2017 - Sales are Up and Prices are Up
The Toronto Real Estate Board had reported on the December results, and the year end. Here is the report:
Record Sales in 2016 TORONTO, ONTARIO, January 5, 2017 – Toronto Real Estate Board President Larry Cerqua announced that 2016 was a second consecutive record year for home sales.
Greater Toronto Area REALTORS® reported 113,133 home sales through TREB’s MLS® System – up by 11.8 per cent compared to 2015.
The calendar year 2016 result included 5,338 sales in December – an annual increase of 8.6 per cent. The strongest annual rate of sales growth in 2016 was experienced for condominium apartments followed by detached homes.
“A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the GTA, as the region’s population continued to grow in 2016,” said Mr. Cerqua.
The annual rate of growth for the MLS® Home Price Index (HPI) in the TREB market area accelerated throughout 2016 – from 10.7 per cent in January 2016 to 21 per cent in December 2016.
The overall average selling price for calendar year 2016 was $729,922 – up 17.3 per cent compared to 2015. The pace of the annual rate of growth for the average selling price also picked up throughout the year, including a climb of 20 per cent in December.
“Price growth accelerated throughout 2016 as the supply of listings remained very constrained. Active listings at the end of December were at their lowest point in a decade-and-a-half.
Total new listings for 2016 were down by almost four per cent. In 2016, we saw policy changes and policy debates pointed at the demand side of the market.
If we want to see a sustained moderation in the pace of price growth, what we really need is more policy focus on issues impacting the lack of homes available for sale,”
said Jason Mercer, TREB’s Director of Market Analysis.
The average purchase prices for a single family home in the Greater Toronto Area, which includes condominiums, co-operatives, townhouses, semi-detached and detached, throughout 2016 were as follows:
You will see that the highest prices were achieved in November. That’s unusual. Most of the time, November is a “down month”. However, you will see that December was indeed a down month, with the average price dropping by $46,709 to $730,472.
The final number for December 2015 was $608,714. That is also the starting point for 2016, since the January number reflects the end of January and not the beginning.
Let’s do some calculations. How did the market do?
Year over Year
This is end of December 2015 to end of December 2016. The market rose from $608,714 to $730,472. That’s a 20.00% increase.
Calendar Year 2016
This is the beginning of January 2016 to end of December 2016. The market rose from $608,714 to $730,472. That’s a 20.00% increase. Naturally, it’s the same as the “year over year” because we are using the same numbers.
This Month Only
This is the end of November 2016 to the end of December 2016. The market dropped from $777,181 to $730,472. That’s a decrease of $46,709 or 6.01% decline.
The Rollback to Previous Levels
Now that the year ends with $730,472 being the representative number for the value of housing in the GTA, and that’s actually “off the peak” to which month does it favourably compare? If you look at the numbers, and here you will have to guess, the end of the year looks the same as perhaps mid-April. So, that means that the results of any increases throughout the year have been rolled back to the mid-April numbers.
The Last Six Months
This is the beginning of July 2016 to end of December 2016. That would measure six full months or the last half of the year. The July number reflects the end of July, so we have to use the June number, which was $746,961. We have a decrease of $16,489 which is a percentage decline of 2.20%.
In terms of the market, it went well for the year, but not the last six months or the last month. Depending upon what particular spin you may happen to choose that suits you, several different types of headlines may gather some interest:
GTA Market Prices Up 20% in 2016
GTA Market Prices Decline 2.2% in Last Six Months
GTA Market Prices Drop $46,709 in One Month
GTA Market Drops to Mid-April 2016 Levels
All of these headlines are supported by statistics.
Brian Madigan LL.B., Broker