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Supply and demand not the only factors driving up detached house prices in 2005, says RE/MAX

Infill, renovation, and new housing provided a substantial boost to the average price of a single-detached home in Toronto and outlying areas in 2005, according to a report released today by RE/MAX Ontario-Atlantic Canada.

Of the 63 Toronto Real Estate Board districts examined by RE/MAX, 19 per cent (12) reported double-digit increases in the single-detached home category in 2005. The top five neighbourhoods, in terms of price appreciation, were as follows: Ledbury, John Wanless, Lytton Park (C04) at 16.3 per cent; Lansing, Willowdale (C07) at 15.1 per cent; Lawrence Park (C10) at 13.4 per cent; Leaside (C11) at 13.4 per cent; and Mississauga's Lorne Park, Clarkson, Sheridan (W13) at 13.2 per cent.

"There's no doubt that real estate continued to defy the traditional cycle once again in 2005," says Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic Canada. "A solid economic performance locally spurred strong consumer confidence levels throughout much of the year, translating into increased buying activity in Toronto. Despite the better-than-expected demand that surprised many analysts, the price moderation we predicted for 2005 did, in fact, become evident. As more areas realized gains closer to the overall average, appreciation across the board remained palatable for most purchasers, making real estate an attractive investment for homebuyers for yet another consecutive year."

Although many areas have experienced a significant increase in average price year over year, supply and demand were not the only factors at play in 2005. Teardown activity combined with the renovation boom and the rising cost of new home construction contributed to the upward trending in housing values as well, explains Polzler.

"The infill phenomenon is occurring across the Greater Toronto Area," says Polzler. "In neighbourhoods such as C04 - Ledbury, Lytton Park, Allenby - and C07 - Lansing, Willowdale - it is changing the price point as well as the landscape. Add that to the fact that sales over $1 million dollars climbed approximately 30 per cent in the GTA last year, and there's no doubt that there is unusually strong upward pressure on average prices." Improvements from renovation activity are also contributing to today's higher housing prices. According to Statistics Canada, spending on renovation projects is expected to reach a record $40 billion in 2006, up from $38 billion in 2005.

Supply and demand continued to be a major factor driving up prices in hot pocket areas, particularly in the central core of the city, despite the emergence of more balanced market conditions overall. Not surprisingly, the vast majority of the most substantial gains were experienced in the Central District, where nine of the 14 markets appreciated 10 per cent or more.

Condominium apartments and town homes were also ranked by price appreciation in the Greater Toronto Area. Mississauga emerged the clear leader in condominium price appreciation in 2005, outpacing all other areas. The top performing community in 2005 was Port Credit, Mineola, Cooksville (W12), which experienced a 14.7 per cent increase in average price. Lorne Park, Clarkson, Sheridan Park, Southdown (W13) ranked second with a 14.2 per cent rise in condominium values. Third place went to Leaside, Thorncliffe Park, Flemingdon (C11) at 10.3 per cent. Rounding out the top five were Harbourfront (C01) and Newmarket (N07), with average price increases of 8.9 and 8.5 per cent respectively.

"Affordability continues to draw more and more purchasers to the condominium and town home market," says Polzler. "In 2005, the lion's share of top performing neighbourhoods offered units priced between $200,000 and $300,000. The west and central district remain perennial favourites, but areas of the north are gaining strong momentum. Newmarket, Markham and Aurora all experienced solid price escalation last year."

Of the 63 TREB districts reporting condominium apartment and town home sales, most experienced moderate price gains. Only three areas posted increases in excess of 10 per cent. Condominium sales fell across the board in 2005, with the exception of Central Toronto, where sales climbed nearly six per cent.

RE/MAX is Canada's leading real estate organization with over 15,500 sales associates situated throughout its more than 605 independently owned and operated offices across the country. The RE/MAX franchise network, now in its 32nd year of consecutive growth, is a global real estate system operating in over 61 countries. More than 6,000 independently owned offices engage 114,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, relocation and asset management. For more information visit: www.remax.ca.

RE/MAX ONTARIO-ATLANTIC CANADA

RE/MAX is Canada's lead ing real estate organization with over 14,700 sales associates in close to 600 independently-owned offices. The RE/MAX franchise network, now in its 31st year of consecutive growth, is a global real estate system operating in 54 countries. More than 5,400 independently-owned offices engage over 102,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, relocation and asset management. For more information, visit: www.remax.ca.

So, if you are thinking of selling and buying a homes this year, should you buy or sell first?  I've had many clients purchase before they sell.  I just want you to have all the information so you can make the best decision for yourself and your family.  You may read more about buying or selling first here

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