Considering the record immigration levels we are seeing, the experts feel there will be a strong need for both rental and home ownership in the Greater Toronto Area and even expanding to the Greater Golden Horseshoe. However, the real estate market statistics are seemingly not cooperating with the demand.
There were fewer home sales last month than a year ago, in August 2022. Of course, this is less than desirable.
Some of the issues are just a continuation of what we have experienced all year. The interest rate increases make borrowing less attractive. Economic uncertainties and reactions from the Bank of Canada add to the stress. Sellers who must let go of their property for various reasons are finding that the house is on the market for a longer period of time and often feel they must reduce the asking price. Buyers are finding fewer properties they might be interested in, even if they can qualify for a mortgage at a rate they can afford. This is reflected in the previous statement that sales are down and comparing the average prices on the homes that have actually closed.
The numbers tell the story in more detail. The GTA Realtors Association logged 5,294 sales in August 2023, which is a 5.2% dip compared to the same month a year ago. New listings were actually up by 16.2% comparing the same month year over year, but still lower than they should be considering the need for good housing.
Selling prices were only slightly higher than the year before. MLS keeps track of average sale prices, and they say, yes, the prices increased, but only by less than 1%. Looking at adjustments for what should be a seasonal increase, the average price actually declined by 1.6%.
Interest rates took a brief respite, but as they began to increase again in May, offers became less firm and were renegotiated. Another factor potential buyers are considering is the rumor of higher taxes. The municipal land transfer tax (MLTT) will affect first-time home buyers the most.
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