First, while it might sound like we’re repeating ourselves, residential real estate prices and sales in Markham, Toronto and York Region once again set a new record in April, 2016.
For the record, here are some of the numbers for April:
- 12,085 – the number of existing (not newly built) homes of all types sold in Toronto and the GTA, including Markham. That’s an all-time record for the month of April, and an increase of 7.4% over April, 2015.
- 16.2% – the increase in the average price of existing homes of all types in Toronto and the GTA.
- 19.9% – the increase in the average price of homes of all types in Markham. That’s an almost 23% higher increase than in the rest of the GTA. Markham real estate continues to outperform other communities in the GTA.
The good news keeps coming for homeowners in our area! However, when you look at the numbers for individual types of homes such as detached, semi-detached and townhomes, the increases aren’t always the same as they are for the “average” numbers that are generally reported in the media.
Condominium Apartment Sales Taking Off
In their April 2016 Market Watch report, the Toronto Real Estate Board points out that, while a new record was set for the number of existing homes sold, in the City of Toronto, sales were down for detached houses, semi-detached houses and townhouses. That said, sales of condominium units were up over 17%.
The increase in prices for condominiums isn’t quite as impressive, increasing only about 7% since last April, but condos have traditionally somewhat under-performed larger housing types when it comes to price.
The Globe and Mail reports an increase in bidding wars for condo units, citing the example of one Trinity-Bellwoods condo that sold for 17% over its asking price of $499,000. In Markham, while numbers of condo units sold were up only marginally, the city again out-paced Toronto on price increases, posting a 10.3% increase versus last April.
What’s Behind the Popularity of Condominiums?
As with everything to do with real estate, there is no single reason why condos are enjoying increased popularity in housing markets. Some speculate that a spike in foreign ownership is behind the robust numbers. However, a closer look shows that the boom in condo sales may be just another symptom of the sizzling real estate market. Here are just a few reasons why condos are enjoying healthy sales numbers:
1. Cost of Other Types of Homes
With average detached home prices well over a million dollars in Markham and Toronto, many homebuyers (especially first-timers) are finding it difficult to afford larger housing, particularly if they want to live in their preferred neighbourhoods.
2. Lack of Supply of Detached, Semi-Detached and Town Homes
Despite the record prices, many homeowners who might otherwise sell are staying on the sidelines because they don’t want to get into the overheated buying market. That creates a “chicken and egg” scenario. Lack of supply creates the bidding wars that buyers fear, and keeping homes off the market compounds the lack of supply.
3. Avoiding the New Mortgage Rules
The Canadian Mortgage & Housing Corporation initiated new rules earlier this year that increased the requirement to 10% for a down payment on the portion of a home’s price between $500,000 and $1,000,000. That means with an average price of $393,041 in Markham, the majority of condo units are not affected by the new rules.
It all adds up to confirm, regardless of what type of home you have, Markham is a great place to have it!