Toronto Real Estate Market Down Again in August 2014
You will recall that I have been writing about the falling Toronto real estate market for several months. Well, it’s down again in August. But, you really wouldn’t know it from reading the report from the Toronto Real Estate Board.
Let’s have a look at what they said:
Annual Growth in Home Sales Continued in August
TORONTO, September 4, 2014 – Toronto Real Estate Board President Paul Etherington reported 7,600 sales through the TorontoMLS system in August 2014. This result was up by 2.8 per cent compared to 7,391 transactions reported in August 2013. Year-to-date sales through the end of August amounted to 65,454, which represented an increase of 6.5 per cent compared to the same period in 2013.
“The last full month of summer ended on a high note. As we look toward the fall market, I expect that demand for ownership housing will remain strong. Home buyers will continue to benefit from a diversity of affordable home ownership opportunities throughout the GTA. The fact that sales were up for all major home types in August suggests that first-time buyers and existing home owners remain very active in today’s marketplace,” said Mr. Etherington.
The average selling price in August 2014 was $546,303 – up 8.9 per cent in comparison to the average of $501,677 reported in August 2013. The year-to-date average price through August was $562,504, which represented an increase of 8.5 per cent in comparison to the same period in 2013.
“The number of listings in August was down in comparison to last year, while the number of sales increased. This means that sellers’ market conditions remained in place with a lot of competition between buyers. This is why we continued to see strong price growth last month. Looking forward, if sales growth continues to outstrip listings growth, the average selling price should continue to increase on a year-over-year basis,” said Jason Mercer, TREB’s Director of Market Analysis.
All in all, that’s seems like a pretty good report. However, just for the sake of our own “due diligence” let’s dig a little deeper and see what the numbers were on page 27 of that report:
So, let me get this right. The Toronto Real Estate Board is happy because the average price is up 8.9% compared with August 2013. Why don’t we go back 10 years and compare it to August 2004. That should make TREB delirious!
At the same time, the actual trend is DOWN. The average price is less than it was in February. The market peaked in May this year, to be entirely accurate 15 May 2014 was the height of the market where the average sale price was $590,132. So, that is a $43,829 rollback, measured as a 0.742% decline.
Naturally, we could have headlines that said:
Toronto Market Drops 7.4%
Toronto Prices Roll Back to February Levels
Average Home Loses $43,829
They would all be accurate, but not very much fun to read.
So, here’s the good news! The market is on its way UP. It’s September and prices and volumes will increase. Why do I say that? Because, that’s the way it is. Happened 9 years out of the last 10, so why not this year?
My view is that you should have all the relevant information in front of you, and you can judge for yourself. You don’t need my “spin” or anyone else’s for that matter. Let’s keep all the relevant facts in front of us.
Thus, don’t worry, be happy, the Toronto real estate market is in a long term upward trend. It was just a little shaky over the last few months, as it always is.
Brian Madigan LL.B., Broker