Is the Toronto slump already over?
November 27, 2018
The downturn in the Greater Toronto Area (GTA) housing market may have been shorter than expected and may already be over, based on recent sales and price activity.
According to Altus Group, 1,747 new homes sold in the GTA in September—a sizeable increase over the 974 new home sales in August.
Then in October, sales of existing houses surged 6 per cent from the same month a year earlier, to 7,492 homes, reports the Toronto Real Estate Board (TREB). The average home price was up 3.5 per cent in the same period and 1 per cent higher than in September.
The GTA housing slump was largely triggered by a series of government measures earlier in the year, from a foreign-homebuyer tax to the mortgage stress test. But some had called for only a brief downturn in Canada’s biggest housing market. Dana Senagama, lead market analyst for the Toronto area for Canada Mortgage and Housing Corp. was among them.
"The response we're seeing in the Toronto market seems almost emotional and a knee-jerk reaction to some of the changes, which suggests that these impacts will be short-lived," Senagama said in June as the Toronto sales were falling.
It is not only central Toronto that is seeing an upturn. Average house prices in October were rising sharply, compared to a year earlier, across Ontario’s Greater Golden Horseshoe. According to the Canadian Real Estate Association, prices were up 9.3 per cent in Guelph, 6.8 per cent in Hamilton, 6.3 per cent in Niagara and 2.2 per cent in Oakville-Milton. “Many households in the Greater Toronto Area remain upbeat on home ownership as a quality long-term investment. A strong regional economy and steady population growth will continue to support the demand for housing ownership as we move into 2019," said TREB president Garry Bhaura