The number of existing homes that sold in the Greater Toronto Area in January was down only slightly from a year ago, a development that the realtors’ association says suggests that buyers are returning to the market.
There were 4,375 sales over the Multiple Listing Service during the month, compared to 4,432 in January of 2012. There had been 3,690 sales in December, down from 4,585 sales in December of 2011, as the market saw a sharp decline in year-over-year sales each month during the latter part of the year.
“The January sales figures represent a good start to 2013,” Ann Hannah, the president of the Toronto Real Estate Board, stated in a press release Tuesday. “While the number of transactions was down slightly compared to last year, the rate of decline was much less than what was experienced in the second half of 2012. This suggests that some buyers, who put their decision to purchase on hold last year due to stricter mortgage lending guidelines, are once again becoming active in the market.”
Finance Minister Jim Flaherty tightened up the rules for mortgage insurance in July by, among other things, cutting the maximum length of an insured mortgage from 30 years to 25. Realtors blamed the drop in sales on the new rules, saying that the changes knocked a number of first-time buyers out of the market.
Mr. Flaherty had been worried that consumers were taking on too much mortgage debt and that the price of homes were rising too quickly. Toronto’s condo market had been a particular worry for him.
The figures released Tuesday show that there were 730 sales of existing (as opposed to newly constructed) condos in Toronto’s downtown area covered by the 416 area code during January, down 4.5 per cent from a year ago. In comparison 680 condos sold during December, down 26.9 per cent from a year earlier.
The average selling price during January of all home types in the Greater Toronto Area was $482,648, up 4.3 per cent from $462,655 a year ago. The MLS Home Price Index Composite Benchmark price was up 3.8 per cent from the same period.
On Monday the Real Estate Board of Greater Vancouver said that there were 1,351 resales in January, down 14.3 per cent from a year ago but up 18.3 per cent from the prior month. Experts point to Vancouver as the Canadian market that was most overheated, and the slowdown began earlier there than elsewhere in the country. The real estate board says prices have come down by about 6 per cent since last spring. January’s sales level was the second lowest that Vancouver has recorded for that month since 2001, and potential sellers are increasingly taking their homes off the market.
The decline in new listings in Vancouver could ultimately temper the price declines, BMO Nesbitt Burns economist Robert Kavcic noted Tuesday.
Calgary continues to be an outlier, with January’s sales up more than 15 per cent from a year earlier.