TREB President’s Column as it appears every Friday in the Toronto Sun’s Resale Homes and Condos section.
December 21, 2012 –
A moderate number of resale home transactions took place throughout
the Greater Toronto Area (GTA) in November, with 5,793 homes
changing hands. This represented a 16 per cent decrease from
6,908 sales in November 2011.
In Toronto 2,308 transactions took place last month compared
to 2,952 sales a year ago – a decline of nearly 28 per cent.
Meanwhile 3,485 homes changed hands in the 905 Regions, a decrease
of more than 13 per cent from 3,956 sales in November 2011.
A key factor that has influenced the dip in sales experienced
in recent months relates to the changes in mortgage lending
guidelines that came into effect in July. The changes reduced
the maximum amortization period from 30 years to 25 years and
set a purchase price ceiling for government backed insured
mortgages at one million dollars. These regulations have resulted
in some households putting their decision to purchase on hold
while they save up more money for a down payment and/or experience
an increase in their income. Adding to this situation in the
City of Toronto is the additional upfront Land Transfer Tax,
which takes money from home buyers that could otherwise be
used to offset the high costs of home ownership.
While sales decreased year-over-year in November, a modest
overall price increase was reported, with the average price
of a GTA home reaching $485,328. This represented an increase
of 1.6 per cent compared to a year ago.
The 905 Region, with an average price of $463,779, showed a
price increase of four per cent compared to a half-percent
decrease in the City of Toronto average home price, which was
$517,866.
The pace of average price growth in November was slower than
what was experienced for much of 2012, especially in the low-rise
segment of the market. This was largely due to the fact that
the mix of single detached homes sold in the City of Toronto
this past November changed relative to last year. Specifically,
the share of homes that sold for over one million dollars was
down considerably.
While the mix of home types sold may have changed, market
conditions remained tight for low-rise home types. This is
evident when we consider the MLS® Home Price Index (HPI) for
the GTA. The MLS® HPI tracks the price change for benchmark
homes – in other words: a home with the same attributes over
time. When we look at price through this lens, we find that
the benchmark price for major home types was up by 4.6 per
cent in the GTA as a whole and 3.9 per cent for the City of
Toronto.
News on the employment front was positive in November, as the
Toronto seasonally adjusted unemployment rate decreased to
8.2 per cent, from 8.6 per cent the previous month. Interest
rates remain largely unchanged, with a five year fixed mortgage
rate of just over three per cent continuing to be available.
At this time of year I am often asked whether it is prudent
to list one’s home for sale over the holidays, and there are
in fact, many benefits to doing so. Consider that those viewing
homes at this time of year are more likely to be serious buyers.
As well, homes often look their best when they are decorated
for the holidays, and a favourable emotional response to a
property often prompts an offer.
I encourage you to talk to a Greater Toronto REALTOR® about
the many other factors you should consider before choosing
to make your next move and in the meantime, be sure to visit
www.TorontoRealEstateBoard.com for all of the latest updates
on the market.
Ann Hannah is President of the Toronto Real Estate Board,
a professional association that represents 35,000 REALTORS®
in the Greater Toronto Area.
Follow TREB on www.twitter.com/TREBhome, www.Facebook.com/TorontoRealEstateBoard and www.youtube.com/TREBChannel
Article source: http://www.torontorealestateboard.com/market_news/president_columns/pres_sun_col/index.htm
Tags: Toronto Realtor