Tamsin McMahon – The Globe and Mail

Economists largely predicted that Toronto’s housing market would be the main winner from the downturn in oil prices and rock-bottom interest rates and so far the region’s housing market is proving them right.

Comment: No, the market is surging because it has been surging for almost 20 years now. Oil prices really don’t have anything to do with the price of condos in Toronto or how many houses sell.

Home sales in the Greater Toronto Area rose 6.1% in January compared to a year earlier, according to new figures from the Toronto Real Estate Board. Average prices jumped 4.9% even as the region saw a spike in new listings, which rose 9.5% compared to a year earlier.

Comment: And sales were up 8-9% before oil prices fell. So what?

The growth was driven mainly by sales in the outside of the city. Sales of detached and semi-detached houses in Toronto dropped more than 2%, while sales of townhouses fell nearly 10%. Only condo sales saw a yearly gain of 6%.

Comment: Because house listings continue to be scarce in the 416. But demand… demand does not let up.

January buyers instead flocked to the suburbs, sending sales of condos soaring 23%, while detached home sales jumped 10%. The shift is almost certainly driven by affordability as the average detached home in Toronto sold for nearly $950,000 in January compared to $650,000 outside the city.

It’s the second month of strong growth for the region’s housing market even as winter is considered the slowest time of year for home sales. December sales rose by nearly 10% compared to a year earlier while average prices were up 7%.

Comment: Last winter was a bit slow because of the weather, so the recent numbers are a touch exaggerated.

Despite a strong start to the housing market, Toronto is feeling the effects of the broader economic uncertainty from falling oil prices and the plummeting loonie. The amount of industrial space leased in the region dropped 25% in January compared to the same time last year, while leased office space fell 3.3%. The sales price of most commercial buildings also dropped across the region, with industrial prices falling 40% to $80 per square foot.

“On the one hand, we have the potential for the drop in oil prices to impact the Canadian economy as a whole,” Toronto Real Estate Board president Paul Etherington said in a statement. “On the other hand, we have the potential positive impacts of the lower Canadian dollar on exports from southern Ontario. As we move toward the spring, we should have a better indication of the net effects on commercial real estate markets in the GTA.”

Comment: A lower Canadian dollar is better for the overall economy. Oil prices affect mainly one province. The lower BoC prime rate benefits the entire country. We are still in good overall shape.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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