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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
May 2003 21,747
May 2004 22,484
May 2005 24,875
May 2006 26,220
May 2007 23,739
May 2008 27,267
May 2009 21,524
May 2010 25,414
May 2011 18,481
May 2012 20,462
May 2013 22,677
May 2014 20,679
May 2015 18,585
May 2016 12,931
May 2017 18,477

 

Summary of TorontoMLS Sales and Average Price May 1 – 31, 2017
2017 2016
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
GTA 10,196 863,910 25,837 12,790 752,100 17,356
 

TorontoMLS Sales & Average Price  By Home Type May 1 – 31, 2017

Sales Average Price
416 905 Total 416 905 Total
Detached 1,146 3,611 4,757 1,503,868 1,025,893 1,141,041
Yr./Yr. % Change -26.1% -26.4% -26.3% 16.6% 15.0% 15.6%
Semi-Detached 348 582 930 1,062,318 682,565 824,667
Yr./Yr. % Change -14.1% -27.1% -22.7% 27.2% 16.1% 22.9%
Townhouse 367 1,146 1,513 741,211 629,229 656,392
Yr./Yr. % Change -24.3% -15.9% -18.1% 18.0% 19.2% 18.4%
Condo Apartment 2,038 816 2,854 564,808 448,867 531,659
Yr./Yr. % Change -4.3% -11.1% -6.4% 27.7% 29.0% 28.4%
                                                                                                                                                                            Continued…

May 2017 Year-Over-Year Per Cent Change in the MLS® HPI

Composite (All Types) Single-Family Detached Single-Family Attached Townhouse Apartment
TREB Total 28.98% 28.76% 26.23% 30.25% 31.85%
Halton Region 28.39% 28.10% 28.07% 30.01%
Peel Region 29.88% 28.85% 28.39% 32.49% 33.27%
City of Toronto 26.10% 24.82% 22.10% 27.05% 31.03%
York Region 29.19% 30.17% 26.37% 18.87% 33.97%
Durham Region 33.33% 32.75% 30.82% 39.21% 43.42%
Orangeville 34.91% 34.56% 36.05%
South Simcoe County1 36.73% 36.85% 33.28%
1South Simcoe includes Adjala-Tosorontio, Bradford West Gwillimbury, Essa, Innisfil & New Tecumseth

 

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