Greater Toronto Area Housing Continues Steady Pace

June 18, 2008

 

The Greater Toronto Area resale housing market continued at a moderate but healthy pace throughout the first half of June.

 

Prices continued their upward trend in the first half of this month. The GTA average price is currently $398,542, up 4% over the $384,576 average from the same timeframe a year ago and up 11% from the $358,648 recorded at mid-June 2006.

 

In the City of Toronto the current average price is $439,469, up 3% over the $424,888 average a year ago and up 14% over the $386,960 average in the first half of June 2006.

 

In the 905 Region the average price is $371,686 up 4% from the $357,359 avearge a year ago and up 10% from the $338,578 recorded at mid-June 2006.

 

With 4,374 transactions in the first two weeks of this month, sales in the GTA declined 14% compared to the same timeframe a year ago when 5,074 properties were sold. However, compared to the first half of June 2006 when 4,074 properties changed hands, this month's activity is up 7%.

 

In the City of Toronto 1,733 sales took place to mid-June 2008. This represents a 15% decrease compared to the 2,045 properties sold a year ago but a 2% increase over the 1,690 transactions in the first half of June 2006. A different story emerges when you compare the first half of June 2007 before the Toronto Land Transfer Tax went into effect to the same period in June 2006, a period showing a 21% increase in sales.

 

In the 905 Region, the scenario was similar. In the first two weeks of June, 2,641 properties were sold. This represents a 13% decline compared to the 3,029 homes sold in the first half of June 2007 but an 11% increase over the 2,384 properties sold at mid-June 2006. When you compare the first half of June 2007 to the same period in June 2006, sales increased by 27%.

 

Certain communities including Riverdale, West Agincourt, Caledon and Richmond Hill South experienced strong activity in the first half of this month.

 

With employment and interest rates holding steady and a 17% increase in available listings compared to a year ago, it is an ideal time to take advantage of all that the market has to offer.

Bad U.S. News Doesn't Faze Consumers

 

Consumers are knowledgeable about the housing market but not influenced by the speculation that the Canadian economy will be negatively affected by the U.S. economic downtown, according to a report released by the Canadian Association of Accredited Mortgage Professionals. The report is based on information gathered in an online survey in April.

 

The report says that Canadians have shown themselves to be keen observers of the fallout from the suprime mortgage meltdown in the United States. Only 11% of those surveyed said they were not at all aware of the U.S. housing crisis, down one-half compared to 22% who were not aware in the fall of 2007. Armed with this knowledge, Canadians view their own housing market through the lens of economic conditions and house prices in their own communites. One-third of respondents said now was a good time to buy a house, one-third said it was not a good time, and one-third were neutral.

 

This report indicates mortgage consumers are educated, informed, and attuned to local market conditions. Canadians are aware of the strength of the economy and remain confident in our housing and mortgage markets.

 

Canadians have yet to react to suggestions that the economy will soon start feeling the impact of higher energy and food prices, and that Ontario is hovering close to a recession. Job creation in Canada is still very strong. Moreover, the housing market doesn't respond immediately to swings in employment; it takes people time to react to changes in personal circumstance. Even if recent forecasts are right and the labour market in Canada should start to weaken, momentum from past job creation should result in continued strong housing demand well into 2009.

 

The report says the arrears rate for residential mortgages remains close to the low levels that have held since mid-decade, about one quarter of a per cent. Canada has not experienced the sharp increase in arrears and defaults that has occured in the United States.

 

- REM

 

 

TERM           POSTED              BEST

1 Year          6.95%               5.10%

3 Year          7.00%               5.25%

5 Year          7.15%               5.60%

7 Year          7.60%               5.55%

10 Year        7.95%               5.65%

Variable                               3.75%

Prime Rate          =  4.75%

  *Rates are subject to change without notice

(Mortgage rates provided by Kim Gibbons, AMP & Mortgage Consultant, Mortgage Intelligence www.kimgibbons.com