It was business as usual for the month of October. GTA realtors sold 7,118 properties in October, a 26.7% decrease from last year. Sales were up by 11.6% over last month, indicating that buyers are beginning to get off the fence and into the market. The Toronto Real Estate Board President indicated that “Every year we generally see a jump in sales between September and October. However, this year that increase was more pronounced than usual compared to the previous ten years. So, while the number of transactions was still down relative to last year’s record pace, it certainly does appear that sales momentum is picking up.”
The Toronto Real Estate Board reported that 14,903 listings were added in October, a 11.8% increase over last year. The number of listings that are currently active increased by 78.5% when compared to 2016. The month over month comparison provides a deeper analysis of the status of the current market. New listings were down by 10% and active listings were also down by 1%. This decrease in listings is expected as buyers try to avoid closing dates in the colder months.
At $780,104, the average price for all home types in the GTA remains 2.3% higher than October 2016 and 0.6% higher than September 2017.
During the month of October, a property in the GTA took an average of 23 days to sell, while last month it took homes 24 days to sell. Properties in Markham took an average of 26 days to sell in October. While in Stouffville, properties were taking an average of 30 days to sell.
As October concluded, news broke that as of Jan. 1, 2018 the Office of the Superintendent of Financial Institutions (OSFI) will require home buyers who do not need mortgage insurance (those with down payments greater than 20% of the purchase price) to demonstrate they could still afford their mortgages if interest rates were two percentage points higher than the rate they are offered by their bank.
What Does This All Mean?
The housing market has been put through a rollercoaster of policy changes. First, in October 2016, the federal government implemented that all insured mortgage applications will go under the stress test. Then in April 2017, there was a Fair Housing Plan which included a 15% foreign buyers tax. All of this, coupled with 2 interest rate increases has led to turbulence in the marketplace and a movement toward a more normal market. Properties continue to receive downward pressure on price; however, they still remain above 2016 pricing.
We are finding that there seems to be a market, within a market. Meaning prices are increasing for lower-priced properties, for mid-range properties it is slightly more of a buyer’s market and for higher priced properties prices have stabilized and the market has become marginally more buyer focused.
The OSFI measures will definitely cause more turbulence in the marketplace as affordability may deteriorate. For those looking to purchase in the later part of 2017, now is the best time to buy as interest rates remain historically low and there are still homes at great values.