With winter now in full force across our city and the start of a new year behind us, those of you thinking about making a move or adding an investment property in 2016 might be wondering: what will be in store for the real estate market in Toronto?

Let’s start with a brief recap of what happened in 2015: sales activity was up a whopping 9.2% over 2014 and for the first time, we surpassed the 100,000 mark. Total sales for the year came in at 101,299. This is a phenomenal amount of activity which blew past the previous record year in 2007, which saw 93,193 sales.

Average sales prices were up almost 10% over 2014’s averages, and today we have an average sales price of $622,217 in the GTA. However, if you are looking to purchase a home in the old city of Toronto boundaries, the average price is $1,039,638 for a detached, $743,738 for a semi-detached, and $400,088 for a condo apartment.

It’s safe to say that Toronto house prices are beyond reach for many, but the demand remains strong for those hoping to live in the 416, and supply of high-quality housing continues to be in short supply. Like many other major cities throughout the world, a good amount of Toronto real estate is being held in the hands of foreigners.

About 5 years ago, I read an article which stated that only 4% of Manhattan real estate was owned by native New Yorker’s. Is Toronto starting to follow that path? Personally, I don’t think so.

In my opinion, what is happening is that consumers are truly buying into living within a reasonable commute of Toronto’s downtown core, and businesses and other amenities are following suit. Lifestyles are improving, and respective of our high real estate prices, people are happy with where they are living. From what I’ve seen so far this year, this won’t change anytime soon.

Just over 10% of all sales last year in the GTA were above $1 million. It is becoming more the norm, rather than the exception, to see million dollar sales in the 416. Currently, one of the most ‘in-demand’ markets are Toronto homes in the $4 million range and up! Buyers have bought into the stability and overall safety of Toronto real estate, and money continues to be invested in housing, which many see as having better long term security than the financial markets.

Last year, semi-detached homes increased in value by 20.8%, followed by 12.7% for townhouses, 11.8% for detached homes, and finally, up by 3.2% in the condo market. Pretty amazing increases in value across all platforms! I truly believe that you should not look at your principal residence as an ‘investment vehicle’ only, as there are many other factors that come into play when measuring the complete value of owning a home. That being said, if you are taking a hit in the financial markets and are financially comfortable, we may want to discuss the wealth building benefits of investment real estate. In my personal experience, this area has been my greatest wealth builder.

Bear in mind that not all real estate is created equally, and the averages noted above are just that – averages. Knowing what to buy, where to buy, and how much to pay, demands serious attention and knowledge of the real estate market. Be careful and don’t over leverage. Be prudent in your purchasing decisions and remember that real estate is always safer when bought with a long term perspective in mind.

If you have any questions or concerns, or would like to discuss your neighbourhood more specifically, contact me and I would be happy to set aside the time to talk about your specific needs.