GTA home sales slide in July
Number of Transactions falls, but average selling price keeps on rising.
Home sales in the Toronto region slipped in July, down 1.5 per cent from a year earlier – but the slide seems minimal compared to Vancouver’s steep drop.
The Toronto Real Estate Board says 7,570 homes were sold in July in Greater Toronto, compared with 7,683 in July 2011, with a drop in condominium sales in Toronto being the most pronounced.
By contrast, the Real Estate Board of Greater Vancouver reported 2,098 properties sold in July, down 11.2 per cent from a month earlier, and down 18.4 per cent from July 2011.
Despite the drop in home sales in Toronto, the average selling price in July was $476,947 – up 4 per cent compared to the same month last year.
Jason Mercer, senior manager of market analysis for the Toronto Real Estate Board, said various factors are at play including a busy spring market, more houses up for sale this year as well as new government rules on mortgage lending that went into effect in July.
Finance Minister Jim Flaherty has tightened mortgage lending rules to slow the hot housing market, especially in Toronto, which some see as overheated due to low interest rates.
For insured mortgages, the maximum amortization period allowed is now 25 years, from 30 years, with a minimum 5-per-cent down payment – which means higher monthly payments.
“The new guidelines may have prompted some households to re-assess their situation from an affordability perspective,” said Mercer. “That may have caused some to step to the sidelines.”
Sales in the city of Toronto dropped to 2,721, down from 2,995 in July 2011, while in the 905 area, sales were 4,849, up from 4,688 in July 2011.
Condo sales in Toronto numbered 1,246 in July, down 13 per cent from same month last year, while in the 905 area they were down only 2 per cent with 507 sales.
Mercer noted sales were slower in the city of Toronto, which may be attributed in part to the city’s separate land transfer tax, which adds to upfront costs for homebuyers.
Also more homes on the market, which can affect price. “We are starting to see better supply,” he said. “And when there isn’t as much competition between buyers, you tend to see a little less upward pressure on price.”
Even though Vancouver’s real estate market reported the lowest levels of sales in July since 2000, Mercer cautioned that markets can behave differently. He added that Toronto still appears on track for the second best year in terms of sales.