Healthy Fall Market Continues in November
Toronto, December 9, 2011
Greater Toronto REALTORS® reported 7,092 residential transactions through the TorontoMLS® system in November – up 11 per cent in comparison to November 2010. At the same time, the number of new listings was up by 14 per cent in comparison to last year.
“We have seen strong annual sales growth through the 2011 fall market. The increase in transactions has been broad-based, with strong growth across low-rise and high-rise home types throughout the Greater Toronto Area,” said Toronto Real Estate Board (TREB) President Richard Silver. “The market has also become better supplied, with
annual new listings growth outstripping that of sales. As this trend continues into 2012, we will see more balanced market conditions.”
The average price for November transactions was $480,421, representing an increase of almost 10 per cent in comparison to $437,494 in November 2010. “Despite strong price growth this year, the housing market remains affordable in the GTA,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The correct method of assessing affordability is to consider the share of the average household’s income that is dedicated to mortgage principal and interest, property taxes and utilities. Currently, this share remains in line with generally accepted lending guidelines. Given this positive affordability picture, average price growth is forecast to continue in 2012, albeit at a more moderate pace.”
Jonathan’s Opinion
Prices have increased by 9.8% this same period last year. Notice, however, that listings have also increased. This shows that there are more people selling this year than last year. However the sales have also increased year over year, which means that although there are more people selling this year, there is still a lot of demand, and more people buying. As long as this is the case, prices will continue to rise. However, prices will not rise as fast and as sharply if listings (houses available on the market) continue increasing.
This is one sign that the market may be reaching equilibrium (same amount of buyers as sellers). The Bank of Canada has announced that interest rates will remain low for at least of all 2012. As long as interest rates stay low, it will take a much longer time to reach equilibrium because there will always be more buyers than sellers. To reach price stability, we must reach equilibrium between supply and demand (sellers and buyers).
