Greater Toronto home sales plunge by 26 per cent overall
A stomach churning drop of up to 61 per cent in the number of home sales in some municipalities around Toronto could translate to a singledigit decline in regional prices by the end of the month, says a realtor who has crunched the numbers.
John Pasalis of Realosophy, found Toronto region ground-level home sales — detached, semi-detached and town houses — dropped 26 per cent overall between April 20 and May 20 — the period directly following the provincial Fair Housing plan announcement designed to cool real estate speculation in the area.
Meantime, another data-tracking brokerage, Condos.ca, is showing that prices per square foot are down nearly1per cent in the last 60 days on its rolling 60-day average.
“A nervousness has crept in and seems to be taking hold quite quickly,” said Andrew Harrild, vice-president of Condos.ca.
The Realosophy analysis shows York Region, which has seen a higher level of investment buying, having the most significant drop in the number of resale home transactions — 61 per cent in Richmond Hill; 46 per cent in Markham and 44 per cent in Newmarket.
Durham Region, long considered one of the last pockets of affordability, saw the only increase in the area — about 15 per cent in Pickering and 11 per cent in Whitby.
Sales were down 23 per cent in Toronto in Realosophy’s analysis.
Typically, real estate prices are compared year over year. This month’s home prices will still be up compared to May 2016, said Pasalis.
“But when you start looking at this May compared to April, we’re probably going to see prices fall. Usually prices don’t fall from April to May. Those are peak months. I think we’ll see prices falling maybe 5 or 7 per cent,” he said.
That could reflect the trapped state of home sellers, who have already bought a new house and are struggling to sell their old property so they accept a lower price.
“Of all the sellers out there, half of them aren’t motivated, the other half are desperate because usually they’ve already bought a house. They weren’t planning for this slowdown and it’s very difficult because they need to sell and they have no options,” Pasalis said.
Sellers who aren’t desperate could just take their homes off the market.
“I had clients who bought just outside the city just when the market started to cool down about a month ago. They ended up selling relatively quickly. We got maybe 4 to 5 per cent less than they expected to get,” he said.
“In some cases I wouldn’t be surprised if people just don’t close.”
Harrild says that it’s too soon to know for sure if the provincial policy announcement is the source of the recent jitters, it seems likely given the almost-overnight change.
“If you’re a seller in this market you have to be very careful about how you price your listing,” he said.
Although the price per square foot is down slightly to about $667 in Toronto on average, condo prices overall were up nearly 30 per cent year over year in the same 60-day period to an average sale price of $548,186, according to the Condos.ca index.
But it’s possible developers will change pricing strategies, Harrild said.
“Prices are still up significantly versus what they were this time last year. It will be interesting to see how developers start to change their pricing moving forward and whether they’re pricing developments as aggressively as they were 60 days ago,” he said.
“I don’t think a slowdown will be exclusive to the resale market,” Harrild said. “If anything, the introduction of this foreign buyers tax was geared to (speculators) and investors and they tended to dabble in the (pre-construction) market.”
Resale house prices were about $1.1 million on average across the region at the end of April, according to the Toronto Real Estate Board.
New construction condos rose about 24 per cent year over year in April, according to statistics released by the Building and Land Development Association on Tuesday.