Canada's Condominium Magazine
Three straight months of gains (month-over-month) may indicate recovery in the resale market. Many buyers appeared to press the “pause” button after new Ontairo government rules hit the market in summer. The trend of three ‘uptick’ months indicates many have moved back into the market after a short wait.
Despite a lull in sales, as compared to previous fall markets, prices continued to climb — in condominiums, the new home of choice in the GTA, they actually increased significantly.
The MLS® Home Price Index Composite benchmark price was up by 9.7 per cent 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 per cent compared to the average of $762,691 in October 2016.
Sales up for the third month
In Toronto, according to the Toronto real Estate Board, sales were up in October (over September 2017) by 12 percent — well above the typical fall market blip. Nationally, according to the Canadian Real Estate Association (CREA), sales crept up at a 0.9% rate in the same period. Importantly — in an ongoing trend — inventory was down, with newly listed homes slipping 0.8% nationally. Referring specifically to the GTA market, Tim Syrianos, the TREB President said:
“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.”
Nationally, CREA indicated the ration of sales to new listings was 56.7% in October. According to CREA, the balanced ratio is 40-60%. The ratio has crept into the upper limit of “balanced.”
Year-over-year, of course, sales are nationally down 4.3% in October.
Mortgage rules blip?
CREA President Andrew Peck suggests there may be a 2017 increase in sales as buyers race to beat the new mortgage rules set to come into effect January 1, 2018.
“Newly introduced mortgage regulations mean that starting January 1st, all home buyers applying for a new mortgage will need to pass a stress test to qualify for mortgage financing,” said CREA President Andrew Peck. “This will likely influence some home buyers to purchase before the stress test comes into effect, especially in Canada’s pricier housing markets. A professional REALTOR® is your best source for information and guidance in negotiations to purchase or sell a home during these changing times.”
However, short inventory and the apparent willingness of buyers to re-enter the market signal a soft rebound for most analysts, with prices expected to rise.
New resident offset
Offsetting the drag of new mortgage rules is the expected increase in new residents to GTA on the heels of new Federal targets. The increased-over-projected population, together with short inventories of both resale and new will likely pressure prices upwards. [Condo.ca reported on the expected impact of increased new residents in our story “The numbers game…”>>]
Nationally, CREA highlighted:
- National home sales rose 0.9% from September to October.
- Actual (not seasonally adjusted) activity stood 4.3% below last October’s level.
- The number of newly listed homes edged back by 0.8% from September to October.
- The MLS® Home Price Index (HPI) was up 9.7% year-over-year (y-o-y) in October 2017.
- The national average sale price climbed by 5% y-o-y in October.