July 15, 2010
On a sunny weekend, David Ferrari will take a knapsack with some food and a book and bike to the beach in Mississauga’s Lorne Park neighbourhood.
“It really feels great to just sit by the water in this special place,” says Ferrari, a real estate broker. In the 10 years since he set up a popular brokerage in the area, Ferrari has seen Lorne Park become what some people have dubbed the new Oakville.
Bungalows, typically on large lots of at least 70 feet wide, are being torn down for monster homes as buyers discover the tree-lined neighbourhood on Lake Ontario.
Move-up buyers dominated the Greater Toronto Area housing market in the first half of the year, with the suburbs experiencing the greatest price appreciation, according to a study by ReMax Ontario Atlantic Canada released Wednesday.
Lorne Park led in terms of percentage increase for average prices with a 30.2 per cent gain in the first half of this year compared with 2009, according to ReMax. The average price of a detached home in the upscale west-end area is now $880,373 verses $676,289 in 2009.
But the area also has many ultra-high-end homes. One of the most expensive is on the market for $8.9 million. The 10,000-square-foot contemporary home was used as a rental by the Rolling Stones when they were in town for a concert.
“This is one of the nicest areas in the GTA,” says Michael Polzler, executive vice-president of ReMax. “It’s a very desirable neighbourhood of gracious homes that is relatively close to the downtown core.”
Polzler said the “near suburbs” have been the winners over the past six months because buyers want homes within a half-hour drive of downtown. “Toronto is one of the cities with the longest commuting times, so there is a real concern about transportation,” said Polzler.
Last year — during the depths of the financial crisis — was a rare window of opportunity for buyers. In 2008, the average price of a home in Lorne Park was $830,041, before falling 18 per cent in 2009.
Last year, 80 per cent of the districts surveyed by ReMax reported declines in value, which made the returns look especially good during this year’s upswing. “The bounce back, fuelled by unprecedented market conditions including a severe shortage of listing inventory, simply returned average prices to their normal course,” said Polzler.
In second place was the northern suburb of Markham, with a 27.7 per cent jump to $779,168 compared with $610,322 in 2009, followed by the neighbourhoods of Armour Heights and Bathurst Manor, with a 27.5 per cent hike to $561,973.
Mississauga’s Creditview, Erindale areas were in fourth place at $561,973, up 26.5 per cent. Rounding out the top five were Hogg’s Hollow and the Bridle Path, with a 26.2 per cent increase to $1,868,591 compared with $1,480,296.
While prices experienced a major run-up in the first half of the year, most analysts expect the second half to be more tempered.
Last week the Toronto Real Estate board reported a second consecutive monthly drop in sales for the year, with 8,442 homes sold in June, a 23 per cent decrease over 2009.
The average price for June sales in the entire Toronto area was $435,034, up 8 per cent from June of 2009. However, that is below the double-digit increases that had been recorded earlier this year.
Active listings were also up by 28 per cent in June, suggesting there is much more product on the market.
The Toronto condominium market did not experience the same extreme gains, says ReMax. While 85 per cent of detached homes had double-digit price gains, only 61 per cent of condos had similar gains.