Toronto’s real estate market continues to confound the people trying to predict what it will do next, but there’s no doubt the market watchers who warned us about a long stretch of volatility have been spot on.
The rebound in sales in the first half of September was even more eye-popping than the jump in August.
The Toronto Real Estate Board reported this week that sales increased 29 per cent in the first 14 days of September, 2013. What’s more, those plentiful condos led the way.
Over all, new listings slipped 2 per cent while prices rose by 4 per cent on an annual basis.
Jason Mercer, TREB’s senior manager of market analysis, says, “the only argument that makes sense is for continued home price growth in the Greater Toronto Area for the remainder of 2013.”
All segments of the market had a bump, but sales of condos in the Toronto core increased by a whopping 42.6 per cent.
Douglas Porter, chief economist at Bank of Montreal, points out that the comparisons to last year are easier – that is, the market during last August and September was so moribund that it’s easy to look good in comparison.
Mr. Porter adds that sales in cities across Canada were no doubt juiced by potential buyers who were jumping in with their pre-approved mortgages before rates move higher.
“Suffice it to say that next to no one predicted a big mid-year bounce in home sales at the start of 2013 when calls for Canadian housing market calamity were all the rage,” says Mr. Porter in a not to clients.
He points out that comparisons will remain easy for the next eight months because of the slump the market went through during all of last fall and winter and into the spring.
While the sales figures have been up and down like a yo-yo over the past year, prices just keep quietly churning ahead, Mr. Porter adds.
Toronto-Dominion Bank economist Diana Petramala also cautions that this recent spurt of strength needs to be kept in perspective. Speaking about the national market, she says that sales are still well below the 2009 peak.
David Madani of Capital Economics, meanwhile, points out that Canada’s home ownership fling is worse than the heights reached in the United States before the meltdown in their market. He says the popularity of sub-prime mortgages no doubt contributed to the sharp rise in U.S. home ownership and allowed that Canada has a far more conservative banking regulatory system, but he adds that the speed of the increase in ownership rates seen south of the border has easily been matched in Canada.