Toronto Home Sales Cool Amid Signs Prices May Be Next to Fall (Bloomberg Article - Quotes by Tom Storey) - The Storey Team : Toronto Real Estate

The Storey Team : Toronto Real Estate

Toronto Home Sales Cool Amid Signs Prices May Be Next to Fall (Bloomberg Article - Quotes by Tom Storey)

21 June 2017
Tom Storey

Here’s more evidence that one of the world’s hottest housing markets is cooling down.

Home sales in Toronto fell by half to 2,999 in the first two weeks of June from the same period a year earlier, according to preliminary data from the Toronto Real Estate Board obtained by Bloomberg News. The average price for all property types rose 6.7 percent to C$808,847 ($608,888), easing from a 17 percent gain last June. And listings surged 22 percent.

“You’re having different conversations: for buyers, now we can see five to six properties in one day instead of ‘let’s go run and see this one because it’s the only one,’" Tom Storey, a Royal LePage real estate agent in downtown Toronto, said by phone. Sellers "used to list for six days and see offers, now we’re starting to see conditions creep back into the market like home inspections."

Toronto’s housing market has been hit in recent months with the imposition of a 15 percent tax on foreign buyers and tighter mortgage regulations. Listings are surging as sellers look to cash out after a record run-up, and buyers get picky. Mid-month data add to signs -- including at least one major indicator -- that prices may soon modestly decline.

The cooling began earlier this spring: home-listing terminations tripled to about 1,770 in the first three weeks of April, up from just 600 in the same period last year, TREB data show. The terminations rose as sellers pulled listings and lowered their asking price before putting it back on the market. Some people did this several times, according to Storey.

While sellers are looking to book profits following soaring demand and prices over the last few years, confidence may also have been hit by the near-collapse of Home Capital Group Inc., which offers mortgages to people turned away by traditional banks. Some were simply unable to afford the prices earlier this year and several new regulations made getting mortgages harder.

The slowdown puts Toronto more in line with other large North American markets. It wasn’t the case earlier this year. The average price of a property in Canada’s largest city climbed 28 percent in February, outstripping the 18 percent gain in median Manhattan homes. Now, Toronto’s single-digit rise is below the 17 percent increase in Manhattan prices as of April 30. 

— With assistance by Erik Hertzberg