The province of Ontario drew a fair amount of criticism when it unveiled 16 measures to cool Toronto’s housing market in April – but it appears the Fair Housing Plan is having its intended effect, as August home price growth chilled to more management levels.
The average selling price in the Greater Toronto Area came in at $732,292 last month reports the Toronto Real Estate Board, a 3 per cent increase from August of 2016, and a drastic moderation from double digit appreciation experienced in the peak spring market. Overall, sales fell 34.8 per cent across the region, with 6,357 homes changing hands.
Tamer activity is good news for buyers, says TREB Director of Market Analysis Jason Mercer, as the “relationship between sales and listings in the marketplace today suggests a balanced market.”
House Prices See Double Digit Drop
The data suggests fewer higher priced homes are changing hands, as the MLS Home Price Index composite benchmark rose 14.3 per cent, outstripping that of average price growth. Detached sales have fallen 41.6 per cent across the GTA from last year and the average house price has dipped below a million dollars to $968,494, which slightly improves affordability for those who aspire to own one.
In fact, detached prices are down by double digit percentages across the majority of TREB regions compared to April 2017, meaning September could be the opportunity sidelined buyers have been waiting for.
Greater Toronto Area Detached House Prices
Cities Where Prices Have Dropped By Over 20% Since April 2017:
- Whitchurch-Stouffville, $1,024,941, -26%
- Newmarket, $901,005, -24%
- Toronto West, $919,916, -23%
- Aurora, $1,144,094, -23%
- Markham, $1,319,860, -23
- Richmond Hill, $1,466,884, -22%
- Oshawa, $523,943, -22%
- Clarington, $550,677, -21%
Cities Where Prices Have Dropped Between 15% to 20% Since April 2017:
- Pickering, $812643, -20%
- Toronto East, $887,620, -17%
- Toronto Central, $2,113,130, -15%
- Brampton, $766,831, -15%
- Georgina, $604,838, -15%
- Ajax, $708,185, -15%
- Whitby, $733,811, -15%
Cities Where Prices Have Dropped Between 10% to 15% Since April 2017:
- Vaughan, $1,348,649, -14%
- Mississauga, $1,066,015, -14%
- Oakville, $,1314,363, -13%
- Uxbridge, $792,233, -12%
Milton, $866,650, -11%
- E. Gwillimbury, $966,047, -10%
However, the average house is still financially out of reach for many; this is evident by the popularity of lower-priced home types. Condos, townhomes and semi-detached houses remain in rampant demand, and are the main drivers behind August’s price growth.
The average GTA condo rose 21.4 per cent to $507,841, while townhomes are now 8.9-per-cent pricier, at $605,618. Semi-detached prices rose 12.1 per cent to $715,167.
Optimism for Autumn
That prices and sales dropped so dramatically following the province’s measures has caused deep unease in the market, as analysts made theories of a (finally) burst bubble and impending market crash. Whether buyers would return in force in September would mean the difference between a balanced market and a busted one – and it appears they’ll arrive in droves, suggests TREB President Tim Syrianos.
“Recent reports suggest that economic conditions remain strong in the GTA. Positive economic news coupled with the slower pace of growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular season bump, as we move through the fall,” he says.
A Back-to-School Buyer Boom?
However, sellers have been effectively startled, as shown by August’s 6.7-per-cent decline in listings – only 11,523 homes were listed for sale last month, the fewest since 2010. Mercer warns this tighter supply, coupled with September’s anticipated demand, could easily tip the scales back to a buyer frenzy.
“If current conditions are sustained over the coming months, we could expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels,” he says.