Resale Home Activity Continues At A Solid Pace
Ann Hannah, Toronto Real Estate Board President – Toronto Sun
Resale housing activity in the Greater Toronto Area continued at a moderate pace in July, with 7,570 homes changing hands. This represents a 1.5% decrease from the 7,683 sales that took place in July 2011.
In Toronto 2,721 transactions took place last month compared to 2,995 sales a year ago, a drop of 9%, which research suggests can be attributed to the cost of the City of Toronto’s land transfer tax.
Comment: Or, the chaos of the past few years is subsiding. Summer used to be a slower time of the year, but then things went crazy. It may not be the LTT but just a return to normal trends.
Meanwhile sales in the 905 Region improved compared to a year ago. Last month 4,849 homes changed hands in the 905 Region, a 3% climb from the 4,688 sales that took place in that area in July 2011.
Comment: Which might not be because of the LTT so much as a reaction to the VERY high prices we are seeing in the 416 these days.
Despite more moderate sales in the City of Toronto, the pace of activity remained on track throughout the GTA as compared to a year ago, which was reflected in the amount of time homes were available for sale. The average number of days on market was 26 last month, consistent with last July.
Prices showed continued strength last month, with the average cost of a GTA home increasing 4% compared to a year ago, to $476,947. The City of Toronto, with an average price of $500,934 showed a slightly stronger year-over-year increase of 5% compared to 3.5% in the 905 Region, where the average price was $463,488.
Comment: It is the pressure on homes close to the core still pushing upwards on prices.
Price gains were strongest for detached homes in the City of Toronto in July, at 8%. Semi-detached and town homes in Toronto followed with gains of 5% and 3% respectively. In the 905 Region appreciation by housing type was more balanced with detached, semi-detached and town homes all showing 5% price increases. Throughout the GTA condo prices stayed the course compared to a year ago, declining 1% in Toronto and increasing by 1% in the 905 Region.
Comment: Before anyone starts declaring the start of a new trend, 1% is almost meaningless. And, we need a few months of data before we say anything. To be honest, though, I think condo prices are moderating and will flatten over the long term. We are getting to saturation where we have enough supply for the demand. With some projects not launching in this new era, we may see a return to a mild annual increase.
At 13,888 the number of new listings was nearly 12% greater than July 2011. The improved supply of available homes in recent months has eased upward pressure on prices as anticipated.
Comment: This is what I said we needed to moderate the market. We now have a number of months (don’t remember, might be 4-6 months now) of increasing listings. Couple that with slowing sales and we have some braking pressure on the market. This is how things come to a gentle landing.
News on the employment front was neutral in July, as the Toronto unemployment rate remained largely unchanged from the previous month, improving 0.1 of a percentage point to 8.5%.
Comment: Hey, a drop of 0.1% is a big deal! If it had gone up 0.1% there sure would have been 87 articles in the paper about how dire the economy is.
While interest rates have also remained stable, with five year fixed mortgage rates of approximately 3%, we may see an interest rate hike within the next year.
Comment: Stable? They actually dropped to 2.94% – the lowest rate ever. We might see a hike, but we have also seen a few recently. We did go from up to 3.29% or so, but now down again. With so much mortgage activity, no bank wants to be the first to raise rates. They are locked in a war to death, trying to get as many mortgage customers as they can.
Bank of Canada Governor Mark Carney commented recently that since Canada’s economy has almost returned to full capacity, it may soon be time to withdraw some monetary policy stimulus.
Comment: But that means very little. The overnight rate is going to stay put until Europe gets its financial house in order, which could be 2013 or even 2014. A little 0.25% bump will be the first thing, too small to mean much. National unemployment is still slowly dropping, so that is a good sign. Carney is worried about consumer debt, but he cannot raise rates yet because of overall world economic worry. But, debt ratios are dropping, if ever so slowly. Mortgage changes have been made, which may or may not do anything – or they may be a factor in the slowing market. And the real estate market is slowing from its fiery heights. All good news.
Since a number of variables such as these should factor into the timing of your next move, it’s wise to get informed, objective from advice from a Greater Toronto Realtor when weighing your options.
Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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