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Has Toronto’s Real Estate Turned Into A Buyers’ Market?

ByThe National Bank of Canada
Published 09/19/2012, 06:11 AM
Updated 05/14/2017, 06:45 AM
IMOB
-0.46%

Today, the Toronto Real Estate Board (TREB) reported that home sales in the Greater Toronto Area (GTA) in the first 14 days of September were down 15% compared to the same period in 2011. New listings were up 14%. Assuming these percentages to be representative of the whole month, let’s apply them to the seasonally adjusted GTA sales and new listings as published by CREA for September 2011. As a result, September 2012 sales would be up about 1% from last August, but new listings would surge almost 18%. This means that market conditions, as depicted by the newlistings- to-sales ratio, worsened so far in September. As today’s Hot Chart shows, the Toronto market, which was considered tight up to last April, would now be considered slightly favourable to buyers. Opinions may vary on where the threshold of a buyers’ market actually is, but in any event, the new-listings-to-sales ratio would be the worst, outside a recession, since April 1995. Furthermore, the fact that sales are not set to regain the ground lost in August (-7.8% in GTA and -5.8% nationally) supports our view that the new regulation which, among other things, reduced the maximum amortization period of new government-backed insured mortgages from 30 to 25 years, has succeeded in cooling the market.
Has Toronto’s Real Estate Turned Into A Buyers’ Market

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