How Hong Kong protests are fueling Toronto Real Estate demands
Vancouver and Toronto real estate markets are seeing an uptick in interest from Hong Kong due to the recent protests against a proposed extradition bill which would allow for case-by-case extraditions to mainland China. I have been dealing with several Hong Kong vacationers this summer who wanted to check out Toronto properties to prepare for their landing in the very near future. There is an estimated 300,000 Canadians living in Hong Kong according to the 2016 Census. Many of whom are former Hong Kong residents who immigrated to Canada before the 1997 handover. The growing pessimism in Hong Kong from the current political climate has sparked a new wave of emigration. Bloomberg stated there is no mass exodus happening, but in the meantime does not prevent the outflow of capital from Hong Kong. Canada remains one of the top countries for immigrants. For newcomers looking to move to Canada, you may find my blog "Moving to Canada" contains some helpful information as a starting point.
In Toronto, we are seeing Toronto condo prices setting new highs. Here is a quick look at the latest August real estate stats in the 416 core and 905 zones.
Central Toronto Core (416 TREB zones)
The number of sales in the Central Toronto Core (416 TREB zones) were up +20% year over year in July, and up 7.5% compared to an average July over the past 10years. This is mainly driven by semi-detached, townhomes and condo segments which also had healthy year-over-year average price increases; +2.3%, +6.5%, +6.1% respectively. The detached segment, however, had a dramatic down turn in July 2019 vs. July 2018 with average prices dropping -9.1% across all 416 territories and dropping -11.8% in the Core 416 territories. While this is a shocking statistic, if you peel back the layers it can be explained. Essentially this was due to substantially more $3M+ homes sold in July 2018 (38 sold) vs. July 2019 (25 sold) which skewed average price. If you remove the "skewing impact" of $3M+ homes from the data, the drop in average price was actually -2.2% across all 416 zones, and -4.6% in the Core 416 TREB zones (instead of average price, you could instead use change in median price and/or the change in HPI Home price index which also shows a more positive picture). The Fall 2019 real estate market is looking to be busy given historically low interest rates, and the closing price gap between high-rise and low-rise detached options.
Other TREB Territories (905 zones) – Halton & Peel continue to post solid numbers across the board with detached year-over-year average price and the number of sales coming in a +4.9% and +20% respectively. The rest of the 905 regions also saw a welcome uptick in average price and sales volume. While detached home prices in these areas still remain well below the peak prices reached in March and April of 2017, and detached active listings still remain around 30% higher than the 10-year average. However, the trends are all pointing in the right direction. These regions appear to be coming out of the bottom of the cycle and we will beign to see price momentum going forward.
August 2019 Mortgage News
Inverted yield curves…Brexit...stock market volatility…US-China trade talks…with all of the uncertainty, the low mortgage rates just got lower. Our in-house mortgage broker just informed us high ratio/CMHC deals) you are now looking at a 5-year fixed rate below 2.5%. (This is lower than variable rate right now!) While 5-year fixed rate is the obvious choice right now, each purchaser should still assess their individual circumstances (flexible or lock in) as the potential penalties of breaking these ultra low mortgages can be huge. Contact our excellent mortgage team from Outline Financial to discuss your borrowing needs.
If you are looking for a condo to rent or buy upon arriving to Toronto, these are the best buy areas at major transit intersections with 98-100% walk score and direct streetcar Financial District:
Yonge and Bloor listing listings link (access to two subway lines)
Yonge and Eglinton listings link (access to subway and light rail transit)
Yonge and St Clair (access to subway and light rail transit)
Yonge and Sheppard listings link (serviced by Yonge-University and Sheppard subway lines)
King St Corridor listings link (504 KING direct streetcar to financial district)
Bay St and University Corridor listings (Direct transit to Financial District and University of Toronto St George Campus)
Church Street Corridor listings (walking distance to Yonge-University subway and Ryerson University)