Toronto home prices rebound sharply after short slump, sales drop

TheGlobeAndMail.com
Oct. 4, 2017
Janet McFarland

Average home prices climbed almost 6 per cent in the Greater Toronto Area in September compared to August, marking the first month-over-month price increase since the region's housing market began a steep sales slide in May.

The Toronto Real Estate Board said the average GTA home sold for $775,546 in September, up 5.9 per cent from August's average of $732,292.

Prices were up 2.6-per-cent compared to September last year, but remain 15.8 per cent lower than they were at the market's peak in April before the downturn began.

The market recovery last month was driven primarily by buoyant sales of detached homes in the City of Toronto, where prices climbed 13.8 per cent in September compared to August. The average detached house sold for $1,355,234 in the City of Toronto in September, still well below the peak price of $1,578,542 recorded in April.

In the 905 region surrounding Toronto, however, average detached home prices were virtually unchanged, climbing less than 1 per cent in September to an average of $912,921 as the GTA experiences an uneven upturn in activity.

TREB president Tim Syrianos said a 9.4-per-cent increase in new home listings in the GTA in September compared to a year ago suggests owners are optimistic about an uptick in market activity through the remainder of the fall.

"As we move through the fourth quarter we could see some buyers moving off the sidelines, taking advantage of a better-supplied marketplace," Mr. Syrianos said in a statement.

Although buyers pushed prices higher, they concluded fewer deals in September. TREB said 6,379 homes were sold in September, down 35 per cent over the same month last year. The decline is in line with similar drops in monthly sales volumes seen since June.

Condominiums remained resilient, with prices climbing 2.5 per cent in September compared to August and 23 per cent over September, 2016. The condo market has faced far less impact in the recent housing downturn as buyers continue to favour the least-expensive housing category, especially first-time purchasers who do not have to list another house for sale in weak market conditions.

Jason Mercer, TREB's director of market analysis, said the GTA market had "more balanced" conditions in September, but the condo segment remains the exception where both average and benchmark sales prices are up by more than 20 per cent compared to last year.

He said consumer polling in the spring signaled buyers were shifting their buying intentions toward the condo market.

In addition to tracking average sales prices, TREB also reports a monthly benchmark sales price, which adjusts for shifts in the types of housing sold during the month. The MLS Home Price Index composite benchmark price was up 12.2 per cent in September compared to a year ago, which is significantly stronger than the 2.6-per-cent average price increase for the month. TREB said the difference was due to detached homes accounting for a smaller share of overall transactions this year compared to 2016.