Detached houses in the GTA are finally showing signs of recovery after a sluggish market in 2017 and 2018.
The action is particularly pronounced in the city of Toronto, where three neighbourhoods experienced double-digit price growth in the first six months of the year as detached sales climbed 17 per cent across the region between January and June, according to a report from Re/Max Integra on Tuesday.
“Over 50 per cent of the GTA has seen double-digit increase in sales year over year. The market for that segment is really starting to come back,” said Christopher Alexander, Re/Max executive vice-president and regional director.
But performance depends on neighbourhood.
“There’s still 49 per cent of the GTA that’s been flat, that hasn’t appreciated at all. Half the city is doing really well and the other half is affordable for a lot of people,” he said, adding that gives buyers options.
“If you can’t afford one area, you can probably afford what you want in another,” Alexander said.
Detached homes accounted for about 46 per cent of all sales in the Toronto area — up from about 43 per cent last year — suggesting that the segment, which has been lagging condo sales, “is back on track,” he said.
Despite a regionwide average sale price of about $1 million, the most expensive home category is looking affordable to some buyers now that some prices have cooled and interest rates are expected to remain low.
The neighbourhood that includes Riverdale, Blake-Jones and Greenwood-Coxwell — the area called E01 on the real estate industry’s Multiple Listings Service (MLS) map — saw a 15.2 per cent increase in detached home prices in the first six months of this year, compared to the same period last year. The average selling price rose about $200,000 to $1.4 million from $1.2 million in that time frame.
Prized downtown pockets such as Trinity-Bellwoods, Little Italy, Little Portugal, Dufferin-Grove, Kensington, Chinatown and Niagara St. (C01 on the MLS map) showed a 12.8 per cent price gain with detached homes selling for about $2 million on average. Leaside and Thorncliffe Park detached prices rose 11.2 per cent year over year to about $2.1 million in the first six months of 2019.
Alexander acknowledged that this year’s positive performance is being compared to a tough 2018 and detached home prices regionwide still remain below the 2017 market peak, he said.
In the 905 communities surrounding the city, 57 per cent showed a decline in prices. The area known as Adjala-Tosorontio, north of Vaughan and Brampton, and west of Barrie, saw the largest drop of 11.5 per cent year over year in the first six months of 2019. In Durham Region, Brock prices fell 11.1 per cent, and detached house prices were down 10.5 per cent in the King City area of York Region.
Those places tend to be smaller with fewer sales that can skew the overall average, said York Region real estate specialist Cam Forbes of Re/Max Realtron. He says the mix of homes that is selling is also having an impact. Generally, 905-area prices are still about 10 to 15 per cent below the early 2017 peak and down about 2 per cent year over year.
The strongest sales performance tends to be in the less expensive homes and that manifests in places like King City too.
“In the mix you’re getting semi-detached sales or townhouse sales that are just taking a greater percentage of the sales that are up to that $1 million point,” he said.
“Where the real strength is reaffirming itself in the detached sales in the 905 is that $700,000 to that $1.2 million, $1.3 million. That’s where we’re seeing prices now going up,” Forbes said.
Areas such as Scarborough’s L’Amoreaux, Tam O’Shanter-Sullivan and Steeles neighbourhood with detached homes priced under $1 million saw the biggest increase in the number of detached home sales.
Some of the sluggish 905-areas were the most heated during the real estate bubble of 2016 and 2017, Alexander said.
“They went up so much in the latter half of 2016 and 2017. They had the biggest appreciation and the sharpest decline as a result of that. It will be a while until they catch up just because they had such a big run up,” he said.
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Tess Kalinowski is a Toronto-based reporter covering real estate. Follow her on Twitter: @tesskalinowski