The latest report from the Toronto Regional Real Estate Board (TRREB), released earlier this month, reveals that the number of housing sales increased in July, compared to the same period in 2022, after some uncertainty for a few months. The organization saw 7.8 percent more sales last month, meaning with an average price of $1,118,374 compared to $1,073,213 in July 2022, the average price has dropped significantly. So far in 2023, 43,908 homes have been sold in GTA and the average price was $1,141,260. To comment on these prices invited Carla Coris, real estate agent. Very welcome Carla !!!
What are your comments on these numbers?
Despite the interest rate increases and the slower months. Average home prices are up since last year by 4.2% which is a good indicator of a healthy market. Home sales are also up 7.8% which tell us that many people are still very motivated to buy. There 11.5% more listings, than last year but still not enough in relation to the number of buyers looking for home ownership. We are definelty in a balanced market.
Does the real estate market typically react this way during the summer?
The summer months are normally slow. Compared to June we are down in sales -8.8% but that’s because people are enjoying summer, travelling and not thinking about buying or selling. Prices have come down slightly since June due to these seasonal factors. The interest rate increase also played a part, buyers are just not interested right now. Despite this, days on market is down which means the buyers that are active are moving a little quicker than they have.
We’ve also seen condominium prices decrease in the GTA – the largest reduction in the last decade. Could you comment on that?
What is down is PRECON prices, many people aren’t buying them like they used to.
Resale Condos sales were up sharply since last year, 20%. There is a lot of competition amongst buyers for properties in that condo price point. With average rents up so high many people are turning to condos for ownership. Compared to last year, prices are down slightly by 4.2% which has helped people with affordability
Has the price of mortgages impacted sales in July.
Yes, the interest rate increase impacted affordability, some people are still uncertain of the economy, higher priced homes are seeing longer days on market, resulting in price reductions especially in the higher priced homes. Lack of choice also impacted sales, there isn’t enough options causing buyers to not move forward with purchasing – this is also driving sellers to drop prices.
What other factors should we consider regarding these numbers?
Ban on foreign buyers, lack of confidence in the economic status (unsure of interest rates) lack of inventory, government policies, and the time of year all impact the real estate market.
What is the expectation for the real estate market in September?
The fall market historically has always seen an increase activity in the fall. Everyone is back from holidays, kids are back in school buyers are motivated to be in their new homes by Christmas. Usually there is an increase in activity.
Are we anticipating another increase in interest rates?
On September 6 we will learn if there will be another increase. Nobody really knows.
Will this impact sales in certain home types?
Yes, those that used to be able to afford a detached may have to consider a semi or a town to continue with home ownership goal.
When is the best time to buy a house?
Best time is when the buyer is ready. You cannot time or predict the market. Usually in a down or slow market is where the best opportunity lies, so if now is a time that you want to buy – buy. Nobody has a crystal ball. The wisest investors always dive in when everyone else is doing nothing.
Some buyers have been seen renegotiating their mortgages – what advice do you give to buyers?
They have to assess their situation carefully with a trusted mortgage broker to see if that’s the best thing for them to do. Research their options on the various products, look at their costs vs savings, compare offers, make sure their credit score is still very good as it can affect their abilities to get the best rates.
Is the Canadian dream of owning a home now more distant?
Many people think it is since there is so much negative attention on prices and the cost of borrowing. I am am optimist, and I think if you align yourself with the creative and experienced Realtor and Mortgage Broker there are ways to get to their dreams of ownership.
There seems to be other options for home ownership such as Pre-Constrution. What are your thoughts on that? It seems to be advantageous for first time home buyers.
I really enjoy offering this option of ownership. Pre-constructions offers a great opportunity for various reasons, primarily you don’t need the 20% deposit right up front. Many people today maybe can afford the payments but it’s the down payment that they are having difficulty coming up with, they simply don’t have it sitting in a bank account. The deposit structure with precon is stretched out over a period of time which really helps buyers out, secondly you are buying at today’s prices for future value. It’s ideal for those buyers that aren’t in a great hurry and would prefer to save up in between the deposit payments. The appreciation over time makes it a great investment. With such high numbers of immigration expected home availability will continue to be an issue, investors can lease their units out if they don’t want to be end users. It is expected that the demand vs supply will continue to be an issue.
For those that just can’t seem to afford living in the GTA are there other options you recommend?
Yes, once I learn what their pre-approval amount is I start suggesting various areas that work with their budget and needs. Right now, areas that are expanding and in some parts revitalizing such as Hamilton, Kitchener, waterloo, Cambridge are all great options. Hamilton got approved for a new LRT system and the GO train connects to union station from these are which help communing into the city. If they sacrifice a little bit relocating outside the GTA there is a lot of opportunity. Buyers need to feel comfortable with their monthly expenses and if moving outside the GTA accomplishes their goals than it’s a great idea. They can always move back once they build up that equity.
However, there are other alternatives: Saint John in New Brunswick and also Regina in Saskatchewan have the most economical average prices in Canada. Is this a solution for those who dream of owning a home?
They might offer more affordable housing but there are factors to consider if that’s the right solution for their home ownership dream. Economic factors, job opportunities, quality of life, potential future growth and personal circumstances are all very important before making that decision. It’s a good idea for anyone considering moving to consult with a local real estate expert who can advise on those markets. If buyers need to move out there because it makes financial sense they that’s what they will do. Has to make sense.
Is there any speculation that the market is going to calm down in the near future?
No one knows what the future holds but for those that are just waiting they will miss some great opportunities. You can’t time the market or your life. Markets are always up and down, there are many factors that impact how high or low it goes but one thing is certain, real estate over the long run always goes up regardless. The cost of a house costs more now that 5, 4 or 3 years ago. You can’t always look at month to month, you have to look at it year to year. For those that keep waiting, they’ll just keep losing.
There just isn’t enough choice for buyers, which is expected to continue. For that reason, it is inevitable that prices will continue to go up at a healthier pace.