Canada's Condominium Magazine
May is normally hot market time. To see a year-over-year sales drop of —20.3 percent (year over year) would have been a shocking development prior to the Ontario Government’s “Fair Housing” rules.
Prices, on the other hand, increased, in part due to a shortage of listings on a year over year basis. Significantly, though, on a month over month basis prices actually dropped 7 percent. Although sales listings increased by 42.9 percent over last year, it’s still considered a significant shortage against demand.
Toronto declines, according to TREB:
—26.1 percent for detached
—14.1 percent for semi-detached
—24.3 percent for Townhouse
—4.3 percent for condos
Prices, meanwhile averaged $863,910 this May versus $752,100 last year in the GTA.
This may be the soft landing many Ontarians were looking for, that “easing” of forces, although most analysts say it’s too early to say. Instead, TREB Real Estate Board President Larry Cerqua gave credit to a lift in listings (which many believe is due to the new Ontario rules):
“Home buyers definitely benefitted from a better supplied market in May, both in comparison to the same time last year and to the first four months of 2017. However, even with the robust increase in active listings, inventory levels remain low. At the end of May, we had less than two months of inventory. This is why we continued to see very strong annual rates of price growth, albeit lower than the peak growth rates earlier this year,” said Mr. Cerqua.
Condos have their own vibe
Condos have their own “vibe” in the market, as the most affordable “goldilocks” solution for many. Unlike houses, condo resale listings are down — but there are many spectacular condo new developments in play.
Year-over-year prices for condominium apartments rose more than for low-rise town homes, likely due to the increase in listings for resale town homes.
Ontario Fair Housing Plan
According to TREB: “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.