BALANCED MARKET RETURNING TO GTA

A total of 6,357 resale transactions were recorded in the GTA in August, down by 34.8% versus the 9,748 units sold in August 2016. This brought year-to-date (January thru August) sales to 67,357 units, down by 15.5% versus the record-setting pace of last year. That said, this year’s year-to-date volume is higher than any other past year with the exception of 2015 and 2016. Total active listings at month end were 16,419 units, representing the fourth consecutive month of near “normal” supply following the prolonged inventory shortage. A sharp increase in national GDP growth to 4.5% in the second quarter mirrors the strong economic conditions in the GTA. This fact, combined with decelerating price growth, will likely result in an improvement in demand as we enter the Fall market. In addition, the psychological impact of Ontario’s Fair Housing Plan will likely have waned by the Fall which will likely bring a more buyers off the sidelines and back into the market.

The average selling price in August was $732,292 – up by just 3.0% versus the $710,978 average price in August 2016. However, the MLS® HPI Composite Benchmark price was up by a sizeable 14.3% on a year-over-year basis in August. The large gap between these two figures is simply because the market share of the higher priced single-family detached home segment has fallen dramatically versus last year. The MLS® HPI Composite Benchmark price is a far better measure of the true rise in prices since it factors out changes in sales mix between different property types. That said, the Composite Benchmark has moderated substantially off its peak growth of 23.8% which was recorded in April. On a forward- looking basis, the market still appears to be returning to a more balanced situation with supply returning to normal levels and with the forecast that the recent pause in buyer activity will come to an end as the market heads into the Fall period.