We all took a little break from the hot Toronto market while home buyers benefitted from a better supplied situation in May 2017 in comparison to the same time last year. A number of properties available for sale, the active listings, were up by 42.9 per cent compared to the lowest level in 15 years recorded in May 2016. The number increased considerably for low-rise home types including detached and semi-detached houses and townhouses.
On the other hand, Toronto market was experiencing dropping sales - the Greater Toronto Area REALTORS® reported 10,196 sales, which is down by 20.3 per cent. As Toronto Real Estate Board President Larry Cerqua said:
Even with the robust increase in active listings, inventory levels remain low. At the end of May, we had less than two months of inventory. This is why we continued to see very strong annual rates of price growth, albeit lower than the peak growth rates earlier this year.
Drops in sales can have a direct link with the April’s Ontario Fair Housing Plan when government included a 15% tax on homes purchased by non-resident or foreign buyers. As the TREB’s Director of Market Analysis Jason Mercer said:
The actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen. In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out.
As for the selling prices, this situation continued to increase strongly in May compared to the same month in 2016, with the average selling price for all home types combined up by 14.9 per cent to $863,910. Year-over-year price increases were greater for condominium apartments compared to low-rise home types. Jason Mercer adds:
Increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we’ve experienced over the past year by listing their home for sale to take advantage of these equity gains.