To keep our clients better informed of the Toronto market, we're initiating this weekly instalment on our blog. The CP Weekly Meeting Highlights will summarize the most salient information from our weekly office meetings, headed by Real Estate veteran, lawyer and all around good guy, Chestnut Park's Broker of Record Chris Kapches. We are doing this as we feel that the media is giving a very one-sided perspective of market activity and seems to focus on the GTA statistics rather than Toronto specifically.
Though this topic wasn't addressed at this week's meeting, it has been a central theme to discussions of market activity over the summer months. Measures taken by the government, coupled with already inflated prices, an over-abundance of inventory and negative news in the media have all combined to give us the market we're currently in. Buyers felt the market had further room to decline, while many sellers felt they should still be getting the prices we were experiencing up to mid-April; when prices were at their peak. Today, the media continued this trend as it posted declines of 40% in "Toronto" despite these numbers reflecting price declines throughout the entire GTA, which, includes areas like Richmond Hill and Mississauga. This lack of specificity has led many to believe similar declines have been experienced in the City of Toronto proper, when in fact, this just isn't the case. As an example, in July inventory levels were sighted as increasing by 30-40% when in fact the numbers in the City of Toronto were closer to 2%. Whether these skewed stats will continue to contribute to an already confounded public remains to be seen.
Increases in Sales for August
As our meeting was held yesterday and full numbers were not yet published, Chris was looking at the market based on stats from August up to that point. Now having the official numbers for the month, we've seen a small increase in the number of sales through the month of August; . However, it appears as though we will continue to see a negative variance in sales prices and numbers for the month of August b/w 35 - 38% in the GTA. One thing that seems certain however is that the market appears to have stabilized from the large dip starting in June. The average sale across all housing types in the GTA, price came in at $732,292, which is actually a rise of 3% over August 2016, but a decline from July's average of $746,033.
Despite this plateau in price declines, we will continue to see negative variances throughout the next 12 months, simply because stats for declines are done year over year. If we can see a move to an annualized appreciation in values to the 5-7% mark, the market could be considered as being strong and healthy.
Annualized Growth Rate
Chris has some added concerns regarding Canada's annualized rate of expansion (based on the last quarter) coming in at 4.5%, making Canada the fastest growing economy in the G7. How this impacts interest rates going forward is the big question, and how that rate hike will impact the housing market; the expectation would be a rate of 3.5%. This could effectively eliminate buyers at the low-end of the housing spectrum. Compounding that problem is that the most affordable housing product for that population is condominium apartments; a product that already has very little in terms of inventory. The increase is likely to come out in late October as opposed to this week.
Too Soon To Tell
We will have a clearer picture of the market once numbers for September come in. From the response in the office, we are likely to see an increase in inventory in the Toronto (read 416) area over the month.
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