The Toronto Real Estate Board( TREB) reported that the average cost of a home in August — $732,292 (including all residence types and condos) — was still up 3 per cent or about $20,000 to August 2016.
But that is still down about 20 per cent, or $187,000 lower than April, 2017, when the average cost peaked at $919,086.
The number of housing sales in August, 2017 likewise fell, 34.8 per cent year over year.
Mr. Doug Porter, manager economist at BMO Financial Group, who was among the first to use the term “bubble” to describe Toronto’s soaring house rates in March, 2017, says the numbers are actually good report for buyers who expect to live in their homes for years.
“There are indications in these numbers — even when they search weak on the surface — that things are starting to stabilize,” he said.
“Solid economic underpinnings,” which prompted the Bank of Canada to hike interest rates a one-quarter percentage, will eventually shine through in the dwelling market, said Porter.
The increase in the overnight lending rate to one per cent, the second largest rise this summer, will affect some of the very short-term mortgage rates but won’t make a big difference to the housing sell immediately, he said.
Rates will slowly but surely climb, said here economist.
Meantime, the market is finding its equilibrium, said Porter, in accordance with the “sudden shock” in April, 2017 of the Ontario government’s Fair Housing Plan, which included a foreign purchasers levy among a series of market cooling measures.
A 6.7 per cent year-over-year drop in new listings — the lowest level for August, 2017 since 2010 — could, nonetheless, lead to accelerated price growth, said Jason Mercer, TREB director of market analysis.
“As we start to see an uptick in sales, or at least a slower rate of decline, and new listings remain down on a year-over-year basis, we could actually start to see a stiffening in the market ,” he said.
“The plunge in demand has kind of disguised the fact that we still do have a supply problem in the Greater Toronto Area,” said Mercer.
While the price of detached homes in the region remained virtually unchanged this August, 2017 compared to last, the average condo price increased about 20 per cent.
TREB consumer polling shows a shift in the type of residences people said they’re intended to buy, toward denser housing shapes such as town house and condos, and away from pricier detached house, he said.
The real estate market has the benefit of a strong economic footing with strong GDP growth, low interest rates and low unemployment.
But the Toronto region remains a series of smaller markets that are coming back into balance at differing rates, said Mr. Forbes, realtor.
In King, where the average rate of a home is about $1.5 million, he said,” it’s truly a buyer’s market .”
” There’s one home selling for every eight enumerates in that area. But in the City of Toronto, you’ve got a one for two — so every sale there’s just two enumerates on the market. That’s a seller’s marketplace ,” he said.
Durham, Peel and Halton fields are still seller’s sells, said Forbes.
Seeing prices are close to what they were a year ago is reinstating purchaser confidence. At the same time, he said, “Properties, if they’re priced properly are selling in two to three weeks — that 20- to 25 -day interval.”
Meantime, there seems to be a return to a traditional seasonal market, said Mr. Zigelstein, realtor.
Toronto Home prices declined less than 2 per cent in August, 2017 from July, 2017, said Zigelsteinm.
“Traditionally, summertime is a slower time and I think we saw that this year in 2017. It’s very normal to go back to that seasonal marketplace that we haven’t seen in a few years because the market has been so hot for so long ,” he said. “This just takes you back to an almost normal market precondition.”
“In a summertime season where they’ve heightened rates that’s a very good amount to be at,” he said. “It means everything is not dropping as much as everybody thinks it is.”
Premier Kathleen Wynne said her Liberal government will continue to monitor the effects of the housing plan.
“We’ll be working with the real estate committee both in Toronto and beyond to make sure that we’ve got it right. But, you are familiar with, there was a real people shoutings about the over-heated market and we’ve taken a 16 -point actions and we’ll be monitoring the impact,” she said.
