Home prices continued to fall across the Toronto region in July, 2017 as purchasers stayed on the sidelines, but the tempo of growth of new listings also continued to slow as more sellers decided to wait for a better time to sell.
The Toronto Real Estate Board reported the average sale price of all manner of properties sold in the Greater Toronto Area reached $746,218 in July, 2017, down 19 per cent from the market’s top in April, 2017 when house sales averaged $920,791, and down 6 per cent from June’s median selling price of $793,915.
The average July, 2017 sales price was still up 5 per cent compared to July, 2016, which means the market has still not erased the full amount of price gains recorded in late 2016 and early 2017.
The recent price decline came as the number of homes sold fell 40.4 per cent in July, 2017 compared to the same month last year, TREB said. The number of detached houses sales fell 47.4 per cent during the month, while sale of semi-detached homes fell 38.6 per cent, townhouse sales dropped 36.5 per cent and condo sales slipped 30.7 per cent.
Amid the steep decline in sales, the only modest sign of market improvement came from the slackening tempo of growth in the number of new houses listed for sale, which rose 5.1 per cent in July compared to last-place July. New listings surged by 49 per cent in May and 16 per cent in June compared to the same months last year as many home owners rushed into the market to try to sell at the peak, leading to a glut of inventory and falling prices.
Jason Mercer, TREB director of market analysis, told house buyers still had more options to choose from in July, 2017 than a year ago, and the result to be included in falling prices. But things might change in this autumn if more buyers return and new listings stop growing.
Mr. Zigelstein, realtor in Richmond Hill, believes August will remain quiet but there will be a significant increase in new listings in September. He predicts vendors is even more “serious” about completing a deal in the autumn, while people who are toying with the idea of selling and holding out for prices above current market levels will leave the market.
“Anybody who’s really kicking tires in the market will come off the market some time in August, and then in September we’ll start to see those serious sellers come back on,” Mr. Zigelstein said. “I think it will be substantially more than what we’re going to see in August.”
TREB said detached houses have led the region’s housing downturn, especially in the suburban 905 region surrounding the City of Toronto.
Detached house prices were up merely 2.4 per cent in the 905 region in July compared to a year ago, but are still up 8.5 per cent of the members in the City of Toronto, TREB said. The number of detached homes sold in July dropped 49 per cent in the 905 part and 41.7 per cent in the City of Toronto in July, 2017.
Condo prices have held up the most since markets began its downturn in April, 2017 due to their relatively better affordability for first-time condo customers. TREB said the average condo sale price in the GTA was still up 23 per cent in July, 2017 compared to a year earlier, while detached and semi-detached home prices were both up about 5 per cent compared to July, 2016.
Mr. Pasalis, broker, nonetheless, said he believes condo prices will also begin to slide lower given the 30.7 per cent drop in the number of condos sold in July, 2017 compared to July, 2016.
“Condo prices is simply running so high while freehold (home) prices are waning. It doesn’t make sense — cost appreciation will level off,” he said.
The Toronto market has recognized house sales decline since the Ontario government announced a package of reforms on April 20, 2017 aimed at cooling rapid growth in home prices in the Toronto GTA region. The centerpiece of the program was a new 15 -per-cent tax on foreigners buying properties in the Toronto GTA area.
“Clearly the year-over-year decline we experienced in July, 2017 had more to do with psychology, with would-be home purchasers on the sidelines waiting to see how market conditions evolve,” Mr. Syrianos, TREB president, said.
TREB mentioned summer statistics are not the best indicator of market conditions because sales typically slow significantly in July and August, and activity usually picks up in September as sellers and buyers become more active.
The potential impacts of the Ontario government reforms and rising interest rates should become clearer in the autumn, TREB said.
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Source: Globe And Mail
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