From 30 percent drops to 12 percent jumps - why some GTA real estate markets are hot while others aren't

From 30 percent drops to 12 percent jumps – why some GTA real estate markets are hot while others aren’t

In May, housing prices in the GTA showed which areas are hot and which are not.

Across the board, despite home prices rising 9.4 percent year-on-year, May was the third consecutive month-on-month drop, down nearly three percent from April, according to the latest report from the Toronto Regional Real Estate Board (TRREB). . ).

But even within Toronto’s city limits, some areas have seen significant increases while others have declined.

Bridle Path, a Tony area in North York, saw a 12 per cent jump in its median home price from April to May, while West Midtown – from St Clair Avenue West to Eglinton Avenue West, and Dufferin Street to St. Young Street – 30 per cent.

An important reason for the variation in home prices across the GTA is that some homebuyers rely more on higher mortgages than others. If a homeowner gets a larger loan from the bank, they will be more sensitive to higher interest rates, real estate experts say.

The lender usually doesn’t benefit homeowners in luxury areas like Bridle Path which has seen average home prices around $3.5 million as much as some other neighborhoods like West Midtown that have seen average home prices around $1.7 million.

The interest rate hike brought the median sale price of all homes and condos down to $1.21 million, down $121,000 from the February market peak of $1.33 million.

Brendan Powell, recording broker at Bspoke Realty Inc.

Other regions saw massive price gains from fall 2021 to February and March 2022 but then quickly retreated from the peak. “The pendulum has swung a lot and we are now seeing rebalancing,” Powell said.

He said the pandemic has also led to more people moving out of town to buy bigger properties with more green space, artificially driving up prices. For example, the median price of a detached home in the 905th district fell about $94,000 between April and May compared to Toronto, which saw those homes drop by about $33,000.

“The average home price in Durham was $1.3 million a few months ago, so why buy a home so far out of town when you could buy a similar home in town?” Powell said.

“Many of the artificial pressures that drove prices outside the city are now beginning to recede.”

Rosedale Moore Park and St Andrews Bridal Bath-York Mills

In the area of ​​St. Andrews-Bridle Path-York Mills, TRREB reported a 12.71 percent increase in median home price from April to May, from $3.03 million to more than $3.4 million.

Rosedale-Moore Park saw a similar increase in the median home from $2.3 million in April to nearly $2.6 million in May, up 11.48 percent.

These luxury markets are more immune to higher interest rates and in some cases cash deals, said Karen Yulevsky, chief operating officer of Royal LePage, the corporate brokerage, which means that “interest rates have no bearing on that.”

Those markets are also less dependent on institutional money, said Danielle DeMerino, a Toronto-based real estate agent.

“In Rossdale, the homeowner uses more of his own money, so if the home costs $4 million, about $1 million is mortgaged,” she said. “They have not been heavily leveraged by the bank or lender.”

The median household income in Rossdale is $650,000, and the average cost of a four-bedroom detached home is about $4.5 million, which means the income can support more expensive properties and is less likely to depreciate.And the She said.

Bradford West Guylimbri

The median home price rose 12 percent from April to May with home prices rising from $1.16 million to more than $1.3 million.

The region is enjoying significant infrastructure growth with the Ontario government providing more than $2.5 million in local infrastructure in conjunction with the Bradford Bypass – a proposed 16.2-kilometre manageable highway that connects Interstate 400 and Interstate 404.

“These infrastructure projects will allow the region to experience continuous growth as there will be better access to GTA with bypass,” Yulevsky said.

West Lake Toronto and West Midtown

West Toronto Lakeshore, which includes the Roncesvalle-High Park-Swansea area, saw a massive 21.36 percent drop in median home price from $1.7 million in April to more than $1.3 million in May.

West Midtown saw an even larger 31.15 percent drop in median home price from $2.6 million in April to just over $1.77 million in May.

The main factor in the decline, DeMerino said, is that homebuyers in these neighborhoods are more dependent on institutional money.

“It’s more affordable neighborhoods than Rosedale or Forest Hill. You get the same kind of hideaway without spending $4 million on a home.” “But as mortgage rates go up, the cost goes up, it’s less likely to be affordable and prices go down to absorb it.”

Prices in the region have also increased by about 20 percent from the fall of 2021 Until February 2022, she added, housing prices were not sustainable and fell rapidly from their peak.

Burlington

The median home price in Burlington fell 14.75 percent with $1.3 million in April to more than $1.1 million in May.

Konrad Zurini, realtor with Re/Max Escarpment Realty Inc., said: Operating in Burlington, the city’s northeast, which hugs the border with Oakville, and the city’s southeast, which is the highest, have done “very well”.

However, the rest of Burlington – and as it nears Hamilton – has more inventory and has seen a drop in sales. Small semi-detached homes, with one or two stories and townhouses have not fared as well as first-time homebuyers or new potential buyers to see how the market settles.

“These entry-level properties don’t do well, but the high-end market doesn’t see a problem,” Zurini said.

People from Oakville also migrate to Burlington, since it is affordable, which helps with home prices in the northeastern part of town.

But on an annual basis, median home prices rose 14.48 percent from May 2021 to May 2022, according to TRREB.

Zurini said he expects to see price stability in Burlington over the summer as the market stabilizes.

“A third of the market in Burlington is still a seller’s market,” he said. “Buying today is cheaper than it was in February and the home will still go up significantly in value when you look at it on an annual basis.”

With files from Tess Kalinovsky.

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2022-06-07 10:00:33

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