Canadian home sales drop due to low activity in the GTA
By Lucas on Jul 17, 2017
According to the latest monthly statistics from the Canadian Real Estate Association (CREA), the Greater Toronto Area (GTA) resale market has a lot to do with the overall drop in Canadian home sales.
In June 2017, Canadian MLS sales dropped 6.7%. Non-seasonally adjusted sales activity dropped 11.4% on a year-over-year basis, partially due to a significant drop in the GTA. Listings also fell 1.5%, with a big “pullback” from homeowners in the GTA, compared to record listings in April and May 2017.
“Canadian economic and job growth have been improving, which is good news for housing demand, however, it also means that interest rates have begun to rise, which may impact homebuyer confidence,” says Andrew Peck, CREA President.
The average sale price in June 2017 was $504,458, which is only 0.4% higher than the same period last year. This average is much lower than the averages from February to May of this year. In April, the average price of a Canadian home hit $559,115, the highest of the year so far.
As usual, Greater Vancouver and Greater Toronto are skewing the national average price. If you take Vancouver and Toronto out of the equation, the average price is only $394,660.
“Changes to Ontario housing policy made in late April have clearly prompted many homebuyers in the Greater Golden Horseshoe region to take a step back and assess how the housing market absorbs the changes,” says Gregory Klump, CREA Chief Economist.
Without a doubt, the resale market has been impacted by the Fair Housing Plan announced by the province of Ontario, and there’s at least been a psychological effect on the new home market.
According to a recent consumer survey by the Toronto Real Estate Board (TREB), 10% of households that are not planning to buy a home over the next year say that the Fair Housing Plan is a key or contributing factor.
As builders prepare for fall releases and openings, we’re eager to see how the market responds.
