Consumers Always Benefit .
October 12, 2012 — A cooling trend in the Bigger Toronto Area resale home market continued in September, with 5,879 houses changing hands. While this represents a Twenty-six per cent fall from the 7,422 sales that took place in September 2011, it is really important to notice that this year September offered 2 fewer working days compared with September 2011. When compared on a per working day basis, sales were down by 12.5 percent year-over-year similar rate of decline to that reported in August. When making the year-over-year comparison for September, it should additionally be noted that September 2011 represented the 2nd best sales on record for that month. So, while sales were off relative to last year, the comparison is being made to a near historical high. In the meantime 3,624 houses changed hands in the 905 Area last month, a 21 per cent decrease from the 4,387 sales that took place there in September 2011.
In Toronto 2,255 transactions took place last month compared against 3,035 sales last year, a drop of more than 34 percent. Price growth stayed robust because market conditions stayed tight, with months of inventory continuing to trend below 2.5 months.
While sales were down compared to last year, strong average pricetag expansion continued to be reported, particularly for low-rise home types including single-detached and semi-detached homes and townhouses. Traditionally, when months of inventory has been below 3 months, year-over-year costs gains have typically been well-above the rate of inflation.
The City of Toronto, with a typical cost of $547,901 showed a marginally stronger increase of more than 10.5 per cent compared to a nearly 8 % rate of growth in the 905 Region, where the average price was $476,135.
The average price of a GTA home reached $503,662 in September, an increase of more than 8.5 per cent compared against a year back.
Year-over-year price gains were strongest for semi-detached houses in the City of Toronto last month, at Sixteen %. Detached houses in Toronto followed with a gain of ten per cent. Detached houses in the 905 Region matched Toronto condominium price appreciation with an increase of eight percent. Toronto townhouses and semi-detached homes in the 905 Region in the meantime, both showed year-over-year price rises of seven %.
Provided there isn’t a significant change to the commercial outlook for the rest of this year and through 2013, market conditions should stay tight enough to promote home price expansion over the following year. However, while months of inventory remains very low, this indicator has been trending upwards over the last few months. This implies the market is starting to become better-supplied. Buyers will find advantages in more choice in 2013, implying the rate of price growth will moderate into the low to mid single digits.
Reports on the work front was neutral in September, as the GTA rate of unemployment remained unchanged from the month before, at 8.5 %. The number of folks employed in the GTA rose by 2.3 %.
While the Bank of Canada continues to hint at a future rate jump, IRs have continued to stay stable as well, with a five year fixed mortgage rate of slightly over three % continuing to be available.
Although September’s activity was consistent with the more moderate speed of sales activity we have seen in the last few months, it is important to recognize that property should really be viewed as a long term investment, which can sometimes be measured in years rather than months. Given that it also offers a place to build lasting memories even though it appreciates in value, there’s no doubt that in the long term, it may continue to be one of the most favoured financial investments of many Canadians.