Sales down 40% in July

To anyone who follows Toronto’s real estate market, it will come as no surprise that sales transactions are down when tracked over the comparable month of July’s sales last year. Down by a whopping 40% on the other hand, can lead one to wonder if Toronto’s sizzling hot real estate market is starting to crumble!

5921 reported sales at first glance for a month that traditionally throughout the year is one that falls towards the lower side in sales activity, isn’t eyebrow raising in itself. But it led me to scour through the archives to research that the last time the hard working members of the Toronto Real Estate Board posted less sales in July was in the year 2002. Fifteen years ago! Even in the recession summer of 2010 sales transactions were 9% higher than 2017’s numbers!

Okay, so what could this mean?

In February, March and early April of 2017 Toronto’s market defied logic to most. It’s well known that it triggered multiple policy changes amongst governments, regulators such as OFSI – The Office of the Superintendent of Financial institutions (¬†OFSI)
and even our beloved City of Toronto chimed in by increasing the Land Transfer Tax collected on our hard working citizens. After all, I mean you must be filthy rich to be able to purchase real estate in Toronto right?! Sucka!!

Most of the changes came with good intentions (not Toronto’s, sorry) to help balance a very hot real estate market. Have they achieved this? It’s still too early to tell, but a closer look reveals something that was mostly overlooked in the mainstream media, but played out through social media amongst those in support of, which I am, which is attacking the supply side of the issue (create more housing) and not the demand (buyers) side alone.

Back to July’s numbers. Most of the price appreciation in the early part of the year recorded in the 905 regions (they count in TREB’s numbers) has been given back with detached homes trading at 2.4% higher than July 2016. In Toronto, they are 8.5% higher. Looking back since March where it peaked in the 905 (April for Toronto) prices are trading 33% lower year-over-year. Almost the entire gain has been wiped out.

Still, I’m not sure I’m convinced?

Well, over the past ten days or so, there has been a notable uptick in viewings in not only my properties listed for sale, but those of other agents whom I’m in contact with. The demand side is still there, albeit buyers are slightly frozen on what they should do. They feel in their gut it’s a good time to buy now; and it really is, assuming your reasoning for buying in the first place is a sound one. Maybe motivated by talks of more interest rate hikes, or the stress test for all mortgage holders to qualify against, or maybe even because right now you can even pick up a property without major competition or even none at all! Whatever the reason, people are out looking.

The demand is there, the supply side hasn’t been adequately addressed (and no, I don’t mean let’s build more condos everywhere) and something I didn’t even touch on, is that we have a strong local economy happening around us. This all points to stability on the housing front and now that the madness of the FMA (February, March and April) is behind us, go find and purchase your next home and get back to experiencing the true joy of what owning a property long term brings.



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