Real estate markets across the Greater Toronto Area tumbled further in July, with home resales dropping 47 per cent compared to July 2021, the Toronto Regional Real Estate Board (TRREB) reports.
Sales were also down 7.3 per cent from June on a seasonally adjusted basis. New listings dropped by a more moderate four per cent on a year-over-year basis in July. TRREB predicts the trend for new listings will continue to follow the trend for sales through the second half of 2022 and into 2023.
Market conditions remained much more balanced in July compared to the previous year. As buyers continued to benefit from more choice, the annual rate of price growth has moderated. The MLS Home Price Index Composite Benchmark was up 12.9 per cent year-over-year and the average selling price was up 1.2 per cent compared to July 2021 to $1,074,754. Less expensive home types, including condo apartments, experienced stronger rates of price growth as more buyers turned to those segments to help offset the impact of higher borrowing costs.
In York Region, 820 homes exchanged hands last month and the average selling price was $1,274,911. Here’s the average selling price by municipality: Aurora ($1,371,558), East Gwillimbury ($1,160,573), Georgina ($863,163), King ($1,664,046), Markham ($1,233,512), Newmarket ($1,126,666), Richmond Hill ($1,443,055), Vaughan ($1,285,860) and Stouffville ($1,256,339).
Though rapidly increasing mortgage rates have resulted in more balanced markets, it’s not time to take the foot off the gas pedal when it comes to new home construction. “With savings high and the unemployment rate still low, home buyers will eventually account for higher borrowing costs,” TRREB Chief Market Analyst Jason Mercer maintains. “When they do, we want to have an adequate pipeline of supply in place or market conditions will tighten up again.”
The central bank’s benchmark interest rate is now 2.5 per cent compared with 0.25 per cent in early March. TRREB is calling on all levels of government to reassess and clarify policies related to mortgage lending. “Consumers looking to renew their existing mortgages with a different lender should not be subject to an additional stress test burden beyond what they would face with their existing lender,” says TRREB CEO John DiMichele.
TRREB is also pitching the idea of longer-term mortgages. “The federal government has a responsibility to not only maintain confidence in the financial system, but to instill confidence in homeowners that they will be able to stay in their homes despite rising mortgage costs,” TRREB President Kevin Crigger adds. “Longer mortgage amortization periods of up to 40 years on renewals and switches should be explored.”
Photo courtesy of Royal LePage.
