Greater Toronto Area REALTORS® reported 5,025 homes sold in February 2019, with the number being down by 2.4 per cent on a year-over-year basis. Sales were also down compared to January this year, following preliminary seasonal adjustment. As Toronto Real Estate Board President, Garry Bhaura, explains:
The OSFI mandated mortgage stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy. The stress test should be reviewed and consideration should be given to bringing back 30 year amortizations for federally insured mortgages. There is a federal budget and election on the horizon. It will be interesting to see what policy measures are announced to help with home ownership affordability.
Despite sales being down year-over-year, new listings actually declined by a greater annual rate. This suggests that market conditions became tighter compared to last year. Tighter market conditions also continued to support year-over-year average price growth, with the average selling price up by 1.6 per cent on a year-over-year basis in February 2019. This price growth was driven mostly by the condominium apartment segment and higher density low-rise home types. On a preliminary seasonally adjusted basis the average selling price was down compared to January 2019. Jason Mercer, TREB’s Director of Market Analysis and Service Channels, adds:
Home sales reported through TREB’s MLS® System have a substantial impact on the Canadian economy. A study conducted by Altus for TREB found that, on average, each home sale reported through TREB resulted in $68,000 in spin-off expenditures accruing to the economy. With sales substantially lower than the 2016 record peak over the last two years, we have experienced a hit to the economy in the billions of dollars, in the GTA alone. This hit has also translated into lower government revenues and, if sustained, could impact the employment picture as well.