TREB announced a new record in sales for August 2016. A total of 9,813 sales were reported through TREB's MLS® System in August, which is 23.5 per cent more than in August 2015. However, since we had two additional working days in August 2016, so the real annual percentage change in sales is closer to 13 per cent.
The shortage of listings continues. Active listings were down by 37.8 per cent in August 2016 compared to last year. The average selling price for all home types combined was up by 17.7 per cent in a year-over-year comparison.
Lack of listings is again being felt in the August figures especially in the House vs. Condo market. We need to reevaluate the way the GTA has been growing and our reaction to it. We are in a world of Globalization, immigration and a continued move from an agrarian society. Density of the City and growth above existing stock will continue to be a growing concern for the future in this Toronto. I don't believe that this will change as much as our attitude must.
For those readers and clients who expect the new Vancouver Foreign Buyers tax to have an effect on the Toronto market, we will need at least three months to see if there is movement in the Toronto numbers because of the new tax. In the meantime our hearts go out to both sellers and buyers who have been caught in the aftermath of the tax and may be facing problems closing their sales because the tax was not grandfathered.
Jim and I have been invited to a one day round table discussion in Ottawa sponsored by CMHC (Canadian Mortgage and Housing Corporation) on the future of Housing In Canada. We will keep you apprised of the discussion and conclusions if any.
If the inventory doesn’t pick up this month, Sellers and Buyers could be in for a tough ride. We are almost at a gridlock, if the buyers who want to sell are unable to move up or down. And, the first time buyers in some areas are being priced out of residential properties, therefore, there only options are to look to condos. Condo townhouses are holding back offers and the majority selling over asking.
There is definitely a sense of "buyer fatigue" out there with many buyers frustrated at losing out, multiple times in multiple offer situations. This has in turn led to more competition within the condo marketplace as these fatigued buyers accept that they may not be able to get the freehold house they so desire and turn to the condo marketplace as an alternative.
There is a bottleneck with empty nesters looking to sell their longtime houses and downsize to a condo (to either rent or buy). However, given the limited availability of decent sized (1750+ sq ft) condos available for sale/rent, these downsizers are reluctant to sell their houses without having a secured place to move into. This leads to gridlock in much needed new listings for freehold houses.
I do not see this imbalance changing anytime soon but this also represents an ideal opportunity if you are considering selling, to fetch top dollar,......as long as you have somewhere to move to (hint: try outside the GTA to get great deals).
August was not just a summer month to have tourists enjoy our beautiful city, but also for them to have a taste of our real estate. Right before school started, parents were eager to settle their university kids in either rental or purchase properties. Condo market was quite tight as well. We even started to see that some rentals were holding offers. September will a another busy month due to new immigrants landing. Hopefully, inventory will pick up, so we could get some pressure off, both buyers' and ours.