TORONTO, October 3, 2012 –
Greater Toronto Area (GTA) REALTORS® reported 5,879 transactions through the TorontoMLS system in September 2012. The average selling price for these transactions was $503,662, representing an increase of more than 8.5 per cent compared to last year.
The number of transactions was down by 21 per cent in comparison to September 2011. However, it is important to note that there were two fewer working days in September 2012 compared to September 2011. The majority of transactions are entered on working days. On a per working day basis, sales were down by 12.5 per cent year-over-year.
“While sales have been lower due to stricter mortgage lending guidelines, we continue to see substantial competition between buyers. The months of inventory trend remains low from a historic perspective, which explains the strong price increases we are experiencing,” said Toronto Real Estate Board (TREB) President Ann Hannah.
September average selling prices were up compared to last year for all major home types. Price growth was strongest in the City of Toronto, including for condominium apartments with eight per cent year-over-year growth. All benchmark home types included in the MLS® Home Price Index (MLS® HPI) experienced year-over-year price increases, with substantially stronger increases for low-rise home types.
“Barring a major change to the consensus economic outlook, home price growth is expected to continue through 2013. Based on inventory levels, price growth will be strongest for low-rise home types, including single-detached and semi-detached houses and town homes,” said TREB’s Senior Manager of Market Analysis, Jason Mercer.
Jonathan's Opinion
These numbers indicate that the market is cooling off, and I believe that it is…what I mean by this is that the market is not “crashing” or “correcting”, it is “normalizing” (which is healthy for the economy)…there are still too many buyers (demand) out there for a crash to occur. What is happening is that homes are not selling overnight and for ridiculous amounts over list price anymore (although some still are). Financial institutions are becoming stricter in giving out mortgages, and qualifying is becoming more difficult. These numbers will be consistent throughout the winter. One thing to look out for is the continuation of these numbers even next spring…if that happens, then we may have a problem. I believe that we will have another robust spring come 2013.
