Toronto’s housing market has been as hot as this week’s weather, but new data from the Greater Toronto Realtors Association suggests that the oft-predicted and much-feared cooling of Toronto’s market could finally be here. It seems that Canada’s new, stricter mortgage rules and a raft of bubble warnings have made buyers more cautious—well, that’s what pundits think, anyway. Here’s a breakdown of the most important numbers and what they may mean for Toronto homeowners:
• According to the GTRA, Toronto sales were down 13 per cent in June compared to June 2011—which was the biggest drop in sales in the entire GTA. The Toronto Real Estate Board claimed that the land transfer tax is hindering Toronto’s market, sending homebuyers to the 905 (a point it has tried to make on at least one other occasion). However, Torontoist had doubts that the land transfer tax is to blame, sardonically observing, “It’s an interesting theory, given that the land transfer tax took effect February 1, 2008—quite the delayed reaction, it would seem.”
• Condo sales in Toronto’s core had the largest slump, dropping 18 per cent. Even more worrisome, Craig Alexander, chief economist at the Toronto-Dominion Bank, told the Globe and Mail the new figures don’t entirely capture all the new developments still going up in the city. Once those condos hit the market, Toronto could well have a glut, sending prices plummeting. Indeed, other brokers and agents also say that demand in the pre-construction market is significantly less than in the market for existing units.
• There may be fewer sales, but prices in the 416 continued to climb, with the average selling price in June at $554,077, up from $511,591. However, that trend will likely reverse in the coming months, according to CIBC deputy chief economist Benjamin Tal. “We know that prices tend to follow sales by about three to five months,” he told the Canadian Press, meaning Toronto home prices could fall come autumn.
• GTA REALTORS® Release Monthly Resale Market Figures [Toronto Real Estate Board]
• Duly Quoted: Ann Hannah, Toronto Real Estate Board [Torontoist]
• Cautious buyers send Toronto condo sales plunging [Globe and Mail]
• Housing sales cooling in Toronto, Vancouver; analyst predicts prices will fall [Canadian Press]