds, provide a good deal more to their customers than simply passing on selling costs.
Ms. Morrison would love to see the information from wide release after a transaction has closed. Right now, some rates are supplying details after an agreement was signed but before closure. That strategy may give consumers misleading information because some deals fall through, she claims.
Mr. Kutyan agrees that the broad distribution of information will not affect well-established realtors.
“I feel it could cut out more of the riff raff agents working part-time,” he says.
He says he provides a detailed sales history to his customers, together with information about other revenue on the road.
“Every block of every street differs,” he says. “I understand how to decode this data.”
However, Mr. Kutyan says he is not a fan of the possibility of releasing all the information because TREB members need to pay dues and that is part of the value members get for their cash.
Courtesy: The Globe And Mail