While GTA sales are down a third, the industry takes some comfort as the rate of decline eases
From Friday's Globe and Mail
March 6, 2009 at 4:14 AM EDT
TORONTO A decline of a third in home sales isn't usually considered good news. But compared with the figures for the previous two months, February's drop of 32 per cent actually is a glimmer of hope for the Greater Toronto Area's battered real estate market.
December and January posted sales declines of 45 and 47 per cent, respectively, from a year earlier. Prices also were down.
Yesterday, the Toronto Real Estate Board reported that the rate of decline had slowed in February.
In 2008, 6,015 housing units changed hands at an average price of $382,048. In 2009, that dropped to 4,120 homes sold at an average price of $361,305.
"A considerable number of transactions continued to take place," president Maureen O'Neill said. "Motivated buyers and sellers, who were aware that market conditions changed over the past few months, were able to negotiate transactions acceptable to both parties."
A general slowdown in the economy and Mayor David Miller's controversial land-transfer tax kept would-be home buyers on the sidelines in December and January, said Jason Mercer, senior manager of market analysis at the real estate board.
But now that the bidding wars of recent years have ended, buyers are more likely to find what they're looking for at more affordable prices.
"The one thing that we have seen is an improvement in affordability in the resale market," Mr. Mercer said. "When we do see some economic recovery ... as we start to see the impact of a stimulus package both in Canada and the United States, what that points to is the housing market should turn around fairly quickly."
Until then, potential home buyers are taking their time before making an offer. Homes that sold in February, 2008, had been the market for an average of 30 days. Those that sold last month were listed on average for 45 days.
Sellers, too, were in no rush to put their homes on the market, as the number of listings last month dropped 11 per cent compared with February, 2008.
The real estate board argued that while the economy has affected sales, the housing market is on a solid footing. The spring market experiences more activity, and with low mortgage rates and strong immigration, the rate of sales declines should continue to slow, it said.
But with home prices falling, builders are also stepping back.
The value of building permits dropped by 12.9 per cent in the Toronto area to $953-million in January compared with about $1.1-billion a month earlier, according to a separate report yesterday from Statistics Canada.
The decline came from the residential sector, and offset increases in commercial and institutional permits, the agency noted.
By the numbers