GTA REALTORS® Release September Stats
October 5, 2022:
“The Greater Toronto Area (GTA) housing market continued its adjustment to higher borrowing costs in September 2022. Sales for the month reached 5,038, but were down by 44.1 per cent compared to September 2021. New listings were also down on a year-over-year basis by 16.7 per cent to 11,237. This was the lowest number of new listings reported for the month of September since 2002. This is 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. Candidates running in the upcoming Ontario municipal elections must ensure home buyers and renters have adequate housing options in the years to come. 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,
said TRREB President Kevin Crigger.
Elected councils must also 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,
said TRREB CEO John DiMichele.
The MLS® Home Price Index (HPI) Composite benchmark was up on a year-over-year basis by 4.3 per cent. Over the same period of time, the average price dipped by 4.3 per cent to $1,086,762. The average price was up compared to August 2022.
Hovering just below $1.1 million, the average selling price may have found some support during the last couple months of summer. With new listings down quite substantially year-over-year and well-below historic norms, some home buyers are quite possibly experiencing tighter market conditions in some GTA neighbourhoods. October generally represents the peak of the fall market, so it will be important to see where price trends head over the next month,
said TRREB Chief Market Analyst Jason Mercer.”
This is the monthly indication of the average sales prices of single family homes (all property types) in the GTA:
$932,297 January 1st
$966,068 January 31st
$1,157,861 January 1st
$1,242,076 January 31st
$1,334,123 February (all time peak)
$1,073,730 July (bottom)
$1,079,500 August (reversal)
$1,086,762 September (increasing)
What usually happens each year? The market starts off in January, rises in February, gains momentum in March and April and reaches its peak for the year in May. The market declines in June, declines in July and then bottoms out in August. In September, it reverses itself and rises once again, and in October, it reaches its second peak for the year. In November, the market declines, as it does again in December, and the cycle repeats itself the following year.
For 2022, we were off to a fairly predictable start. The market got going in January, and rose again in February. The surprise was a slight dip in March. Then, we faced further declines in April and May which should have been the top of the market for the year. The decline in June is actually predicable, as was the decline in July and we should ordinarily expect a further slight decline in August, before we see some upward momentum in September. But, that didn’t happen, we saw a reversal and a change to upward momentum in August. Adding to that new trend is the month of September with further increases. So, that would certainly indicate that the market has bottomed out, and we are now seeing upward momentum.
Looking at the numbers, over a 7 month period this year (February to September) we saw a decline of $247,361 or 18.54%. This is almost a quarter of a million dollars. So, current prices are quite attractive, even if there is an increased interest rate.
Sales are off significantly. In 2021, we had 9,010 transactions in September, while this September we only have 5,038. Actually, that’s entirely predictable. Buyers get nervous. Where is the market headed? Naturally if “down” is the answer, they are going to sit and wait.
Also, listings were down by 16.7%. That simply means that Sellers are going to sit and wait rather than jump into this market. They are cautious too!
However, what we have just witnessed is a decline and a bottoming out, which should suggest that this is a good time to buy. There is one little problem and that is, that Buyers have less money to spend since interest rates went up. That also means that they should act as soon as they can in order to avoid any potential price escalation.
Overall, it is still a Sellers’ market. There just isn’t enough inventory. What we are looking at right now is simply some temporary opportunities.
It’s impossible to predict the future, but we can certainly observe the current trends in the marketplace to give us some guidance.
If you would like to discuss the market, please give me a call at 647-404-8150.
Brian Madigan LL.B., Broker