Purchasers undeterred by rising values as they move to secure detached homeownership at 'affordable' price point, says RE/MAX Hallmark

Bank of Canada move to lower interest rates expected to accelerate already heated market

TORONTO, July 21, 2015 /CNW/ - Affordability continued to be a key driver in the search for detached homes, despite double-digit increases in average price in the 416 area code and York Region in the first six months of 2015, according to RE/MAX Hallmark Realty Ltd., one of the Greater Toronto Area's (GTA) largest real estate franchises.  

RE/MAX Hallmark examined sales and price appreciation in 35 neighbourhoods in the Toronto Real Estate Board's (TREB) 416 area code and nine communities in York Region and found that the average price of detached homes escalated 10 per cent or more in 63 per cent (22) of 416 neighbourhoods and 67 per cent (six) of York Region districts year-to-date 2015, compared to the same period one year ago.

"Scarcity of product, coupled with low interest rates, served to drive prices of detached homes to new heights during the first half of the year," says Ken McLachlan, Broker-Owner, RE/MAX Hallmark Realty Ltd. "Virtually all single-detached homes in TREB's central core have surpassed the million dollar mark, with the average ranging from just over a million dollars in Armour Heights, Bathurst Manor (C06) to close to $3 million in York Mills, Bridle Path, Hogg's Hollow (C12). Yet, purchasers continue to march forward, adjusting expectations to ever-changing financial realities, broadening their search to include areas bordering hot pockets and beyond."

Sales figures surged in a number of communities in the 416 and York Region as the trend gained traction in 2015.  Thirteen out of 35 neighbourhoods in the 416 experienced a substantial increase in detached home sales, including Armour Heights and the Bathurst Manor (C06) where the number of homes sold was up 53.8 per cent (123 vs. 80).  For those purchasers intent on remaining within the city's central core, detached properties north of the 401 offered the "best bang for their buck" with average price sitting at a year-to-date average of $1,010,711 – the lowest in the central core.  Sales of detached homes in High Park, Swansea, Roncesvalles and South Parkdale (W01) jumped 37.5 per cent (72 to 99) in 2015, with heated demand pushing the average price of a detached home over the $1.2 million threshold. York Region also experienced a significant uptick, with detached sales in Aurora, King, Newmarket, and Whitchurch-Stouffville up over 25 per cent compared to one year earlier.

Home buying activity was strongest in York Region, where overall detached sales were up 18.2 per cent in the first six months of 2015, rising from 5,338 one year ago to 6,310 units. The city's West End experienced a nine per cent upswing, with the number of homes sold climbing to 2,068 units, up from the 1,897 posted one year ago.  Demand in the central core drove sales up to 2,252 units, an 8.2 per cent increase over the 2,081 homes reported sold in the first six months of 2014.  Detached sales rose a nominal 1.5 per cent to 2,358 units in the city's East End where tight inventory levels during the first six months of the year served to limit activity. 

Some of the city's most coveted  --and affordable – neighbourhoods for detached housing saw a decline in sales as listings dried up during the first and second quarters of 2015.  Perhaps the best example was noted in the East End, where sales in Riverdale, Leslieville, Danforth (E01), Birchcliffe, Cliffside (E06), Milliken, Agincourt North, Agincourt South (E07), and Rouge, Malvern (E11) declined 9.3, 12.1, 6.4 and 14.3 per cent respectively.  Not surprisingly, these areas had an average price of under $1 million, ranging from $621,912 in Rouge, Malvern to $960,837 in Riverdale, Leslieville, Danforth. Competition has been intense in recent months, no more so than in Riverdale, Leslieville and the Danforth where days on market fell to 10 in June and the sales-to-list price ratio hit 110 per cent. 

The July 15^th Bank of Canada move to cut interest rates a quarter of a percentage point to .5 per cent is expected to further accelerate home buying activity. 

"A five-year fixed term now hovers at 2.69 per cent at a chartered bank, even less at a credit union or trust company," says McLachlan.  "There's no telling where mortgage rates will drop to in the weeks and months ahead.  The stimulation will create even greater urgency in an already heated housing market."

The most serious price appreciation in the 416 during the first half of the year occurred in neighbourhoods priced under $1 million. Birchcliffe, Cliffside (E06) led the city with a 25.4 per cent increase in values, bringing the average to $724,187 year-to-date June, up from $577,567 one year ago. The Scarborough community -- nestled between the popular Beach area and the Scarborough Bluffs -- has experienced a serious upswing in demand due to affordability and close proximity to Toronto's downtown core. Cliffcrest, Scarborough Village, Guildwood (E08) posted a gain of 23.9 per cent -- with average price hovering at $754,437 -- an increase of close to $150,000 over the June 2014 year-to-date average of $609,047.  The Rouge, Malvern area (E11) experienced a 19.2 per cent increase in price, rising to $621,912 from $521,643 one year earlier.

Overall, the East End and York Region posted the greatest increases in average detached housing values at 15.5 and 15 per cent respectively during the first six months of 2015, with prices rising to $727,221 and $934,207 respectively.  The Central Core saw a 12.1 per cent increase to $1,616,682 in average price year-to-date 2015, while values in the West End appreciated 10.3 per cent to $822,539 during the same period. 

Detached Home Sales (January -June 2015 vs. January to June 2014)
Top Five Performing Markets in the 416 Area Code
	Sales	Sales	%	Average	Average	%
Market	2015	2014	Increase	Price 2015	Price 2014	Increase
C06	123	80	53.8%	$1,010,711	$854,734	18.2%
W01	99	72	37.5%	$1,246,339	$1,155,041	7.9%
W05	183	146	25.3%	$637,588	$594,110	7.3%
C07	263	222	18.5%	$1,257,458	$1,089,879	15.4%
E08	204	173	17.9%	$754,437	$609,047	23.9%
Detached Home Sales (January -June 2015 vs. January to June 2014)
Top Five Performing Markets in York Region
	Sales	Sales	%	Average	Average	%
Market	2015	2014	Increase	Price 2015	Price 2014	Increase
Aurora	413	314	31.5%	$861,151	$766,958	12.3%
King	184	141	30.5%	$1,030,925	$975,899	5.6%
Newmarket	657	508	29.3%	$679,363	$598,799	13.5%
Whitchurch/
Stouffville	421	333	26.4%	$835,818	$693,825	20.5%
Vaughan	1,419	1,141	24.4%	$1,004,433	$871,039	15.3%
Source: RE/MAX Hallmark, Toronto Real Estate Board

RE/MAX Hallmark Realty Ltd. is one of the largest real estate franchises in Ontario, with more than 700 sales associates operating out of 10 offices throughout the Greater Toronto Area, as well as the Muskoka Region. The team specializes in all aspects of real estate, including residential, recreational and commercial properties. RE/MAX Hallmark is firmly entrenched in the communities it serves through its involvement in Children's Miracle Network and grassroots fundraising initiatives. Visit the RE/MAX Hallmark website at: www.torontohomesandcondos.com

SOURCE RE/MAX Hallmark Realty Ltd.

Ken McLachlan, Broker-Owner, RE/MAX Hallmark Realty Ltd., 416.565.4572, [email protected]; Eva Blay-Silverberg, Point Blank Communications, 416.505.0627, [email protected]