According to the Canadian Real Estate Association, Ontario’s Fair Housing Policy played a major role in the downward change in market conditions for the GTA and the Greater Golden Horseshoe which includes the Niagara Region.
August Sales Rebound in the GTA
CREA has stated that August indicated the first monthly increase in sales activity since the announcement of the Fair Housing Policy on April 20-17. The represents a 14.3% rebound month-over-month, yet “GTA sales activity remained well down compared to the peak reached in March (-36%) and year-ago levels (-32%).
Yet August Sales Fell Again in Niagara
In the Niagara Region, month-over-month sales dropped from 652 sales reported by MLS for July compared to 633 for August, a decline of -3%. As well, August represents a -25.8% decrease in sales compared to year-ago levels and a more dramatic -31.8% in sales compared to the peak reached in March of 2017.
Will Sales Rebound?
It remains to be seen whether the rise in August sales for the GTA “marks the beginning of a rebound in the Greater Golden Horseshoe…” according to CREA’s Chief Economist, Gregory Klump. Here are some further insights:
- The sale-to-new listing ratio of 68% for the Niagara Region in August continues to indicate a seller’s market; yet this ratio has dropped considerably compared to a ratio of 85% in March.
- CREA also reported 2.3 months of inventory for the Greater Golden Horseshoe, well above the extreme low of 0.8 months reached in February and March, the long-term average being 3.1 months. Currently the Niagara region has about 2.45 months of inventory, quite comparable to that of the Greater Golden Horseshoe.
CREA further states that sales in Ontario “are projected to decline by about 10% in 2017 compared to the all-time record set in 2016. In 2018, they forecast national sales to decline by about “2.3% compared to the 2017 forecast.”
What About Prices?
CREA projects a year-over-year increase in average prices for Ontario of +8.7%, “a large downward revision to the previously forecast increase.” Price gains in Greater Toronto have continued to slow down on a year-over-year basis, now at +14.3%.The following indicates how the overall average price for Niagara faired from June to August of this year:
- June saw a peak average price of $457,456, a 34.08% increase from June of 2016.
- In July the overall average decreased to $375,903, a 14.4% increase from July of 2016 and a -18% decrease from the previous month of June.
- In August the overall average increased to $391,065, a 17% increase from August of 2016 and a 4% increase from the previous month of July.
CREA predicts that the overall average price for Ontario will fall back by about 1.1%. Typically the fall brings a rebound in the market. This remains to be seen, especially with interest rates on the rise.