Toronto Market Normalizes in September 2017
That appears to be what is happening now. Have a look at the numbers. Also, you might recall that the Toronto Real Estate Board would place its own media spin on the numbers. Now, they simply say they have released the numbers and the conclusions are up to you.
GTA REALTORS® Release September Stats
TORONTO, ONTARIO, October 4, 2017 –
Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 6,379 sales through TREB’s MLS® System in September 2017.
This result was down by 35 per cent compared to September 2016. The number of new listings entered into TREB’s MLS® System amounted to 16,469 in September – up by 9.4 per cent year-over-year.
“The improvement in listings in September compared to a year earlier suggests that home owners are anticipating an uptick in sales activity as we move through the fall. Consumer polling undertaken for TREB in the spring suggested that buying intentions over the next year remain strong. As we move through the fourth quarter we could see some buyers moving off the sidelines, taking advantage of a better-supplied marketplace,” said Mr. Syrianos.
The average selling price in September 2017 was $775,546 – up 2.6 per cent compared to September 2016. The MLS® Home Price Index (HPI) composite benchmark was up by 12.2 per cent on a year-over-year basis.
A key reason for the difference in annual growth rates between the average price and the MLS® HPI composite is the fact that detached homes – the most expensive market segment on average – accounted for a smaller share of overall transactions this year compared to last.
“With more balanced market conditions, the pace of year-over-year price growth was more moderate in September compared to a year ago. However, the exception was the condominium apartment market segment, where average and benchmark sales prices were up by more than 20 per cent compared to last year. Tighter market conditions for condominium apartments follows consumer polling results from the spring that pointed toward a shift to condos in terms of buyer intentions,” said Jason Mercer, TREB’s Director of Market Analysis.
Here are the average sale prices as reported by TREB for single family homes of all types in the GTA, including houses, townhouses and apartments:
$622,121 January 1st, 2016
$630,193 January 31st 2016
Over the calendar year 2016, the average price went from $622,121 to $730,124, that’s an increase of $108,003 or $17.36%. That was a lot. The usual increase was in the range of 6%, 7% or 8% annually.
$730,124 January 1st, 2017
$768,351 January 31st, 2017
The current price is $775,546. That’s close to the end of January number this year at $768,124, and the November 2016 figure, which happened to be the highest in 2016 at $777,091. Those numbers are all close.
Let’s start out at the beginning of 2016 and compare that to now. We went from $622,121 to $775,546, that was a $153,425 increase or 24.66% over 21 months, or 0.0117% per month which is 14.09% annually. So, that’s still high, but it’s more reasonable.
The traditional sequence over several decades is that the market starts off in January, increases in February, increases in March, increases in April and reaches a peak on the 1st, 15th or 31st of May, it then declines in June, declines in July and declines again in August, then it reverses itself in September with an increase, followed by an increase in October where it reaches a second peak for the year on Halloween, followed by a decrease in November and another decrease in December. Then, the cycle starts over again.
Last year there was an aberration. The peak of the 2016 market was November. That was an indicator of “pent up demand”.
This height of the market this year was in April. That was due to the fact that prices “got out of hand”. Now, we are reaching a more normalized market period.
The decline in June, July and August was predictable, as was the increase in September.
Brian Madigan LL.B., Broker