TORONTO, July 6, 2017 — Toronto Real Estate Board
President Tim Syrianos, in his first release as TREB
President, announced TREB residential MLS® sales, listings and price statistics
for June, a mid-year forecast update and related Ipsos consumer survey results summarizing home buying and selling intentions.
June 2017 Results
Greater Toronto Area REALTORS®
reported 7,974 sales through TREB’s MLS® System in June 2017 – down by
37.3 per cent in comparison to June 2016.
The number of new residential
listings entered into TREB’s MLS® System, at 19,614, was up by 15.9 per cent
compared to June 2016. While this
annual rate of growth was sizeable, it represented a more moderate annual rate
of growth compared to May 2017, when new listings were up by 48.9 per cent
year-over-year.
“We are in a period of flux that
often follows major government policy announcements pointed at the housing
market. On one hand, consumer survey
results tell us many households are very interested in purchasing a home in the
near future, but some of these would-be buyers seem to be temporarily on the
sidelines waiting to see the real impact of the Ontario Fair Housing Plan. On the other hand, we have existing home
owners who are listing their home because they feel price growth may have
peaked. The end result has been a
better supplied market and a moderating annual pace of price growth,” said Mr. Syrianos.
June’s average selling price for
all home types combined for the TREB market area was $793,915, representing a
6.3 per cent increase compared to June 2016. Year-to-date through the first six
months of 2017, the average selling price was up by 20.9 per cent to $870,016. A better supplied market
has certainly been a key factor influencing the moderation in price
growth. However, the average
selling price has also been impacted by the fact that the greatest home sales
declines were for more expensive home types, most notably detached houses. This means the change in the mix of
homes sold this past June compared to a year earlier has also had a substantial
impact on the overall average selling price.
Annual growth rates for MLS® HPI
benchmark prices have moderated over the past two months, but remain
strong. The MLS® HPI composite
benchmark price was up by 25.3 per cent on a year-over-year basis in June. However, on a month-over-month basis, we
have seen diverging trends. Benchmark prices were down on a month-over-month basis for detached houses
(-1.3 per cent), attached houses (-1.4 per cent) and townhouses (-0.04 per
cent). In contrast, benchmark
prices continued to climb on a monthly basis for apartments (+1.0 per cent).
Ipsos Spring Consumer Survey Results
Following the announcement of the
Ontario Fair Housing Plan, TREB commissioned Ipsos Public Affairs to undertake two consumer surveys: one focused on home buyers;
the other focused on home sellers.
Highlights from these two surveys,
conducted from May 23-29, are as follows:
Home Sellers
·
30 per cent of GTA households
are very likely (12 per cent) or somewhat likely (18 per cent) to list their
house over the next year.
·
15 per cent of households said
that the Fair Housing Plan was the primary reason why they would list their
home for sale over the next year.
·
Close to 80 per cent of
households who said they were likely to list their home said they would be
purchasing another home.
Home Buyers
·
35 per cent of households
surveyed indicated that they were very likely (13 per cent) or likely (22 per
cent) to purchase a home over the next year – similar to what was
reported from the Ipsos survey conducted for TREB in
the fall of 2016.
·
40 per cent of likely buyers
indicated they would be first-time buyers – a marked decline from 53 per
cent in Ipsos’ fall survey.
·
10 per cent of households who
said they would NOT purchase a home over the next year said the Fair Housing
Plan was the key factor in this decision (one per cent) or a contributing
factor (nine per cent).
“The recent Ipsos survey results suggest that home buying activity in the GTA will remain strong
moving forward. The year-over-year
dip in home sales we have experienced over the last two months seem to be the
result of would-be buyers putting their decision to purchase temporarily on hold
while they monitor the impact of the Fair Housing Plan. On the supply side of the market, it
certainly looks as though buyers will benefit from more choice in the second
half of 2017 compared to the same period in 2016,”said Jason Mercer, TREB’s
Director of Market Analysis and Service Channels.
