Sales and prices continue to wane, with no sign of a turnaround on the way
Toronto’s long-suffering housing market is showing no signs of a late-year rebound, posting lower sales and prices across most segments as the condo market sank further into the abyss in October.
Overall sales were down by 7.9% last month compared with the same time last year, according to new Toronto Regional Real Estate Board (TRREB) data, while new listings also plunged – suggesting seller confidence is continuing to sink.
The crisis-struck condo sector, meanwhile, keeps plumbing new depths. Sales slid by 2.7% across the city and its outskirts, and average condo prices fell by 6% in the city centre and 8.8% in the wider 905 area.
Homebuyer doubts remain despite lower prices
Buyers who want to move now are finding their best opportunity in years, but consumer confidence is still sorely lacking in the current market, according to Toronto-based mortgage broker Micky Khaneka (pictured top) of Team MKG.
“Homes are sitting on the market for much longer than they were before. So it’s pointing towards a better opportunity for buyers, but we know now that it’s not just the numbers that make the buyers move – it’s the sentiment and the confidence in the market,” he told Canadian Mortgage Professional.
“And I think that’s something that’s still missing. Would it change over the next six to seven months? I certainly think it should. But everything now is just pointing towards buyers getting more selective – rightfully so.”
While the current market is a good one for buyers who are ready to move, that picture is flipped for homeowners who want to sell their property to take their next steps. With most buyers still staying on the sidelines, there’s no guarantee that even a high-quality home will change hands quickly after it’s been listed.
“I feel that a lot of [sellers] are just sitting in the market,” Khaneka said. “They have no choice. They’re facing a lot of downward pressure: if they want to actually move their homes, they’re going to have to either really drop the price or be open to accepting offers or entertaining buyers that otherwise they wouldn’t have.
“I think it’s nice to see that the market is approaching more of a balanced side, [but] where I see a bit of a sad situation is anyone who’s bought in the last four or five years and is now trying to exit… they’re stuck in a very bad place because the equity has completely dwindled and now they’re almost at a chokehold where you can’t afford to drop the price any lower, because any lower means you’re going to be out of pocket with what the debt outstanding per house is.”
Striking the right balance a tough call in Toronto market
Almost all home types posted lower sales last month – although among detached properties, sales were 1.1% higher in the city centre and up 0.3% across the 905, even as prices dipped further.
Still, TRREB chief executive officer John DiMichele highlighted possible positive signs ahead for the housing market, including a brightening affordability outlook.
“While we continue to experience shorter-term volatility in the ownership housing market, we can’t lose track of the fact that the permanent population will continue to grow in our region,” DiMichele said.
“Policy announcements, including HST rebates and development charge reductions should help bring a greater diversity of ownership and rental supply online in the medium-term to ensure new families are properly and affordably housed.”
For Khaneka, the ideal market would be one that achieves a better balance between buyers and sellers – with buyers able to find affordable housing and sellers not having to wait so long for their property to find a bidder.
“I’m just hopeful that we can get a little bit of momentum back in the market, have a little bit of a balanced market where people can make decisions based on what they can afford – not necessarily based on speculation or what’s happening because someone else made money in real estate and made decisions that are no longer serving them well.”
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