January 19, 2009

TORONTO — Greater Toronto REALTORS released their sales figures for the first two weeks of January and at first blush the numbers are grim. The group reported just 888 resales in the Greater Toronto Area, exactly half the number of units sold during the same two-week period last year.
Upon further review, however, there is at least a faint glimmer of hope that the worst may be over for the Queen City. As devastating as a 50 per cent drop off is, it's actually up from the 55 per cent drop off experienced between December 2008 and 2007.
Toronto Real Estate Board president, Maureen O'Neill, finds further solace in the thought of how the city's new land transfer tax may have skewed all these numbers.
"Sales for January a year ago may have been elevated by the flurry of transactions completed before the city's land transfer tax went into effect," O'Neill said in a press release.
The lack of resales has led to an increase in the number of listings in the market, which in turn has driven down price. The average sale price through mid-January dropped 9.5 per cent from the same point last year in the G.T.A., while the median dropped just under five per cent. That's a rather modest decrease when compared to the precipitous drop off in sales. Here again, O'Neil points to the new tax as exacerbating the situation.
"The costs of home ownership in the 416 has increased due to the added land transfer tax many home buyers now face in the City of Toronto," said O'Neil. "Some households considering the purchase of a home in the City have either put their decision on hold or looked elsewhere in the G.T.A."