Strong and Robust September 2016 for GTA Market
The Toronto market continues to be active. This is the September MarketWatch report:
"Sales Growth Continues in September
October 5, 2016 – Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 9,902 sales through TREB’s MLS® System in September 2016.
This result was up by 21.5 per cent compared to September 2015. For the region as a whole, strong annual rates of sales growth were experienced for all major home types. The pace of detached sales growth was slower in the City of Toronto and the number of semi-detached sales was down compared to last year. In both cases, the year-over-year dip in new listings was likely the issue.
“We continued to see strong demand for ownership housing up against a short supply of listings in the Greater Toronto Area in September. The sustained lack of inventory in many neighbourhoods across the GTA continued to underpin high rates of price growth for all home types,” said Mr. Cerqua.
Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up strongly on a year-over-year basis in September.
The MLS® HPI Composite Benchmark grew by 18 per cent compared to September 2015. The average selling price was up by 20.4 per cent to $755,755. It is important to remember that the MLS® HPI provides a price growth measure for a benchmark home, thereby allowing for an apples-to-apples comparison from one year to the next. The average selling price can be influenced by changes in both market conditions and the mix of homes sold.
“The Toronto Real Estate Board will be closely monitoring how the recent changes to Federal mortgage lending guidelines and capital gains tax exemption rules impact the housing market in the Greater Toronto Area.
While these changes are pointed at the demand for ownership housing, it is important to note that much of the upward pressure on home prices in the GTA has been based on the declining inventory of homes available for sale,” said Jason Mercer, TREB’s Director of Market Analysis."
Here are the average sales prices for single family homes in the GTA. This includes all types, detached, semis, townhouses, and condominium apartments:
The usual pattern is as follows: the market starts off in January, increases in February, increases in March, increases in April, reaches a peak in May (the 1st, 15th or 31st), declines in June, declines in July, declines in August, resumes an upward trend in September, peaks for the second time in October (31st), declines in November and declines once again in December. Then, the cycle starts all over again in the New Year.
Assuming the high point in May to represent 100%, the dip in August will be about 7%, bringing the August number in at 93% of the peak. The October peak will be about 99% of the May number. That’s in a normal year.
December 2015 $608,753
2015 Average $622,123
September 2015 $627,867
You can always manipulate the performance numbers somewhat. So, let’s do some calculations. The December 2015 number is really the same number as the starting point for the year, that is, I January 2016.
The 2015 average is often selected as an appropriate “year-end” number since it is the average of all 12 months.
The September 2015 number is used frequently since it is a “year over year” comparison, or the trailing 12 months.
What we do know is that the final number that we are working with is $755,755, since that was the final number for 30 September 2016.
Here’s the comparative performance, using:
Date Increase % % monthly
1 January 2016 start: $147,002 19.5 2.2
2015 Average: $133,632 17.7 2.0
September 2015: $127,888 16.9 1.4
You will notice from the TREB report that there is a Home Price Index, which is similar to an index of indexes. The year-over-year increase there was 20.4%.
It’s interesting to see that depending upon what you want to say, you can select the starting point which will be the most helpful to express your point.
No matter what, this market in the GTA has demonstrated significant price growth. And, if we have May at 100%, then September is already 100.46%.
The usual second peak in the year on the 31st of October may see another record.
It is noteworthy that there are some mortgage qualification changes coming into force on 17 October. So, we might see an impact from those changes.
Brian Madigan LL.B., Broker