Toronto real estate frenzy cools

Friday, July 7th, 2017

Sales dip 37% from a year earlier despite rise in new listings, real estate board says

Garry Marr
The Vancouver Sun

The average price of a home sold in the Greater Toronto Area was $793,915 in June, an eight-percent decline from a month earlier, according to data released Thursday by the Toronto Real Estate Board.

Year over year, June average prices were still up 6.3 per cent from a year ago.

“There’s no doubt the market has changed,” said Christopher Alexander, regional director at Re/Max Ontario-Atlantic Canada.

“We are in a period of flux that often follows major government policy announcements pointed at the housing market,” said Tim Syrianos, president of the board, in a statement, referencing the province’s 16-point housing plan to cool the market in the Greater Golden Horseshoe (GGH).

Among key measures were a 15-per-cent non-resident speculation tax for the GGH and rent controls for the entire province.

TREB said there were 7,974 sales through the Multiple Listing Service in June, down 37.3 per cent from a year ago. New listings rose to 19,614, up 15.9 per cent.

“Any time the government intervenes drastically, you see consumers just kind of wait it out and see how it’s going to take effect,” Alexander said.

“But the market fundamentals in Toronto are still really strong. Lot of demand, lot of immigration, low interest rates. It’s a great city to live in. All those things will start to take hold again, probably in midAugust,” he said.

“While this annual rate of growth was sizable, it represented a more moderate annual rate of growth compared to May 2017, when new listings were up by 48.9 per cent year-over-year,” TREB said it its release.

Syrianos said survey results commissioned by the board show many households are very interested in purchasing a home in the near future but some are sitting on the sidelines waiting to see the real impact of the Ontario Fair Housing Plan.

“We have existing homeowners who are listing their home because they feel price growth may have peaked. The end result has been a better supplied market and a moderating annual pace of price growth,” he said.

“While we are seeing a substantial dip in sales over the last couple of months, it doesn’t look as if foreign buying activity or a pullback in foreign buying activity was at the root of this,” said Jason Mercer, the director of market analysis for the board.

“I’d argue it’s more on the psychological side of things, whereby people see a new major policy pointed at the housing market and take a bit of a step back, temporarily reassess where they are in the marketplace before perhaps moving back into the market.”

“Recent Ipsos survey results suggest that home buying activity in the GTA will remain strong moving forward.

“The year-over-year dip in home sales we have experienced over the last two months seem to be the result of would-be buyers putting (off) their decision to purchase temporarily,” said Mercer.

“It certainly looks as though buyers will benefit from more choice in the second half of 2017 compared to the same period in 2016.”

The real estate board revised its outlook for the year downward to between 89,000 and 100,000 transactions and is expecting that the average selling price in 2017 will be up by 13 to 18 per cent.

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