Greater Toronto Area Housing Sales Ease In March

April 3, 2008

 

Low inventory levels kept the Greater Toronto Area resale housing market brisk but well off record levels last month.

 

Overall sales in the GTA declined 22% compared to March 2007, 27% in the City of Toronto and 18% in the 905 suburbs. It's important to recognize, though, that despite the worst winter in decades, 6,631 homes changed hands last month in the GTA and that is still a significant number.

 

Diminished listing inventory, which at 20,533, was down 6% from a year ago, kept prices strong in March.

 

Compared to last March, the average price in the GTA rose 4% to $380,338 and 2% in the City of Toronto to $404,361.

 

As well, a few neighbourhoods experienced increased sales activity last month.

 

March's moderate performance isn't disquieting given that Canadian economic fundamentals are holding steady.

 

40% of international households that come to Canada settle in the GTA, giving it robust immigration levels; employment and wages continue to be strong; borrowing costs remain at historically low levels and there is a wide variety of mortgage products from which to choose.

 

This means that there is a steady demand for housing and consumers should have the financial resources to buy homes; with such pent-up demand it is an excellent time to sell your home.

 

- The Toronto Real Estate Board

April 2008

 

The Canadian real estate market is not on the brink of collapse and is expected to have balanced conditions in 2008, and realtors need to get that message out.

 

Analysts continue to suggest the Canadian real estate market will follow the same path as the United States. Recent events including use of the word "recession" in the U.S. and record swings on the stock market, have generated media speculation about a similar downturn in the Canadian market. In February, the Canadian Real Estate Association (CREA) issued a news release to try to counteract the negative press with a dose of "economic reality," in the form of market numbers and facts.

 

In a letter to real estate boards and associations, CREA said the statistics show the future of the residential real estate market in Canada is solid. However, the problem is that the analysts' views could become self-fulfilling and the greater the predictions of gloom, the greater the impact on the Canadian housing market.

 

In addition, the interest rate cut announced in March by the Bank of Canada will help Canadian home owners and buyers, though it is an acknowledgement that the U.S. economic slowdown was likely to be deeper and more prolonged than the Bank had projected six weeks earlier.

 

Declining interst rates and a rebound in economic growth are factored into the CREA Multiple Listing Service 2008 market forecast. MLS sales activity will stay strong and reach the second highest level on record this year. Residential MLS prices are also expected to continue rising. Additional cuts to mortgage interest rates are good news for housing affordability and Canadian housing demand.

 

Other key players in the real estate market are painting a positive picture for the economy in 2008 with Scotia Bank expecting "balanced conditions will prevail throughout 2008, which will mark a return to a more normal environment than the highly skewed seller's market that we have experienced over the better part of this decade.

 

Domestic economy and the housing market will weather the subprime fallout with the help of the lower interest rates.

 

- Canadian Real Estate Association

 

 

 

TERM           POSTED              BEST

1 Year          7.15%               5.1%

3 Year          7.2%                 5.25%

5 Year          7.19%               5.35%

7 Year          7.6%                 6.2%

10 Year        7.95%               6.25%

Variable                                4.25%

Prime Rate      =  5.25%

  *Rates are subject to change without notice

(Mortgage rates provided by Kim Gibbons, AMP & Mortgage Consultant, Mortgage Intelligence www.dreamplan.ca)