The summer might be hot but Toronto’s real estate market is not.
In most regions and neighborhoods average sale prices were down month-over-month as some plummeted by more than 31 per cent due to low sales activity.
In July, the GTA’s housing market continued to soften as home prices dropped for a fifth consecutive month. But regions like Oakville saw a boost in prices from more expensive property sales, while most regions saw prices slump.
Leaside, a family oriented neighborhood straddling Bayview Avenue, saw a more than 31 per cent drop from drastically low sales activity, while Oakville saw a more than six per cent jump in prices, according to the latest figures from the Toronto Regional Real Estate Board ( TRREB).
A significant reason for the variability in home prices across the GTA is low sales activity — in July there was a 47 per cent drop in sales across the region. With fewer sales, average sale prices declined, real estate experts say. And another Bank of Canada rate hike expected in September is continuing to make prospective buyers wait on the sidelines for the market to settle, especially after the one per cent increase on July 13, they also note.
“In September we might see a slight pickup in demand but we don’t know what the volume of listings will be and that determines the activity in the market,” said John Pasalis president of real estate brokerage Realosophy. “But I suspect it will still be sluggish even if buyer demand is back. We will not be back to crazy bidding wars seen in early 2022.”
Prices may plateau or continue to face downward pressure, he added.
While the average selling price for all houses and condos in the GTA was actually up 1.2 per cent compared to July 2021, to $1,074,754, that average is down more than $255,000 compared to the February market peak of $1.33 million, making it the fifth consecutive monthly decline.
Pasalis said buyers and sellers need to do their homework.
“Buyers need to look at comparables for the last week or two, not two months ago as prices have changed drastically,” he said. “Prices also change depending on neighbourhood, as it’s different from region to region.”
Sales prices and volumes varied throughout the GTA:
Leaside—Thorncliffe Park—Flemingdon Park
The Leaside area experienced the largest average sales price decline at more than 31 per cent to $1.07 million in July from $1.56 million in June.
The drop can largely be attributed to a significant decline from 40 sales in June to 13 sales in July, said Karen Yolevski, Royal LePage’s chief operating officer, corporate brokerages.
“You’re seeing buyers assessing the impact of interest rates and are taking a wait-and-see approach,” she said. “That’s why we’re seeing this decline in July.”
Another reason is July and August are typically slow sales months in the real estate market as people go away on vacation, Yolevski said. In Leaside, which is family oriented, many people are away or focusing on summer vacation with family.
“People don’t transact as much in the summer, so we expect it to pick up again in September.”
North York—Clanton Park—Bathurst Manor
In North Toronto the month-over-month average sales price dropped by more than 27 per cent. The average price fell from $1.22 million in June to $888,000 in July. There were also six fewer sales in the area from during the same period.
“There were a lower number of sales,” said Cailey Heaps, CEO and broker of record at The Heaps Estrin Team. “And the homes that did sell, sold for less.”
In June, 16 detached homes sold, but in July it was only five — and those five were the only properties that sold over the $1 million mark.
The Annex—Yonge—St. Clair
The Annex area saw a significant decrease in the average sales price month-over-month by more than 23 per cent bringing the average sales price to $1.63 million in July from $2.12 million in June.
There were eight fewer sales, which included no sales being above the $5 million mark, Heaps said. While in June, the area saw a more than 20 per cent jump due to expensive homes being sold.
Condo apartments and semi-detached homes made up the majority of the sales in the area, Yolevski said. These properties are typically less expensive than detached homes, bringing down the overall price.
However, in June, the median price was $1.6 million, which is similar to the average price in July, Yolevski said. That means, the more expensive properties skewed the higher June numbers, accounting in part for the significant drop in July.
Oakville was one of the few GTA regions that saw the average sales price increase from June by more than six per cent bringing the price to $1.52 million in July from $1.43 million the month before.
“In Oakville there is not enough supply for buyers putting an upward pressure on prices,” said Alex Irish, team lead and sales representative of Alex Irish & Associates. “The higher end of the market is also impacted less by interest rate hikes.”
There’s more choice in the high-end market generating more sales, she said. In the prime location of southeast Oakville, it’s difficult to buy homes for less than $5 million, she added.
“When sales activity is down that’s when you see wealthier buyers come out,” Irish said. “They like a quieter market because they don’t like to compete and can be more discreet with their purchases.”
Overall in the GTA prices are appreciating annually, and in 10 years, properties have appreciated by 130 per cent, Yolevski said.
“People who are in the market, and have been it for sometime, are benefitting,” she said.
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