Toronto’s housing market extended its slowdown in July with the fourth straight month of declining sales and flattening prices, as the province reopened more widely and the desperation to find bigger properties eased.
There were 9,390 home resales in the Toronto region in July, down 15 per cent from the same month last year, and down 2 per cent from June on a seasonally adjusted basis, according to the Toronto Regional Real Estate Board, or TRREB. Condos, with prices typically lower than houses, were the only type of property to see an increase in sales year over year.
Across the Toronto area, the average selling price of a home was $1,062,256, a 12.6-per-cent increase from July of last year and 0.9 per cent above June on a seasonally adjusted basis.
The home price index, which adjusts for volatility in pricing and sales, was $1,054,300, marking the second straight month of no movement after spiking 5 per cent in January.
“The motivation to sell or buy has gone down quite a bit. The urgency is not there,” said Katie Steinfeld, realtor with On The Block Realty Inc., who works in the Toronto region. Ms. Steinfeld said that change in sentiment started when the province began to reopen in the summer and Ontarians were able to leave their homes for non-essential activities such as patio dining.
The number of new home listings was down 31 per cent year over year. But even though there was less inventory, there were also fewer buyers willing to get into frenzied bidding wars. “If it is going to be a bidding war, they are shying away and not wanting to compete. Buyers are coming in with lower offers,” she said.
The stricter mortgage stress test that was instituted in June had little to no effect on the current slowdown given that the rule changes were so small, realtors said.
Christopher Alexander, senior vice-president with Re/Max Canada, said this year is turning out to be similar to a pre-COVID year with slower activity in the summer. Mr. Alexander said that although there is still competition and multiple offers taking place, there is a sense of calm compared with the pandemic-fuelled housing boom that started in May of 2020.
“There isn’t as much as ‘I have to buy now or I will miss out.’ People have more things to think about and do than just real estate,” he said.
Both Mr. Alexander and Ms. Steinfeld believe activity will pick up in the fall.
The board’s chief market analyst, Jason Mercer, said that the “strong upward pressure on home prices will be sustained” amid supply shortages and population growth.
In other major Canadian markets, activity also slowed. On a non-seasonally adjusted basis, sales in the Montreal area dropped 18 per cent from the previous month, according to the local board. In the Vancouver region and B.C.’s Fraser Valley, sales fell about 11 per cent over the same period, according to their local boards.
Prices were essentially flat in the Vancouver area with the index price of a detached house at $1,801,100 in July. In the Fraser Valley, the index price for a detached house edged down 0.4 per cent to $1,319,200, while rising incrementally for townhouses and condos. In the Montreal metropolitan area, the median price of a single family home rose slightly to $508,000.
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