Toronto's housing industry is constantly on the rebound from the series of new housing measures that led to a steep price correction last year.
The latest data in the Toronto Property Board (TREB) implies that both sales and costs increased in August. There were 6,839 homes bought from the Greater Toronto Area last month, an 8.5% increase from August 2021. Meanwhile, the typical value rose to $765,270, addressing a 4.7% increase from last year.
But the average home in Toronto continues to be selling for way less than it did this past year. Last April, when house prices hit a peak in the city, the average selling price for all home types was $918,184. At least a year later, prices remain 16.66% down.
Regardless of this unnerving number, TREB says that recent numbers have been trending in an encouraging direction.
“The comparison of this year's sales and value figures to last year's record peak masks the truth that market conditions should support moderate increases home based prices once we move through the second half of the entire year, designed for condominium apartments and higher density low-rise
home types,” said Jason Mercer, TREB's Director of Market Analysis.
“Once we are beyond the current policy-based volatility, home owners should be expecting to determine the resumption of a moderate and sustained pace of price development in line having a strong local economy and steady population growth,” he added.
“Policy volatility” refers back to the B-20 rules from the Office from the Superintendent of Financial Institutions (OSFI), that have been introduced on Jan. 1. The rules require all homebuyers to undergo a stress test to make sure that they are able to afford their mortgage if interest rates increase.
The B-20 rules followed on the heels of Ontario's Fair Housing Plan, that was announced last April and is responsible for the big decline in prices observed in summer time of 2021. It included a tax on foreign buyers and new rent controls.
Prices for single-detached homes took the largest hit following the rules were announced, declining a lot more than 20% as a direct consequence. They have yet to recover the peak prices seen last year.
The average price for any detached home in Toronto was $1.244 million in August, which is a 4.9% increase from this past year. However, the year-over-year increase masks the truth that prices have begun declining again: in April, the price for a house was $1.354 million, which means prices have declined $110,000 in the past 4 months. Everything is little better in the 905 region, which includes cities such as Mississauga and Brampton, where costs are up only 0.3% year-over-year. The average house there sold for $907,780 in August, compared to an average of $929,092 in April – a couple.3% decline.
Condos, however, have helped support prices on the market. In Toronto, the cost of a flat increased for an average of $585,355 – up 8.3% when compared to August 2021.
Prices within the 905 rose 5.9%, bringing the typical to $440,748.
Experts have noted the B-20 rules, which significantly reduced purchasing power for prospective homeowners, is likely pushing many people who want a detached house in to the condo market instead.
It's clear that housing prices right now are being propped up by the condo market, where supply is tight at a time of increased demand. Whether that will eventually end and lead to housing prices falling farther remains seen.
While there are many housing bears with an accident in the Toronto market, those calls happen to be made for the greater part of a decade.