Detached Toronto home prices fall, while condo prices soar in October

The usual seasonal bounce in re-sale homes between September and October was more pronounced than usual this year in the Toronto region, growing 12 per cent.

But there were still 2,597 — about 27 per cent — fewer sales this October compared to the same month last year.

Home prices also rose 2.3 per cent year over year in October, but new numbers from the Toronto Real Estate Board (TREB) on Thursday showed some areas are doing better than others.

The average price of a home — including all housing types from apartments to detached houses with yards — rose 2.3 per cent to $780,104, compared to $762,691 last year.

But detached house prices were down 2.5 per cent across the region — a 4 per cent decline in the 905 area to an average price of $910,488 and, a 1.1 per cent drop in Toronto to about $1.3 million.

Condos, however, continued to perform well, up 21.8 per cent across the region to an average price of $523,041.

The divide between the City of Toronto and the surrounding region is a function of the housing stock that's on the market, said Jason Mercer, TREB's director of market analysis.

Source: Thestar.com

GTA REALTORS® Release October Stats

November 2, 2017 -- Toronto Real Estate Board President Tim Syrianos reported 7,118 residential sales through TREB's MLS® System in October 2017. This result represented an above-average increase between September and October of almost 12 percent, pointing to stronger fall market conditions.

On a year-over-year basis, October sales were down compared to 9,715 transactions in September 2016. Total sales reported through the first 10 months of 2017 amounted to 80,198 – down from 99,233 for the same time period in 2016.

"Every year we generally see a jump in sales between September and October. However, this year that increase was more pronounced than usual compared to the previous ten 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," said Mr. Syrianos.

The MLS® Home Price Index Composite Benchmark price was up by 9.7 percent on a year-over-year basis in October. Annual rates of price growth were strongest for townhouses and condominium apartments. The average selling price for October transactions was $780,104 – up by 2.3 percent compared to the average of $762,691 in October 2016.

"The housing market in the GTA has been impacted by a number of policy changes at the provincial and federal levels. 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," said Jason Mercer, TREB's Director of Market Analysis.

Source Treb

Toronto Real Estate Heat Up And Cool Down Over The Past Year

OCTOBER 2, 2017

Toronto real estate went from booming to excess in just a few short months over the past year. I’m preparing some notes for next week’s CMHC panel on the future of home prices and thought I would give readers a peek at some of the indicators we use. This is a simple, but a powerful indicator that just happens to look pretty cool on a map – buyer confidence in prices.

When buyers are confident in a market, they’ll pay a premium to enter. The thrill of the buy often leads to a rapid build of overconfidence, and that’s what happened in Toronto this year. To illustrate this, we graphed the number of people who paid over asking price.

Buyers Were Frenzied In April 2017

The video above shows buyer distribution, and visually graphs the increasing normalization of overpaying, and then the cooling of the market. Each blue dot represents a sale where transfer records show they paid less than the buyer was asking, a.k.a. it sold under ask. Each red dot represents a sale where the buyer asked for less than transfer records indicate they paid, a.k.a. it was sold over asking. Homes that were deliberately priced under ask for marketing (i.e. the seller priced way below market), were removed. Note, the dots show the vicinity of the sale, not the exact location, to protect privacy.

Toronto’s market started to pick up last summer, but it wasn’t until 2017 buyers began throwing money around. From January to April 2017, you’ll see sales over ask completely saturate the map. It isn’t until May that the trend makes a sharp reversal, making a steady drop into August 2017.

Over 77% Of Buyers Paid Over Asking Price At Peak

Now that we have a visual of the madness, let’s go through the numbers. In August 2016, 37.16% of sales were sold over asking price. That’s solid demand, and shows a good amount of push and pull between buyers and sellers. At the peak in April 2017, 77.67% of sales in Toronto were over asking price. This is almost 4 out 5 buyers, giving sellers more than the steep price increases they were asking. By August 2017, that number has fallen back down to 23.7%.

Why Did It Stop?

The government likes to take credit for the cooling with the Fair Housing Plan that rolled out at the end of April. Although you would have to be pretty gullible to believe that a tax on the 5% of foreign buyers resulted in an immediate -19.76% decline in the number of people paying over asking price. The price of homes didn’t drop overnight because of a new tax, people paused just long enough to realize they became frenzied. Even the slightest regulatory breeze would have temporarily knocked sense into people.

Note, I said temporarily. Typically without a significant consequence to buyers, the public resumes piling into assets in a phase commodity analysts call the distribution phase. This is when people think a market has “returned to normal,” while larger investors “distribute” excess holdings to the public. Prices will climb for a short period again, followed by the public realizing large money is exiting, then trying to get out themselves.

Ideally, this is orderly, but if it isn’t – that’s when you get the opposite of what happened in April. People begin irrationally selling below value, at a similar rate. The strange thing is, this is a very well-studied and documented phenomenon. People happen to do this with almost every commodity, almost every time.

Source: Better Dwelling.

GTA August 2017 Report

September 6, 2017 -- Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 6,357 home sales through TREB's MLS® System in August 2017. This result was down by 34.8 per cent compared to August 2016.

The number of new listings entered into TREB's MLS® System, at 11,523, was down by 6.7 per cent year-over-year and was at the lowest level for August since 2010.

"Recent reports suggest that economic conditions remain strong in the GTA. Positive economic news coupled with the slower pace of price growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular seasonal bump, as we move through the fall," continued Mr. Syrianos.

The average selling price for all home types combined was $732,292 – up by three per cent compared to August 2016. This growth was driven by the semi-detached, townhouse and condominium apartment market segments that continued to experience high single-digit or double digit year-over-year average price increases.

The MLS® Home Price Index composite benchmark, which accounts for typical home types throughout TREB's market area, was up by 14.3 per cent year-over-year in August. 

The fact that MLS® HPI growth outstripped average price growth, points to fewer high-end home sales this year compared to last.

"The relationship between sales and listings in the marketplace today suggests a balanced market. If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels," said Jason Mercer, TREB's Director of Market Analysis.