It appears that home buying activity in the GTA is ramping up for a strong December if the November results are any indication. The Toronto Real Estate Board reported 7,374 transactions through TREB’s MLS system in November, bucking the regular seasonal trend which usually sees transactions slow in the last couple of months of the year.
It’s possible that the changes to mortgage lending guidelines, which come into effect in January (the “stress test”), have prompted some households to speed up their home buying decisions before their home choices become more limited as affordability will drop when the new rules are applied.
TREB reported that there were 18,197 active listings across the Greater Toronto Area (“GTA”) in the month of November, an increase of over 110% compared to the same month in 2016 and inventory remained stable at roughly 2 ½ month’s supply.
What is more interesting, however, is what happened on a micro level. In the City of Toronto, for instance, there were 2,978 reported transactions, representing 40% of the GTA total, but with only 5,430 active listings, available inventory was much lower than the GTA average, at 1.8 months. Another interesting statistic is that detached homes represented almost 60% of the active listings in November, meaning that there is a much greater supply at the higher end of the price range, where inventory stood at almost 3 ½ month’s supply, or an additional 1 month above the GTA average.
Demand continued to be strongest at the lower end where inventories of the more affordable home types were 1.8 months for semi-detached homes, and 1.6 months for condominiums.
The average selling price in the month of November for all homes types combined was $761,757 - down by 2 per cent compared to the month of November, 2016, due in part to a smaller share of detached home sales versus last year. On a year to date basis, however, the average selling price was up by 13.4 per cent compared to the same period last year, with high density home types (i.e. condo townhouses and apartments) leading the way in terms of price growth.
My predictions? Look for a more active than usual December month as buyers continue to speed up their home buying decisions to “avoid the stress” that will be caused by the new mortgage lending qualification rules and the likelihood of further interest rate hikes in 2018. The first 90 days of 2018 will probably lead to a slowdown in transactions as buyers navigate the new regulatory landscape and inventories will likely edge up to slightly more than 3 month’s supply on average for the next few months.
Wishing you happiness, good health and prosperity in the New Year!
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