What Cooldown? GTA Home Sales See Fifth Monthly Increase

Mortgage stress test coming in January, plus “waning” impact of foreign buyer tax, may explain trend-bucking November 
Joannah Connolly
December 5, 2017

November is historically a time when the real estate market cools down ahead of the winter season – but not so for home sales in Greater Toronto last month, according to figures released December 5 by the Toronto Real Estate Board (TREB).

The sales total of 7,374 units bucked the seasonal trend by rising 3.6% compared with October, and reaching a figure higher even than that of November 2015. In the past five Novembers, only November 2016 saw more sales than last month, which was down 13.3% year over year.

 

Tim Syrianos, TREB president, said, “We have seen an uptick in demand for ownership housing in the GTA this fall, over and above the regular seasonal trend. Similar to the Greater Vancouver experience, the impact of the Ontario Fair Housing Plan and particularly the foreign buyer tax may be starting to wane. On top of this, it is also possible that the upcoming changes to mortgage lending guidelines, which come into effect in January, have prompted some households to speed up their home-buying decision.”

There were 14,349 new listings on TREB’s MLS® System in November – a rise of 37.2% per cent compared with November 2016, when supply was extremely low, and a 3.7% lower than October this year.

That brings the total number of homes available for sale as of the end of November to 18,197 – a massive 110.6% leap compared with the 8,639 homes available this time last year.

The composite benchmark price was up by 8.4% on a year-over-year basis to $744,700. However, the average selling price for a GTA home was down by 2% compared to November 2016, said TREB, “due in large part to a smaller share of detached home sales versus last year.”

Despite this, on a year-to-date basis, the average selling price was up by 13.4% compared with the same period in 2016.

Sales and Prices by Property Type

Continuing to follow Greater Vancouver’s post-foreign-buyer-tax trends, only eight months behind, Greater Toronto’s single-family homes were once again the main driving of the year-over-year decline in home sales. Detached house sales totalled 3,131, a 19.1% decline from November 2016, but just four units fewer than in October.

The price of a typical detached home in the GTA saw the lowest annual rise at 4.04%, but it was still an increase at $915,600. However, this is 0.6% lower than October’s benchmark price.

Sales of semi-detached homes such as duplexes – also referred to as “single-family attached” – totalled 741 units, 6.2% lower than November 2016. That’s a 6.8% increase from October 2017’s sales. Semi-detached benchmark prices increased on an annual basis by 4.5%, to $703,500, which is $1,100 lower than in October.

With 1,189 transactions, townhouse and rowhome sales were down 6.2% year over year, but up 3.3% over October 2017. The typical GTA townhouse is now benchmarked at a price of $544,400, which is a year-over-year increase of 11.7% but a 1.1% drop from the previous month.

Condo apartment sales in the GTA totalled 2,210 last month, 7.9% lower than one year previously but a jump of 9.1% over October’s 2,025 transactions. This could be because many first-time buyers, who tend to buy condos, will be most affected by the new mortgage stress test coming in January.

At $464,000, Greater Toronto’s condos saw by far the biggest year-over-year benchmark price rise, up 21.6% compared with the previous November. Like last month, this home type was the only one to see a month-over-month increase, albeit a tiny one at a mere $200, or 0.04%.

Jason Mercer, TREB’s Director of Market Analysis, said, “Changes in market conditions have not been uniform across market segments… We are still seeing seller’s market conditions for townhouses and condominium apartments in many neighbourhoods versus more balanced market conditions for detached and semi-detached houses.”

There are wide variations in sales figures, benchmark prices and price changes throughout the GTA. To see the full breakdown of prices and sales by region, neighbourhood and property type, go to TREB’s November Market Watch report.

 

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Joannah Connolly
Joannah Connolly is editorial director of Glacier Real Estate, Glacier Media's real estate division. Joannah writes and curates real estate news for Glacier Media's local newspaper websites, including the Vancouver Courier, North Shore News, Burnaby Now, Tri-City News and others. She also oversees editorial content in Real Estate Weekly Homes, West Coast Condo, Western Investor and Glacier's special real estate publications. A dual Canadian-British citizen, Joannah has 22 years of journalism and editing experience in Vancouver and London, with a background in construction, architecture, healthcare and business media. Joannah has appeared on major local TV outlets as a real estate commentator, has moderated and spoken on various industry panels, and spent two years hosting the Real Estate Therapist radio show on Roundhouse Radio.