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Prices down 15% | Sales down 21%
Toronto Real Estate Board: Changing GTA resale housing market reflects economic times.
Activity in the Greater Toronto Area resale housing market moderated considerably during the first half of October with 2,700 homes changing hands, Toronto Real Estate Board President Maureen O’Neill announced today.
Sales volumes in the GTA decreased 18 per cent compared to the first half of October 2007, when 3,297 transactions were recorded and are down 10 per cent compared to the same period in 2006 when 3,007 sales took place.
In the City of Toronto 1,140 sales took place in the first half of this month. This represents a 21 per cent decline from the 1,446 sales that took place in the same period a year ago and a 13 per cent decrease from the 1,312 transactions recorded in the first half of October 2006.
In the 905 Region there were 1,560 sales in the first two weeks of this month, a 16 per cent decrease from the 1,851 transactions that took place during the same time frame in 2007 and down eight per cent from the 1,695 homes sold during the first half of October 2006.
House prices declined throughout the GTA during the first half of the month. The average price of a GTA home is currently $353,772, down 11 per cent from $399,013 recorded the comparable period in 2007.
In the City of Toronto the current average price $375,804, a 15 per cent decrease from the $441,878 average recorded at mid-October 2007.
In the 905 Region the average price of a home is currently $337,671. This represents an eight per cent decline from the $365,527 average recorded during the first half of October 2007.
With 27,559 properties currently listed on the TorontoMLS system, there is now 30 per cent more available stock from which to choose as compared to a year ago when 21,182 homes were listed.
“More choice can mean slightly longer wait times for sellers whose homes are now on average, selling after 34 days on the market as compared to 29 days a year ago,” said Ms. O’Neill. “The list to sales ratio is 97 per cent of the list price.”
Increased sales activity was noted in specific pockets located throughout the GTA.
Sales in Oshawa (E16) increased 15 per cent compared to the first half of October 2007, based mainly on solid sales of detached homes.
In Brampton West (W24) sales in the first half of October increased 21 per cent compared to the same period a year ago mainly due to strong attached row house sales.
Downtown East (C08) experienced a 16 per cent overall increase in activity compared to mid-October 2007 primarily as a result of condominium apartment sales.
Newmarket saw a 17 per cent increase in sales compared to the first half of October 2007 as a result of strong condominium apartment and semi-detached home sales.
Previous news releases have incorporated 2006 comparisons. This was necessary in order to place the market statistics in a broader context. We will be referencing 2006 in its entirety at the end of the month when it will be more relevant.
“While we continue to watch the economic picture globally, it is the local real estate climate that will determine our market place,” said Ms. O’Neill. “After the 2007 record highs, 2008 is an encouraging market for buyers.”
October 17, 2008 in Toronto Real Estate Update | Permalink
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Comments
What sky-high interest rates are you talking about, people? They are near historical lows and falling fast. The International Monetary Fund said Canadian real estate was priced 2% under its underlying value BEFORE this year's price pullback (unlike the US and the UK which they said was 30-45% over). Canadians' equity in their homes is greater than 5 years ago, and so is their income to mortgage debt. Unemployment has seldom been this low in the past 30 years. CIBC's top economist recently pointed out what is surprisingly obvious--just like every major recession in memory, this one started as oil prices began to climb, and oil prices pushed the world into recession long before U.S. homeowners quit paying their mortgages (that's probably why lots of them quit paying); and now that oil prices have fallen back and China isn't as busy, North Americans have all that extra gas, food, transportation and heating money back in their budgets. This economist predicts that lower fuel prices will let consumers revive the economy. If you write off interest on an investment property, you're probably making more in tax savings than if you put your dowpayment cash in the bank. Really, what can you put your money in that has better fundamentals?
The LIBOR is less than half what it was 3 weeks ago and drops some more almost daily. Do you want to see the prices go up BEFORE you buy??? Fear shouldn't tell you what to do. Everyone says buy low, sell high, but no-one does it.
Posted by: FactsRFear | Nov 11, 2008 4:50:56 PM
Hey DavidM,
Yeah I hear you when you say that there is basically nowhere safe to put your money these days. I've been keeping all mine in cash since Aug07 (cashable GIC's mainly) which I hope is going to minimize my losses to inflation.
With unemployment set to (or already) skyrocket, I think that liquid assets and cash will probably be preferable to illiquid assets like real estate.
I expect the foreclosure problem to come to Canada very soon. I personally know of a couple who were recently married, bought a 3500 sqft home in Richmond Hill, and are now about to divorce. He is renting an apt downtown while she is still living in the house and they cannot sell it for what they owe on the mortgage. They are one big fight or one lost job away from bankruptcy. Somehow I feel that we are going to see a lot of this. At that point it becomes a vicious circle.
Another worry is that the Canadian banks, unlike those in the US, have not securitized their mortgage loans to the same extent. That means those toxic mortgages which will result from our housing bust will be sitting on their books, and thus we the taxpayer (through the CMHC) will be on the hook. Why do you think the goverment (via CMHC) is buying a tonne (billions and billions) of the worst mortgages from the Canadian banks as we speak? To avoid the Canadian banks having to take massive writedowns a-la their US counterparts. Can you imagine CIBC, which has already lost half of it's value, having to declare massive losses on it's mortgage portfolio for the comign quarters. Think of the panic that will cause Canadian financial investors.
This is gonna get ugly. What started as a real-estate (and debt-based consumer economy) problem has finally spread....it's like a cancer.
Good luck to all of you out there....I hope you are all well prepared for what is going to happen.
Posted by: Toronto Bear | Oct 27, 2008 12:06:56 AM
Toronto Bear, the economic situation has changed drastically, oil is low and going lower (maybe), resource costs are going down, as will labour if this keeps getting worse. So with this new picture, I'd expect real estate prices to go down, perhaps drastically. But we could see inflation and real estate would be a safe harbour, but that could be countered by high interest rates. I'm not an economist (and clearly they are also just guessing), but I wish I knew because I'm just sitting on the cash I have after selling my last place (which I sold believing the Toronto condo market was going to level out, no crash), it's not like there's anywhere reasonable to put it right now.
Posted by: davidm | Oct 24, 2008 12:09:44 PM
Comment for DavidM,
So what do you make of the numbers we are seeing?
One of your former quotes:
"There is certainly a lot of uncertainty out there, but with rising resource costs, it seems likely that property values would rise, especially in cities, which are closer to the essentials of life.
It is the "exurbs" that are most likely to fall in value.
Now prices in the core seem to be falling faster than the burbs.
I would have tended to agree with you that I think high fuel prices etc should have more of an impact on the burbs but so far that hasn't been the case. Now with oil/fuel dropping...??
I am curious as to where you think the market is heading? I have long been predicting a drop in Toronto in the range of 15-35%, Vancouver 40-60% and Western Canada 30-60%. I am as big a bear as they come but even I am surprised how fast prices in Toronto seem to be dropping.
We are living in interesting times to be sure!
Posted by: Toronto Bear | Oct 22, 2008 10:54:49 PM
cw ... Aloha bashing... It looks like brainwashing at REMAX loosened your brain cells...
People like me are waiting for a huge correction 30-40% and luckily I am not the only one because others are following too and there are no offers any more for dumps that you used to sell....;)))
Posted by: Sale | Oct 22, 2008 10:12:07 PM
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