Toronto home sales see sharp rebound after short slump

TheGlobeAndMail.com
Nov. 2, 2017
Janet McFarland

Home sales climbed 12 per cent in the Toronto area in October over September, marking the biggest month-over-month growth in sales since the city saw its overheated housing market hit a sales peak in March.

The Toronto Real Estate Board said 7,118 homes were sold in the Greater Toronto Area in October, a 12-per-cent increase in sales from September but a decline of 27 per cent compared to record high sales in the same month last year.

"Every year we generally see a jump in sales between September and October," TREB president Tim Syrianos said in a statement.

"However, this year that increase was more pronounced than usual compared to the past 10 years. So while the number of transactions was still down relative to last year's record pace, it certainly does appear that sales momentum is picking up."

TREB said the average GTA home sold for $780,104 in October, up 0.6 per cent from September and 2.3 per cent higher than the same month last year.

Average home sale prices began a modest recovery in September and continued to grow slowly in October, suggesting Toronto has at least halted the sharp downturn in house prices that began in May after the provincial government announced its Fair Housing Plan reforms to cool the overheated housing market, including a new foreign buyer's tax.

Jason Mercer, TREB's director of market analysis, said the Toronto market is continuing to follow the pattern of Vancouver, which saw sales fall after the B.C. government introduced a foreign-buyer's tax in August, 2016, then begin to recover by January this year.

"Similar to the track followed in the Greater Vancouver Area, it appears that the psychological impact of the Fair Housing Plan, including the tax on foreign buyers, is starting to unwind," Mr. Mercer said.

He said TREB will launch consumer polling in November to assess the impact of a recent and proposed government policy changes, including new mortgage stress-testing rules introduced in October by Canada's banking regulator.

There were 14,903 new homes listed for sale in October in the GTA, an 11.8-per-cent increase compared to the same month last year but a decline from 16,469 new listings in September.

The condominium sector remains the strongest segment of the housing market in the GTA, with condos selling for an average of $523,041 in October, up 0.5 per cent over September and 21.8 per cent higher than October last year.

The most-expensive housing category, detached single-family homes, continues to face the greatest impact of the housing downturn as buyers favour more affordable options. The average detached home sold for $1,008,207 in the GTA in October, a drop of 0.7 per cent compared to September and a decline of 2.5 per cent compared to a year ago.

Since the market's peak in April, the price of the average detached home in the GTA has fallen 16 per cent, while average condominium prices are down just 3.4 per cent.

The average detached home in the City of Toronto sold for $1,287,765 in October while detached homes in the 905 region surrounding Toronto sold for an average of $910,488 in October.