August was, by many measures, a stellar month for Toronto?s housing market, with record-breaking sales signalling the continuation of a massive bounce back for the market after a dismal spring.
But signs have begun to emerge that the robust summer rebound may be losing a bit of momentum heading into an uncertain fall season.
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In a deep dive into the Toronto Regional Real Estate Board?s (TRREB) August sales and price data, Central 1 Credit Union found that last month new listings grew at a faster rate than home sales for the first time since the pandemic lockdown began. Returning expats to boost new home building in Canada
This spike in new listings caused the widely watched sales-to-new-listings ratio to decline to 53.6 percent in August, down from 62.9 percent in July. The downward shift placed the Toronto market squarely in balanced territory, as a ratio reading below 40 percent signals a buyer?s market while a reading above 60 percent denotes a seller?s market. Typically, prices increase at a significant rate when the ratio is above 60 percent over a sustained period.
?With more choice in the market [in August], average price growth increased at a slower clip moving up 3.5 per cent to $994,316,? wrote Central 1 Regional Economist Edgard Navarrete. Mortgage costs stay low, central bank keeps interest rate at rock-bottom level
TRREB?s home price index also increased at a slower rate than what was seen in July, rising two percent in August, compared to 2.7 percent a month earlier, according to Navarrete?s analysis. The economist said price growth deceleration was evident across all property types, with single-family homes logging the most significant slowdown.
While Toronto?s housing performance this summer defied expectations, delivering several months of strong home sales activity and price growth, the potential for a fall cooldown has been weighing on the minds of market experts. Multi-family developments will lead Ontario construction rebound in 2021: Central 1
Navarrete acknowledges that low mortgage rates are here to stay for some time, but pent-up housing demand held over from the spring may be starting to ebb while the employment picture remains precarious for many would-be homebuyers.
?Increased choice in the market, especially for condo apartments, has rebalanced the overall market at least for one month. Whether this is a blip or the start of a trend as the summer rush ends and the rest of the year brings muted activity remains to be seen,? Navarrete wrote. Toronto home sales post best-ever total for August