Too early to tell whether Vancouver’s new tax helped drive Toronto sales.
As Toronto home sales topped records, Vancouver's dropped, following the introduction of a tax on foreign buyers. (NAKITA KRUCKER / TORONTO STAR FILE PHOTO)
Toronto home prices and sales showed no signs of slowing their climb last month in the face of dwindling listings, according to the latest statistics from the Toronto Real Estate Board (TREB).
Its agents sold 9,813 homes last month, a 23.5 per cent increase over August 2015, the board said Wednesday. Even adjusting for an extra two working days in August this year, volume rose by 13 per cent.
The average home price rose 17.7 per cent to $710,410 across the region last month, with the biggest percentage gains in the 905-area communities outside the city.
The $1.2 million average cost of a Toronto detached home was 18.3 per cent higher this year compared to last. But a detached home outside Toronto with an average cost last month of $905,610, was 23.3 per cent more than August 2015.
That is partly explained by the mix of housing available in different areas with more low-rise housing outside the city, said Jason Mercer, TREB's director of market analysis.
"You're seeing double-digit price growth in both cases for detached and semi-detached houses and it's just part and parcel of increasing competition between buyers. It's not just a 416 phenomenon, it's the 905 too," he said.
The number of condo sales rose 32 per cent across the region with the average price up nearly 10 per cent. About two-thirds of last month's 2,786 condo sales were in Toronto.
It's still too soon to say whether British Columbia's month-old, 15 per cent foreign-investment tax is pushing up sales in Toronto, said Mercer.
TREB is planning to survey its members this fall to build a better buyer profile of transactions over the last year.
"By the end of the year, we'll at least be able to give a better sense of what share of buying activities is attributable to foreign buyers versus domestic households."
But, he said, "It's still a work in progress to try to draw out people who would have otherwise purchased in Vancouver, if they're purchasing in the GTA or other metropolitan areas across the country.
"What are you looking at when you're talking about a foreign investor? Is it someone who is living abroad and just purchasing a home or is it someone who is planning on moving to Toronto or Vancouver and just isn't a Canadian citizen yet?"
Bosley agent and real estate blogger David Fleming agrees it's too soon to say if that west coast tax is influencing the Toronto market.
But he doesn't expect it will have much impact. Even a couple of percentage points doesn't make much difference with the demand so high in Toronto, said Fleming.
"A lot of those would-be buyers in Vancouver are sitting back and waiting to see what happens. They're not automatically going to jump in," said Fleming, adding there are too many other cities where offshore buyers can park their investments.
"You can't look at one month of sales and directly attribute that," he said.
Until January, when analysts can compare the fall and spring markets, it's impossible to draw any conclusions, said Fleming.
BuzzBuzzHome, an online hub for new construction, says foreign inquiries for information on high-rise and low-rise developments were down 15 per cent for B.C. in August compared to July this year. But they were up 20 per cent in Ontario.
Inquiries for Vancouver developments fell 31.5 per cent, while Toronto inquiries remained flat, suggesting that foreign interest is in the communities outside the city, said BuzzBuzz Homes president Matthew Slutsky.
Year-over-year statistics were not available. Last year was "a completely different selling environment," he said.
Favourable economic conditions in Ontario and low interest rates, as well as a shortage of listings, are contributing to the scorching Toronto area market, say TREB officials.
Sales in Vancouver dropped 26 per cent in August compared to a year ago, following the introduction of the tax on Aug. 2.
Prices in Vancouver continued to rise, however, with the benchmark price for all residential properties climbing 31.4 per cent from a year ago to $933,100.
Files from Canadian Press
August real estate numbers
Average Toronto home price
Average home price in 905-area communities outside Toronto
Average Toronto area home price
Average price of a Toronto area home year-to-date
Average price of York Region home
Average price of a home in Durham Region
TORONTO REAL ESTATE BOARD
Article written by: TESS KALINOWSKI Real Estate Reporter