Apr 7 | Posted by Barry Cohen

The Toronto housing market has been setting records month after month for a couple of years and there is no indication that the frenzy will be cooling down any time soon.  The months of March, April, May and June are the busiest time for real estate transactions and with our market already registering record breaking statistics for sales and average selling price where do we go from here?  It seems the answer to that question is “the suburbs”.

The 416 area code has a shortage of buildable land, and what is available is being swept up by contractors and used for high-rise condo towers.  Inventory in this highly desirable region is low, especially when it comes to detached and semi-detached properties so it only follows that prices continue to escalate driving a large number of buyers into the 905 communities around the perimeter of the city.

With the average price of a single detached home in the 416 surpassing the million dollar mark last year, many buyers, especially first-time buyers have been out-priced in town and are now turning to areas like Aurora, Newmarket and Milton to find a home.  It will come as no surprise then, that properties in these fringe areas are now experiencing multiple offers, bidding wars and over-asking price sales with no conditions.

Toronto Real Estate Board statistics indicate that sales in the 905 rose by 23 percent year-over-year while sales in the 416 saw an increase of just 12 percent in the same time period.  Benchmark prices told the same story about the two area codes as the price of detached homes in the city rose just over 10 percent while the suburbs witnessed an annualized increase of over 40%.  It used to be unusual to see homes in the outlying areas subjected to bidding wars, but as the inventory in the city remains low and the prices go ever higher, multiple offers in the 905 are becoming commonplace.

There are a number of factors behind the sudden increase in activity in the suburbs besides low interest rates.  Immigration is a strong catalyst as more new Canadians choose our great city for residence, in fact recent statistics report that the city fringe accounts for over 70 percent of immigration to the Toronto area.  Employment is another strong influence as more and more companies are setting up shop outside the downtown core.  Nearly half of all job growth is now located in the 905.  Foreign investment has been strong in the GTA for some time now, as overseas investors view our market as stable and safe and real estate as a wise investment.  But even these investors are finding the suburbs more available and affordable and there is a marked increase in the number of home transactions originating from buyers outside Canada.

Buying and/or selling property in and around the GTA has become very challenging and much more complicated as the market continues to soar.  Now more than ever, you need the expertise of a professional realtor to feel confident dealing with the urgency, negotiations and critical deadlines involved in real estate transactions in this overheated market.  I would be happy to work with you and use my 3 decades of experience to help you with your purchase or sale.  No one knows York Mills, Hoggs Hollow and St. Andrew’s better than I do.  Give me a call – I’m here to help.