A troubling report shows declines across the board in the Greater Toronto Area (GTA) housing market, as experts use words like “adjustment” to describe the sudden deflation of a bloated market in the face of historic inflation and higher borrowing costs.
The Toronto Regional Real Estate Board (TRREB) reports 5,038 sales in the region in September, marking a 44.1 per cent tailspin from the same period last year.
Listings were also down, but the decline was nowhere near as drastic, with a year-over-year drop of 16.7 per cent to 11,237. Still, this figure is the single-lowest number of new listings in any September since 2002, marking a 20-year low.
This has experts just as worried as the even greater drop in sales, with TRREB calling the slip “especially troublesome given that the stock of homes in the GTA increased markedly over the last 20 years.”
“We must ensure that the temporary dip in housing demand is not allowed to mask the critical shortage of homes available for sale in the GTA,” said TRREB President Kevin Crigger.
“Municipal council decisions have a direct impact on housing affordability, in terms of the protracted development approval processes, high development fees and other related policies that preclude timely housing development.”
And the general public appears to agree with TRREB. A recent poll conducted by Ipsos Public Affairs found 71 per cent of GTA regions residents believe that municipalities should focus their efforts on increasing the supply of homes for sale and rent.
TRREB CEO John DiMichele puts pressure on elected councils in GTA municipalities to “reconsider existing policies that preclude homeowners from listing their homes for sale, including significant added upfront costs like the land transfer tax.”
“Potential new policies like mandatory home energy audits could also create unnecessary interference and delays in the home selling process and dissuade some homeowners from listing their homes for sale.”
DiMichele argues that “If councils continue to support policies that restrict new home development and existing home listings, such as exclusionary zoning, housing affordability will be severely hampered over the long term, which will also hamper our region’s future growth.”
Despite massive increases in the cost of living in the region, home prices are probably among the few areas where prices are actually dropping, at least by some metrics.
The average price GTA-wide dropped by 4.3 per cent year-over-year to $1,086,762, though this figure represents an increase over August 2022 prices.
“Hovering just below $1.1 million, the average selling price may have found some support during the last couple months of summer,” said TRREB Chief Market Analyst Jason Mercer.
It now costs an average of $1,061,876 to buy a home in the 416, down from $1,090,422 during the same period last year. In the 905, prices dropped from $1,161,895 in Sept. 2021 to $1,099,938 in Sept. 2022.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
