Toronto Market Steady in August 2016
That was my “headline”. I didn’t like the TREB headline below. I was also thinking of saying:
Average Toronto House Price Escalates $2.35 per day in August 2016”.
The Toronto Real Estate Board has just released its statistics for August 2016.
Here is their report:
Strong Sales & Price Growth in August
TORONTO, ONTARIO, September 7, 2016 – Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS® reported a record 9,813 sales through TREB’s MLS® System in August 2016.
While this sales result was 23.5 per cent above the number of transactions reported for August 2015, it is important to note that the majority of sales are reported on working days and there were two additional working days in August 2016 compared to 2015.
When the year-over-year discrepancy in working days is accounted for, the annual percentage change in sales is closer to 13 per cent. “The conditions underlying strong demand for ownership housing remained in place, including a relatively strong regional economy, growth in average earnings and low borrowing costs. Unfortunately, we did not see any relief on the listings front, with the number of new listings down compared to last year. This situation continued to underpin very strong home price growth, irrespective of home type or area,” said Mr. Cerqua.
The MLS® Home Price Index (HPI) Composite Benchmark for August 2016 was up by 17.2 per cent on a year-over-year basis. Similarly, the average selling price for all home types combined was up by 17.7 per cent on an annual basis to $710,410. Both the MLS® HPI benchmarks and average prices for low-rise home types were up by double digits percentage-wise.
“Population in the GTA continues to grow. The resulting growth in households coupled with favourable economic conditions and low borrowing costs means that we remain on track for another record year for home sales. Against this backdrop, TREB will also be releasing new third-party research, and consumer and REALTOR® survey results throughout the fall and winter, with discussions focusing on foreign buying activity and issues affecting the supply of ownership housing,” said Jason Mercer, TREB’s Director of Market Analysis.
You have to remember that TREB does a year over year comparison. Generally, that makes everything look good, no matter what is happening.
The headline says “Strong Sales and Price Growth in August”.
When it comes to sales, there were more than August 2015. Actually, there was a significant increase from 7,943 to 9,813, that’s 23.5%.
However, the volume is down from July, which was 9,961. So which month is the proper comparison: a year ago or last month. The current trend in terms of momentum would be the July figure.
The current price for a single family home in the GTA is $710,410, that’s $73 more than in July. So, that means that the average homeowner made $2.35 per day over the month.
If you look at the year over year comparison, in August 2015 the average price was $603,534, so that means that we have a $106,876 increase. That’s significant, and that’s sizeable, and that comes down to $292.81 per day over the trailing 12 months.
However, when was the height of the market? If you are only looking at the monthly numbers, it would be May where the average price was $752,381. So we have a $41,971 decline, or $461.22 loss per day.
Statistics Can be Fun
It is interesting that you can look at the same statistics from the same source and draw a number of different conclusions.
It’s important to be careful and it’s important to have all the numbers available so that you can see the big picture.
The Headines are always fun. It’s easy to have them shed a little truth and gave the totally wrong impression at the same time.
Brian Madigan LL.B., Broker