Sales of resale homes in GTA dropped by 16% in November compared to November 2011, according to the data released by the Toronto Real Estate Board (TREB). The MLS system in the Greater Toronto Area reported 5,793 sales in November 2012, compared with 6,908 transactions recorded in November 2011. full report
Home sales were down in all regions and all major property types. Toronto had the largest decrease, down by 23%, while York Region followed closely behind, down by 22%. Home Sales fell by 16% in Peel, 9% in Halton, and 2% in Durham.
Sales of condos had the largest decline of 25%, while sales of townhouses, semi-detached and detached homes had a decline of 14%, 11% and 13%, respectively.
Strong sales in the last half of 2011 and the first half of 2012 and stricter mortgage rules are considered the major factors that drove the sales down.
"Transactions have been down on a year-over-year basis since June, after being up substantially in the last half of 2011 and the first half of 2012. Some buyers pulled forward their decision to purchase, which has impacted sales levels in the second half of 2012," said Toronto Real Estate Board President Ann Hannah.
Finance Minister Jim Flaherty tightened mortgage rules in July, the fourth time in recent years, in order to cool a potentially over-heated housing market in Canada. The new mortgage rules reduce the maximum amortization from 30 years to 25 years, making it harder for many potential home buyers to get the mortgage they need.
While home sales were down, the average selling price increased to $485,328 in November, up by 1.6 per cent compared to November 2011. The MLS Home Price Index (HPI), which allows for a more accurate price comparison, was up by 4.6 per cent compared to last year.
Average selling prices for detached homes and condo apartments in Toronto were down by about 4%, while in the 905 area, average selling prices were up 3% for detached homes, 6% for semi-detached homes, 1% for townhouses, and 3% for condo apartments.
"The moderate annual rate of price growth compared to previous months was largely due to a different mix in detached home sales this year compared to last, particularly in the City of Toronto. The share of detached homes that sold for over one-million dollars was down substantially, which influenced the overall average price," said Jason Mercer, TREB’s Senior Manager of Market Analysis.
"The MLS® HPI detached benchmark price, which tracks the price for a home with the same attributes over time, was up by almost six per cent in Toronto, suggesting that market conditions for low-rise homes remain quite tight despite a changing mix of sales," added Mercer.