Sales Drop, Inventory Rises: Will it be a Game Changer?
Resale home sales in the GTA showed a substantial year-over-year decline in May, while new and active listings soared and prices increased, albeit at a slower pace. Is it a turnaround in the making? Read on …
According to Toronto Real Estate Board’s (TREB) results, 10,196 homes were sold in May 2017 – a 20.3% drop over the same period last year. The decline affected all housing types across the GTA, from detached homes (down 26.3%) to condo apartments (down 6.4%).
This happened despite the greater number of properties available: Year-over-year new listings rose by 48.9% and active listings by 42.9%, with low-rise home types benefitting most from the increased inventory.
Average prices followed the downward trend set in April 2017: Rising, but by less. The average price across the GTA in May increased by only 14.9% to $863,910; this compares to year-over-year increases of 24.5% in April and 33.2% in March.
It was double-digit price increases across the board – from 27.7% and 29% for condos in 416 and 905 respectively, to 16.6% for detached homes in Toronto (to $1,503,868) and 15% in 905 (to $1,025,893.)
As TREB suggests, it’s too early to attribute the downturn to provincial legislation designed to cool the market; May’s sales decline may be a blip.
Much depends on buyer/seller interaction: Neither sellers nor buyers are used to rising prices and high inventory levels. It just may be a game-changer.
Condo Inventory Shrinks; Isn’t Now the Time to List?
Just as the inventory of low-rise homes increases, the number of condo apartments available is shrinking.
According to May results released by the Toronto Real Estate Board (TREB), both new and active listings have increased while sales of all home types are dropping. Overall, new listings rose by 48.9% and active listings increased by 42.9%, but the main beneficiaries of this listing increase were detached and semi-detached properties, and townhomes. As TREB says: “Active listings for condominium apartments were down compared to May 2016.”
Meanwhile, sales of all home types declined 20.3% to 10,196, compared to 12,790 for the same period in 2016. Condo sales in the 905 area were down by 11.1% (to 816) and in Toronto by 4.3% (to 2,038); in comparison, detached home sales dropped by 26.1% to 1,146 in 416, and 26.4% to 3,611 in 905.
The pace of price increases is also slowing: For example, in April 2017, the average selling price for all home types increased by 24.5% to $920,791 and in March 2017, by 33.2% to $916,567. In May, the increase was 14.9% to $863,910.
Condo prices led the pack, posting May price increases of 27.7% (to $564,808) in 416 and 29% (to $448,867) in 905.
TREB notes it’s too early to have seen the impact of provincial government market-cooling initiatives. However hesitant condo owners may do well to list now; a turnaround may be in the offing.
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