Greater Toronto: Is this the bottom?

September 26, 2017

Sherry Cooper, chief economist, Dominion Lending Centres: GTA housing August sales saw the first “pop” since April.

At least one analyst is seeing the bottom of Greater Toronto ’s resale housing market after August sales plunged 34.8 per cent from August of 2016, and prices fell 20 per cent from the nearest peak to just over $919,000.
This is the lowest price point this year, according to the Greater Toronto Real Estate Board (TREB).
But, notes Sherry Cooper, chief economist at Dominion Lending Centres, the benchmark home price was up 14 per cent in the city of Toronto, up 11.4 per cent in Oakville-Milton and 19.5 per cent higher in Guelph, compared to the same time last year.
Cooper also noted the increase in GTA house sales in August from July, up 1.3 per cent.
“The pop in sales in the GTA was the first monthly rise since the April announcement of the Ontario Fair Housing Policy,” Cooper said.
TREB added that the overall August average home price had increased 3 per cent from August of 2016.
These are positive indications possibly pointing to an early sign that the decline is ending, some analysts suggest.
“Our view is that the market has largely adjusted to Ontario's Fair Housing Plan and should maintain balance between supply and demand,” RBC economist Robert Hogue wrote in a September 18 report.
“Developments in Vancouver—which went through a similar policy-induced market correction last year—suggest that the bottom for prices may be near in the Toronto area,” Hoque wrote.
Jason Mercer, TREB’s director of market analysis, shares that cautious confidence, noting the GTA market is seeking “balance.”
“If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation,” Mercer said.