TORONTO, ONTARIO, October 3, 2018 – Realtor® members of the Toronto real estate board this morning reported the September, 2018 MLS® residential sales statistics which reflect a market in search of a direction. What’s most popular in the majority of areas continues to be homes at lower price points, arguably for a variety of reasons including the threat of [continuing] rising mortgage rates; the “stress test” which requires buyers to qualify at higher interest rates that they’re actually approved for; sellers evidently still in a degree of “denial” as to what their properties are worth…among other factors. All of these, of course, relate directly to affordability - thus the bias toward the more moderate price ranges. ?
As might be expected, inventory also continues its reversion from historic lows early last year. Total Active Listings were up 5.6% versus September, 2017, to 20,089 homes on the market. Actual “New Listings” were down 3.1% to 15,920. Based on the month’s sales, then, the Absorption Rate [Sales/New Listings] stood at .405 [.387 one year earlier]. Forward Inventory [Total Active Listings/Sales] stood at 3.11 months [2.98 months one year earlier]. All figures herein are year-over-year comparisons unless otherwise noted.
Of particular interest is the fact that September sales of 6,455 were below the August total of 6,839. That’s a pretty significant 5.6% drop, particularly given that September is usually a more active month coming out of the dog days of summer. Sales were up 1.9% YoY from last September’s 6,379.
As for interest rates, the Bank of Canada overnight rate was “up 50%” to 1.5% YoY; the Prime Rate stood at 3.7%, up 15.6% [from 3.2% a year ago]. More hits to affordability, particularly once that Stress Test is factored in. You don’t have to look any further than a graph of the Canadian 5 year bond yield…here’s a chart back to September, 2014.
And, not that it's “universal” by any stretch - there are pretty wide community-to-community market divergences around the GTA - but a client asked the other day what’s going on in the relatively tony community of King City specifically. The numbers there show over fifty percent more homes sold this September versus last, but the median price of those sales has shifted lower [-24.3%].What’s also interesting is that the property tax figures for those sales was only about 3% lower [Median] indicating that the homes sold in each period weren't that different, but the prices for those similar houses had fallen. Sales of Bungalows - including their various “sub-styles” [Bungalows, Bungalofts, and Raised Bungalows] were consistent among the two periods at fifteen to sixteen percent of the total. Here’s the Quick Snapshot of those King City numbers [you can get updates for your own ‘hood here].
Detached home sales in Metropolitan Toronto rose 4.6% to 665 at an average sale price of $1,342,363, down 1.4% YoY; up 7.9% from August; and down 15% from the April, 2017 peak. In the balance of the Greater Toronto Area - “The 905” area code - Detached sales were up 2.1% to 2,164 at an average of $905,722, down .6% YoY; virtually unchanged from August; and down 19.2% from their peak which was actually the month prior to Metro Toronto’s peak.
Sales of Condo Apartments were down 5.5% - largely due to that demand at the lower overall price points and the lack of supply - to 1,282 units at an average sale price of $615,582, up - as might be expected due to the supply/demand situation - +11.7%. Even in the rest of the GTA demand for Condo Apartments remains relatively robust with sales up 3% to 509 units at an average of $455,686, up 6.4%.
Because of continued demand for them, Condo Apartment sale prices have withstood the cooling of the broader market since last spring’s peak: In “The 416”, last April’s average was $578,280 [$615,582 now]…on sales of 2,324 [1,282 now]. Prices in The 905 have simply held their ground from last April’s average of $449,792 [$455,686 now] on sales of 865 units [509 now].
Jason Mercer, TREB’s Director of Market Analysis said in the report, “Generally speaking, annual rates of price growth have been stronger for higher density home types in 2018, including condominium apartments, townhouses and semi-detached houses. In many neighbourhoods, these home types provide more affordable home ownership options. This is why a policy focus on increasing mid-density housing options throughout the GTA is important.”
Overall, including all home types and all TREB market areas, sales volume was up 1.9% to 6,455 at an average of $796,786, up 2.9% with the only declines in terms of average sale price being those in the Detached sectors.
Homes sold “8.3% slower" than this time last year at 26 days on the market [DOM] compared to 24.
Thank-you for reading - and don’t forget to grab your own Quick Neighbourhood Update here.
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