July 2022 Toronto Market Watch |
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TRREB recently reported that 4,912 home sales were recorded through MLS system, less 47.4% compared to July 2021. The year-over-year percentage of new listings in July also declined 4.1%. The sales-to-new-listings ratio is much reduced to 41% compared with July 2021. More choices on the market and more bargaining power, the end-users are sitting on the sidelines to view the market change and are waiting for the prices to drop further due to economic uncertainty and high borrowing cost. The average selling price for all home types combined was up by 1.2% to $1,074,754 compared to July 2021. The property price depend on the local dynamic and neighbourhood. **The MLS Home Price Index (HPI) Composite Benchmark was $1,157,500, up by 12.9% year-over-year. Compared to last month of June, the Home Price Index also declined 3.9%. |
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In the condo segment, the price growth is getting stronger than other low-rise properties. In the previous pandemic years of 2020 and 2021, the home buyers had the strong desire for more spaces to gear up with work from home at very low borrowing costs and lost their interests in comparatively smaller condo units. It is now shifting the demand for the low entry price condo units in order to reduce the impact on high borrowing costs and can mitigate the risk in the future, particularly in areas outside of Toronto (905) that are offering attractive price points. The condo average selling price was up by 13.1% to $719,273 compared to $635,778 of July 2020. |
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- Since March 2022, the interest rate has increased by 2.25% to substantially impact on the sales transactions. The moderate annual price growth still remains (the green bar) |
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The new condo market likely continue slowing down because the buyers act cautiously of the higher-priced projects caused by the soaring construction costs. The proposed increment of development fee and inclusionary zoning policy will increase the pressure on the new project prices in the future. Toronto developers expected to delay about 10,000 units. | | |
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- The availability for new condo units slowing down is not good to accommodate the growing population. Over 430,000 immigrants are expected to arrive in Canada each year between 2022 and 2024. "With savings high and the unemployment rate still low, home buyers will eventually account for higher borrowing costs. When they do, we want to have an adequate pipeline of supply in place or market conditions will tighten up again,” said TRREB Chief Market Analyst Jason Mercer. - The new buildings were occupied for the first time on 15 November 2018 or after are not rent controlled. That is led to a trend of investors turning their attention to newer builds. Buying an assisgnment is a good alternative at lower price than purchasing a new pre-sale project. - It is really interesting time to predict the market status and evaluate "the bottom price". The market transactions may resume a bit more in fall after summer vacation. Please contact our team to discuss further about your plans to make the proper decision. Thank you |
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**Footnote: It provides a price growth measure for a benchmark home with the same characteristics over time, allowing for an apples-to-apples comparison from one year to the next. |
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