Toronto Real Estate Board President Mark McLean announced on November 5, 2015 that Greater Toronto Area REALTORS® reported 8,804 home sales through TREB's MLS® System in October 2015, the best result on record for the month of October.
"It is clear that many GTA households remain upbeat about home ownership because owning a home represents a high quality, long-term investment. We will see a big, new record this year for home sales reported through TREB's MLS® System," said Mr. McLean.
"Despite the record October result, I must point out that the Government of Ontario could hamper home sales in the near future. The Wynne government is seriously considering allowing municipalities throughout Ontario to institute a second land transfer tax on top of the existing provincial tax. Recent polling has shown that the great majority of Ontarians oppose this tax and would consider delaying a move if they were forced to bear the additional upfront cost," added Mr. McLean.
The MLS® Home Price Index (HPI) Composite Benchmark was up by 10.3 per cent year over year in October. Over the same period, the average selling price for all home types combined was up by 7.3 per cent to $630,876. Price growth continued to be driven by the low-rise market segments.
"Record sales coupled with a constrained supply of listings in many GTA neighbourhoods has underpinned very strong price growth throughout 2015. Even if we do see a greater supply of low-rise listings in the marketplace over the next year, market conditions will remain tight enough to see continued price growth well-above the rate of inflation," said Jason Mercer, TREB's Director of Market Analysis.
The commercial real estate results, of which there was 427,842 square feet of industrial, commercial/retail and office space leased during the month, represented a year-over-year decline of 39.4 per cent.
Industrial space represented almost three-quarters of all leasing activity, with deals completed for a total of 311,943 square feet – down by 39.6 per cent compared to October 2014.
The average industrial lease rate, for properties leased on a per square foot net basis with pricing disclosed, was $5.68 – up by 14.5 per cent annually. However, it should be noted that at least some of this increase can be attributed to the lack of deals for very large properties, which generally lease for relatively less on a per square foot basis compared to smaller properties. The average lease rates for commercial/retail and office properties were down compared to October 2014.
"We have seen volatility in commercial leasing and sales throughout 2015. This falls in line with the fact that there has been a fair amount of uncertainty with regard to the Canadian economy this year as well. It follows that many firms have put their real estate investment plans on hold until the direction of the Canadian economy becomes clearer," said Mr. McLean.
"Looking forward, the GTA regional economy seems poised to outperform from a growth perspective, relative to the rest of Canada. The unemployment rate is markedly lower than it was this time last year and the lower value of the Canadian dollar relative to the US dollar should have a positive impact on export-related sectors," continued Mr. McLean.
There was a total of 63 industrial, commercial/retail and office sales in October, for which pricing was disclosed – down only slightly from 65 deals in October 2014. Sale prices, on a per square foot basis, were up on a year-over-year basis for all three market segments. Similar to the industrial leasing market discussed above, the large increase in the industrial selling price was also due to the lack of large property sales this past October compared to October 2014.