Greater Toronto Area First-time purchasers, working in tandem with move-up buyers, have bolstered home-buying activity in the Greater Toronto Area so far this year. While the 10,518 sales recorded to date are 14 per cent off the 12,176 reported during the same period one year ago, the strength of the market overall has been hampered by limited inventory levels.
In February alone, new listings were off by nine per cent and active listings were down by one per cent. As a result, 14 key districts in the east, west, and centre core experienced sales to list ratios of 100 per cent or more.
Days on market have fallen to 27 in February, down from 36 one month earlier. Average price continues to climb, up five per cent in February, and five per cent year-to-date, now hovering at $442,978.
For buyers entering the market for the first time, freehold opportunities in the city are few and far between under the $300,000 price point, about two thirds of average price.
Condominiums have become the first step to homeownership in the GTA, with approximately 63 per cent (1,927 units) selling under the $300,000 threshold, compared to freehold properties at 37 per cent (1,128 units).
C01, bordered by Lake Ontario to the south, Yonge St. to the east, Dufferin St. to the west, and Bloor St. to the north, home to Toronto’s condominium boom, is the hub of new and resale activity in the GTA. Just 77 resale apartment and town house units are currently listed for sale under $275,000 in the district, which has prompted competitive offers in recent weeks.
King St. West and Liberty Village attract the lion’s share of first-time buyers, many of whom are young, single, and work in the downtown core. To the east, the Distillery District (Corktown) is gaining traction with entry-level purchasers who are drawn to product and price.
Buyers on a tighter budget can reduce the cost of owning a condominium apartment by foregoing the parking spot, which could add as much as $40,000 to the final price tag.
Young families seeking affordable freehold properties may find older homes in neighbourhoods like East York, Leslieville, parts of Scarborough, Humewood, Weston, New Toronto, Mimico, and Longbranch, starting at $400,000. Although greater value can be realized in the city’s suburban communities, some first-time purchasers are digging deep to live in central core neighbourhoods, especially those located on the subway line.
It appears that today’s real estate purchasers are prepared to make sacrifices to realize homeownership, much like previous generations.
Many now come to the table with a reasonable down payment —with a little help from their parents—and realistic expectations.
As such, recent changes to mortgage rules have not deterred purchasers in the GTA. Given an improving economic picture and the threat of higher interest rates, home-buying activity is expected to continue unabated throughout the remainder of the year.
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