Home sales in Toronto rose on a monthly basis in August for the first time since the GTA foreign buyer tax was announced this spring, rising 7.4% compared with July, according to figures released September 6 by the Toronto Real Estate Board (TREB).
However, the total of 6,357 home sales was still the Greater Toronto Area’s (GTA) lowest August performance for many years, just shy of 2012’s activity and 34.8% down from August 2016 (see graph below).
Just as was seen in Greater Vancouver after its foreign buyer tax was introduced last year, the GTA’s lower home sales compared with the previous year didn’t necessarily equate to lower home prices, although benchmark prices did slip slightly compared with July.
The MLS® benchmark home price index (HPI) was up by 14.3% year-over-year in August, with the benchmark price now at $755,400, which is 2.3% lower than July. This compares with the average GTA selling price in August, which rose by a more modest 3% year over year to $732,292.
Average prices can be skewed upwards or downwards by large numbers of high- or low-priced home sales, whereas the benchmark HPI examines the sale price of a typical home. The board stated, “The fact that MLS® HPI growth outstripped average price growth points to fewer high-end home sales this year compared to last.”
Despite the recent slowdown in sales, the board said it was optimistic that real estate demand would rally further into the fall. TREB president Tim Syrianos said, “Recent reports suggest that economic conditions remain strong in the GTA. Positive economic news coupled with the slower pace of price growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular seasonal bump, as we move through the fall.”
With just 11,523 homes newly listed on the market in August, new inventory was down 6.7% year-over-year and was the lowest level for August since 2010.
Jason Mercer, TREB’s director of market analysis, said, “The relationship between sales and listings in the marketplace today suggests a balanced market. If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels.”
Sales and Prices by Property Type
Just like in Greater Vancouver in the months following the foreign buyer tax, the slowdown in unit sales was led by the detached home sector. There were 2,578 single-family home sales in the GTA last month, a 41.6% decline compared with August last year, but a rise of 5.9% since July.
The benchmark price of a detached home in the TREB region is $936,100, up 10.5% year over year but down 2.8% since July.
Semi-detached homes such as half-duplexes (also referred to as single-family attached) fared a little better, with their total of 588 unit sales 31.3% lower than a year ago. This is just five units, or 0.9%, more than July this year.
The benchmark price of a “single-family attached” home now stands at $713,500, 9.7% higher than August 2016 and a month-over-month slide of 2.4%.
Moving down the home-size scale, townhouses and row home sales performed better still, dropping by the lowest amount of all the home types, down 27.5% from last year to 1,090 sales, which is a healthy 11.9% rise month over month.
The price of a typical GTA townhome is now $560,800, 20.15% higher than a year ago but 3% lower than July’s benchmark of $578,200.
Condo sales did similarly well as townhomes, comparatively speaking. There were 1,996 condo-apartment units exchanging hands in the GTA in August, which is 28% lower than one year previously, but 8.5% higher than the previous month.
The price of a typical condo remained robust, up a whopping 26.1% year over year to $460,600, which is just 0.5% lower than July.
However, there are wide variations in prices and price growth throughout the GTA region, with annual condo price rises ranging from 15% to more than 30% across differing neighbourhoods, and the overall composite price rise ranging from 8% to more than 27%.
To see the full breakdown of prices and sales by region and neighbourhood, click on TREB’s August Market Watch report.