A total of 5,921 resale transactions were recorded in the GTA in July, down by 40.4% versus the 9,929 units sold in July 2016. At the same time, total active listings by month end were 18,751 units, representing the third consecutive month of close to “normal” supply following a prolonged period of acute inventory shortage. A recent release from the Ontario government confirmed the TREB’s own research which found that foreign buyers represent a small proportion of buying activity in the GTA. Clearly, the year-over-year decline experienced in July had more to do with psychology, with an abundance of would-be home buyers on the sidelines waiting to see how market conditions evolve. In addition, summer market statistics are generally not the best indicators of housing market conditions due to its low seasonal importance. The approaching fall market will provide a better indicator of the true impacts of the Ontario Fair Housing Plan and rising borrowing costs.
Annual growth rates for MLS® HPI Benchmark prices have moderated over the past few months, but remain strong. The MLS® HPI Composite Benchmark price was up by a substantial 18.0% versus July 2016. July’s average selling price for all home types in the GTA was $746,218 – representing only a 5.0% increase as compared to July 2016. The discrepancy between these two figures is due to the fact that the market share of the higher priced detached homes segment has fallen versus last year. The MLS® HPI Composite Benchmark price is a far better indicator of the true rise in prices since it factors out changes in sales mix between different property types. That said, the Composite Benchmark was down by 4.6% versus June, indicating that the market has moved off its peak which was actually established in April. Looking forward, the market appears to be headed back to a more balanced situation, with the expectation that the recent buyer pause will be short-lived.