Forecast Update
The Ontario Fair Housing Plan has
prompted some households to put their decision to purchase a home on hold, at
least in the short-term. This
includes would-be first-time buyers, who have more flexibility, allowing them
to take a wait and see approach. However, the recent Ipsos survey results
dealing with likely home buyers suggest that many households who have moved to
the sidelines will return to the market over the next year, possibly after reassessing
the type and/or location of home they plan to purchase.
“The Ontario government recently
released their first wave of foreign buyer statistics, which confirmed earlier
TREB research that showed foreign buyers, even in the pre-Fair Housing Plan era,
represented a very small proportion of overall home purchases – slightly
less than five per cent. This,
taken along with the strong buyer intentions reported by Ipsos,
suggests that we will see many households moving back into the home ownership
market over the next 12 months,” said TREB CEO John DiMichele.
“It remains to be seen whether the
level of inventory will hold up to accommodate the eventual resurgence in
demand. The Fair Housing Plan was
less precise as it related to long term housing supply issues. Moving forward, TREB looks forward to
working with the Ontario government in the development of effective,
evidence-based policies pointed at the housing market,” continued DiMichele.
While the impact of the Fair
Housing Plan may be temporary as it relates to home sales, it is important to
note that the probability of higher borrowing costs over the next 12 months has
increased. The consensus view is
that the Bank of Canada will raise its Target for the Overnight Rate at least
once in the second half of 2017 and perhaps more than once. Prospective Bank of Canada increases
have already been priced reflected in Government of Canada bond yields and
posted mortgage rates, at least to some degree. Advertised discounted mortgage rates,
however, remain at or near historic lows.
Taking into account both the
temporary impact of the Fair Housing Plan and the further impact of higher
borrowing costs, TREB’s forecast range for home sales through its MLS® System
in 2017 has been revised downward to between 89,000 to 100,000 transactions.
While home sales for calendar year
2017 will be down, listing activity will be up. As home owners react to strong equity
gains over the past year, plus feelings that price growth will moderate in the
future, new listings entered into TREB’s MLS® System are expected to increase
year-over-year. Look for the total
number of new residential listings to range between 175,000 and 190,000 this
year.
More balanced market conditions,
with sales accounting for a smaller percentage of listings in the second half
of 2017 compared to the first half, and particularly the first quarter. The overall growth rate for the average
selling price in 2017 will be between 13 per cent and 18 per cent. While an annual rate of growth in this
range will still be very strong from a historic perspective, it is important to
note that it will also represent a moderation in year-over-year average price
growth in the second half of the year. This moderation will be due to both more balanced market conditions and
a change in the mix of homes purchased, with a greater share of purchases
accounted for by townhouses and condominium apartments.
Release Highlights
·
TREB MLS® sales were down by
37.3 per cent year-over-year in June. Over the same period, the number of new listings was up by 15.9 per cent
– a deceleration in the annual growth rate compared to May.
·
The MLS® Home Price Index (HPI)
composite benchmark price was up by 25.3 per cent on a year-over-year basis in
June, but on a month-over-month basis the composite benchmark price was down.
·
The average selling price for
all home types combined was 793,915 up 6.3 per cent compared to June 2016.
·
Looking forward, calendar-year
TREB MLS® sales are expected to range between 89,000 and 100,000 – down
from the record level recorded in 2016.
·
A recent consumer survey
conducted by Ipsos following the announcement of the
Ontario Fair Housing Plan suggests that home buying intentions for the next 12
months remain strong and in line with past survey results from the fall of 2015
and 2016.
·
The results from a recent Ipsos survey of intending home sellers supports recent
trends in TREB MLS® data pointing to elevated levels of listings compared to
2016.
·
An increased supply of listings
coupled with a dip in home sales will result in a more moderate year-over-year
pace of price growth in the second half of 2017, but the calendar year growth
rate for 2017 will remain in the double-digits.
Article source: http://www.trebhome.com/market_news/release_market_updates/news2017/nr_market_watch_0617.htm
