The hous­ing mar­ket in 2012 was hot, then cold

In the first half of 2012, Toronto home­buy­ers faced rapidly esca­lat­ing prices, bid­ding wars and “phan­tom bids.” In the sec­ond half of the year, the mar­ket cooled, in part due to the stricter mort­gage rules that Finance Min­is­ter Jim Fla­herty imposed in June. What did 2012 as a whole mean for cur­rent and aspir­ing home­own­ers? Below, we look at the end of year resale stats from the Toronto Real Estate Board, and break down the impor­tant numbers.

Com­ment: No one ever proved there were phan­tom bids. They were a con­struct of the imag­i­na­tion of the peo­ple who lost bid­ding wars. Not, it was not their fault for not going high enough, it was because every­one else was cheat­ing and was out to get them with fake bids. But at least one media out­let admitted

• More Toron­to­ni­ans stayed put: The total num­ber of sales in 2012 was 85,731, which, although rea­son­ably high from a his­toric per­spec­tive, was still 3.8% less than 2011’s 89,096 trans­ac­tions. The first half of 2012 was much more active than the year before, but couldn’t make up for the sig­nif­i­cant slow­ing in the sec­ond half of the year.

Com­ment: Fright­en­ing in a way… even with the new mort­gage rules in the mid­dle of the year and sales vol­ume falling 12–21% in the months fol­low­ing, we still fell only 3.8% shy of 2011′s sales total.

• Prices were still up: The aver­age sell­ing price for 2012 was $497,298, almost 7% higher than in 2011. That said, aver­age prices can be mis­lead­ing since they can be skewed by one seg­ment of the mar­ket, such as when there’s a decline in the vol­ume of sales for lower-priced homes.

Com­ment: And yet sales of $1 mil­lion houses fell after the new mort­gage rules, which should have skewed the aver­age price down. But it didn’t, prices still rose. Nice try to spin the data, though, to make it look like it was a worse result than it was.

• Low-rise homes con­tin­ued to dom­i­nate: The prices of low-rise homes – a cat­e­gory that includes semis, town­houses and, of course, highly-coveted detached homes – saw the strongest growth.

Com­ment: Which is what fueled most of the price growth.

• The condo mar­ket is get­ting dicier: As for the condo mar­ket, the slow-down that started ear­lier in the year got worse in Decem­ber, with a sales vol­ume drop of almost 27%. The aver­age price of a condo in Toronto proper fell 1.8%.

Com­ment: The huge drop in sales was for the month of Decem­ber only. Look­ing at con­dos year-over year, 2012 dropped to 19,676 sales from 22,302 in 2011 – 13.3% to be sure, but not the dras­tic 27% the media would have you believe. Prices rose from $331,345 in 2011 to $336,522 in 2012 – only 1.6%, but a rise nonetheless.

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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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blog com­ment­ing on con­dos for sale

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