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Toronto home prices up, sales down
GTA resales in decline as inventory levels surge
The spring rebound anticipated by realtors in the Toronto area market hasn't happened – at least not yet. Existing-home sales in April were down from the record highs of last year, with 8,762 homes sold, according to the Toronto Real Estate Board in figures released yesterday.
This is the fourth-consecutive month of declining home sales. April was considered a bellwether since it was the first month of good weather after one of the coldest and snowiest winters in recent years. Most analysts had expected pent- up demand to emerge in the spring market as potential homebuyers were hampered by slush and snow in the first quarter of the year. "With affordability the lowest in 17 years, the housing market should continue to cool, despite recent declines in mortgage rates," said Sal Guatieri, senior economist at BMO Nesbitt Burns, in a note yesterday.
Inventory, in the form of new listings, was also up significantly in April.It advanced by 18 per cent to 18,691 as sellers hoped the better weather would bring buyers out. "We're going to have to watch May very closely as well to see if there is a trend," said housing analyst Will Dunning.
However, Dunning said the market was fundamentally healthy and noted it is coming off record highs of 2007. Prices are still appreciating because sales still remain at historically lofty levels, even though they may be sliding. The average Toronto-area price in April almost hit the watershed $400,000 mark at $398,687, up 5 per cent from the same period a year ago. The housing market is coasting on strong job numbers and the wealth generated on the Toronto Stock Exchange over the last few years, said Dunning. "You would need a pretty big shock to consumer confidence to totally derail the market," said Dunning. "Most Canadians so far have reason to feel good about their earnings and employment."
Toronto prices, however, are holding up, with a consensus of analysts forecasting 3 per cent appreciation this year. "We continue to experience a supply and demand situation and to date, it remains a sellers' market," said Toronto Real Estate Board president Maureen O'Neill.
Sales activity was markedly different in the city of Toronto compared with the 905 region, added O'Neill. While Toronto experienced a 10 per cent drop in sales, the 905 market experienced only a 5 per cent fall by comparison. The real estate board is tracking sales in both areas because of a controversial new city of Toronto land transfer tax that took effect this year.
Sources: Toronto Real Estate Board and the Toronto Star.
May 6, 2008 | Permalink
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Comments
I really hoped that real estate market will rebound at the beginning of spring like every year. Unfortunately I have recorded even higher decline than during past three months. Even lowering of overnight rates by Bank of Canada did not change bad expectations and Banks and brokers are staying reluctant to change their interest rates.
Posted by: Toronto realtor | May 8, 2008 4:52:30 AM
"We continue to experience a supply and demand situation and to date, it remains a sellers' market," said Toronto Real Estate Board president Maureen O'Neill.
What's mean experience of a supply and demand?
Supply in April is increased more than 7% and demand felt down 7.2%,about previous month demand felt 22.2% and supply felt only 6%. But the prizes only going up,'it's a logic sellers' market forever'.
Posted by: mike | May 6, 2008 5:24:25 PM
Incomes are not increasing in the GTA. In fact they declined over the 2000 to 2006 period as determined by the government of Canada census released last week. All these price appreciations are clearly unsustainable.
Posted by: Toronto Bear | May 6, 2008 12:09:44 PM
Does seem to be an overly optimistic/rosy interpretation of mostly negative stats. How many months of consistent performance will it take before the outlook changes?
While it may be true that interest rates are still declining, it doesn't mean the banks are willing to lend out more and more principal to support the climbing prices. Plus, even if incomes are increasing, we have to remember that 3% appreciation on home prices at $500,000 equates to $15,000 (to make the math easy) in after-tax dollars. Even on relatively high incomes, that translates to many many years of increased incomes, just to break-even. Surely, this cannot be sustainable, no matter what the real estate professionals may profess.
Posted by: | May 6, 2008 10:57:54 AM
Unbelievable!,Yesterday Toronto Real Estate Board report that resale is down 7.2% for period of April, in March down 22.2%,February down 11.2% and January down 2.1%,but Average Price increased about 6% from last year. To when will be fake sellers market in Toronto Area because alredy we have increased listings more than 7% and decreased sales about 7.2%, also economy is in recesion in Ontario but they still increased Home prizes.Still Most of sales of houses are in Burlington,Orangville,Brock,Bowmanville,Georgina etc. Something is wrong about Real Estate Market in Toronto.
Posted by: | May 6, 2008 10:54:41 AM
