The Toronto Real Estate Board has tried to put lipstick on a pig:
TORONTO, ONTARIO, August 3, 2017 – Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 5,921 residential transactions through TREB’s MLS® System in July 2017. This result was down by 40.4 per cent on a year-over-year basis, led by the detached market segment – both in the City of Toronto and surrounding regions.While sales were down, the number of new listings reported were only
slightly (+5.1 per cent) above last year’s level.
“A recent release from the Ontario government confirmed TREB’s own research which found that foreign buyers represented a small proportion of overall home buying activity in the GTA. Clearly, the year-over-year decline we experienced in July had more to do with psychology, with would-be home buyers on the sidelines waiting to see how market conditions evolve,” said Mr. Syrianos.
“Summer market statistics are often not the best indicators of housing market conditions. We generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home. As we move through the fall, we should start to get a better sense of the impacts of the Fair Housing Plan and higher borrowing costs,” said TREB CEO John DiMichele.
The MLS® Home Price Index (HPI) Composite Benchmark price was up by 18 per cent on a year-over-year basis. However, the Composite Benchmark was down by 4.6 per cent relative to June. Monthly MLS® HPI declines were driven more so by single-family home types. The average selling price for all home types combined was up by five per cent year-over-year to $746,218.
“Home buyers benefitted from more choice in the market this July compared to the same time last year. This was reflected in home prices and home price growth. Looking forward, if we do see some would-be home buyers move off the sidelines and back into the market without a similar increase in new listings, we could see some of this newfound choice erode. The recent changes in the sales and price trends have masked the fact that housing supply remains an issue in the GTA,” said Jason Mercer, TREB’s Director of Market Analysis.
According to The Globe & Mail, average home prices in Toronto fell a further 6% in July and have fallen 19% since the market’s peak in April:
“There’s nothing positive – there are no really great signs out there,” said realtor John Pasalis, president of Realosophy Realty Inc. in Toronto.
Mr. Pasalis said some of areas where average prices are now lower than they were a year ago – including Richmond Hill and Whitchurch-Stouffville north of Toronto – are also regions that appeared to have the highest number of speculators and foreign buyers prior to the downturn. Their withdrawal from the market has had a greater impact on prices than in more central neighbourhoods in the City of Toronto.
Meanwhile, the composite benchmark index, which tracks a typical home over time, fell by 4.6% in July according to Bloomberg:
Representing the biggest monthly decline in at least 17 years:
The slump in prices and activity follows broad rental regulations implemented in April, which included capping rent increases and introducing a foreign investor tax. It also follows the federal government in October placing restrictions on insured mortgages, and Canada’s financial regulator also proposing to restrict uninsured home loans this year.