Tuesday, August 7, 2012

July Market Watch - Sales Down, but Market is Still Strong

GTA Home Prices Up in July
TORONTO, August 3, 2012 –

Greater Toronto REALTORS® reported 7,570 sales in July 2012, representing a decline of 1.5 per cent compared to 7,683 sales reported in July 2011. The decline was most pronounced in the condominium apartment segment in the City of Toronto. Total sales in the rest of the Greater Toronto Area (GTA) were up compared to the same period last year.

“Very strong annual sales growth in the first half of 2012 and an earlier peak in sales this spring compared to 2011 help explain more moderate sales this summer. New mortgage lending guidelines and the additional upfront cost of the City of Toronto land transfer tax also prompted some households to put their buying decision on hold,” said Toronto Real Estate Board (TREB) President Ann Hannah.

The average selling price in July 2012 was $476,947 – up by four per cent compared to July 2011. The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples comparison of benchmark home prices from one year to the next, was up by 7.1 per cent year-over-year.

Jonathan’s Opinion

Based on this month’s data, rumors are already spreading that the Toronto and surrounding area’s real estate market is reaching its peak, and is due for a correction. While it is true that we may be due for a correction, I can assure you that the time is not now.

Although this is the second consecutive month that sales have been lower than the same
month of 2011, it doesn’t mean that a correction is here. We have had a hotter than expected summer, and a lot of people are away on vacation. Most people have put their buying and selling on hold. Once the fall season arrives, you’ll see sales increase again.