The Soaring Toronto Housing Market has Lost its Sizzle in May
The soaring Toronto Housing market has lost some of its sizzle, according to recent report by the Toronto Real Estate Board (TREB). A recent publication by TREB, has announced that the GTA sales in May 2017 has dropped down by 20.3 per cent compared to same time last year. (TREB Report May 2017). The report show a marked slowdown in terms of prices and sales volumes. Compared to this time last year, home prices in the GTA remain high — the average home was at $752,100 in May 2016; a year later, it’s at $863,910. If you want to live in Toronto itself, you’re looking at paying $899,728. (Pete Evans, CBC News)
The report also states that detached homes were down by 26.3 per cent and sales of condominium apartments were down by 6.4 per cent. The supply of listings was up strongly over the same period. Active listings – the number of properties available for sale – at the end of May were up by 42.9 per cent compared to the record low a year earlier. The number increased considerably for low-rise home types including detached and semi-detached houses and townhouses. Active listings for condominium apartments were down compared to May 2016. (TREB Report May 2017).
The total average sales drop was –20.3 per cent, year over year, TREB says.
In Toronto, the declines were:
- Detached: –26.1 per cent.
- Semi-detached: –14.1 per cent.
- Townhouse: –24.3 per cent.
- Condo: –4.3 per cent.
For the GTA, the drops were:
- Detached: –26.3 per cent.
- Semi-detached: –22.7 per cent.
- Townhouse: –18.1 per cent.
- Condo: –6.4 per cent.
Prices down from April 2017 to May 2017
Comparing home prices from the last two months, however, tells a slightly different story: the average price of homes in the GTA dropped by more than $55,000 — from $919,614 to $863,910 — in May compared to the previous month.
In late April, the Ontario government introduced measures to stablize home prices, including a 15 per cent foreign buyers tax expansion of rent control; and legislation that would allow Toronto and other municipalities to tax vacant properties. Monday’s report was the first released by TREB since the Ontario Fair Housing Plan rolled out. (Pete Evans, CBC News)
May is often regarded as a strong month for real estate as it marks the end of the early spring sales surge, which, in the Toronto area, saw major price jumps. Interestingly, though, the average price growth rate for each type of home has dropped off from the early spring peak. (Pete Evans, CBC News)
Prices are still higher than they were a year ago thanks to outsized gains earlier this year, but a closer look at the numbers reveals a clear trend: “The market has changed.” The catalyst seems to have been the provincial government’s move in late April to bring in 16 rule changes aimed at cooling the market, chief among them a 15 per cent tax on foreign buyers. Home buyers definitely benefitted from a well supplied market in May in comparison to the same time last year. However, even with the drastic increase in supply of homes, inventory levels overall remain pretty low. The market say less inventory by the end of May, which is why we saw very strong price growth of real estate. (Pete Evans, CBC News)
“The actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen. In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out. On the listings front, the increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we’ve experienced over the past year by listing their home for sale to take advantage of these equity gains,” said Jason Mercer, TREB’s Director of Market Analysis. (TREB Report May 2017).
|TREB MLS® Active Residential Listings at Month-End|
|Month/Year||Active Listings at Month-End|
|Summary of TorontoMLS Sales and Average Price May 1 – 31, 2017|
|Sales||Average Price||New Listings||Sales||Average Price||New Listings|
|City of Toronto (“416”)||3,926||899,728||8,451||4,612||782,551||6,745|
|Rest of GTA (“905”)||6,270||841,483||17,386||8,178||734,927||10,611|
TorontoMLS Sales & Average Price By Home Type May 1 – 31, 2017
|Yr./Yr. % Change||-26.1%||-26.4%||-26.3%||16.6%||15.0%||15.6%|
|Yr./Yr. % Change||-14.1%||-27.1%||-22.7%||27.2%||16.1%||22.9%|
|Yr./Yr. % Change||-24.3%||-15.9%||-18.1%||18.0%||19.2%||18.4%|
|Yr./Yr. % Change||-4.3%||-11.1%||-6.4%||27.7%||29.0%||28.4%|
May 2017 Year-Over-Year Per Cent Change in the MLS® HPI
|Composite (All Types)||Single-Family Detached||Single-Family Attached||Townhouse||Apartment|
|City of Toronto||26.10%||24.82%||22.10%||27.05%||31.03%|
|South Simcoe County1||36.73%||36.85%||33.28%||–||–|
|1South Simcoe includes Adjala-Tosorontio, Bradford West Gwillimbury, Essa, Innisfil & New Tecumseth|