Photo: James Bombales

After a summer of slumping prices, the GTA housing market seems to have balanced out, as it continues to adjust to the effects of the province’s Fair Housing Plan.

According to the Canadian Real Estate Association (CREA), national home sales rose 0.9 per cent in October, a modest increase that remains well below the record levels set in March.

“The GTA has become a far more balanced market than it was a year ago,” CREA chief economist Gregory Klump tells BuzzBuzzNews. “What we have to look at is the possible effects of the new mortgage stress test. I anticipate an increase of sales in the fourth quarter, as buyers try to buy before the rules come into effect, followed by a slowing of sales when they do come into effect in the new year.”

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Last month, a new mortgage stress test was announced for January 1. Uninsured mortgage borrowers will be required to qualify against the Bank of Canada’s five-year benchmark rate, or at their contract mortgage rate plus and additional 2 per cent.

According to North American RE/MAX Integra CEO Pamela Alexander, while the new rules may affect the market in the new year, they’ve had relatively little impact on sales so far.

“We’re not seeing a huge spike of people rushing to buy before the rules come into effect” she tells BuzzBuzzNews. “I think what we’re seeing is a slight rise in sales, as sellers return to the market, but overall it’s a balanced market with steady growth.”

Here are 10 facts that show how the GTA’s housing market has balanced out in the last month:

1. National home sales rose 0.9 per cent from September to October, marking a third consecutive increase, but still down year-over-year.

2. The increase was largely attributable to Ontario, which rose 2.5%. The GTA rose 2.5%, Thunder Bay rose 16.5%, Niagara 8.8% and Hamilton 6.6%.

3. October home sales remained 11 per cent below the record set in March. Actual activity sat 4.3 per cent below last October’s level.

4. The number of newly listed homes rose 0.8 per cent from September to October, down from a 5 per cent increase from August to September.

5. While nationwide new listings fell by 0.8%, the listings in the GTA rose slightly by 0.2%.

6. The MLS Home Price Index (HPI) was up 9.7 per cent year over year, the smallest increase to the HPI since March 2016.

7. Ontario’s HPI was up 1.1% marking a fourth consecutive monthly gain, but a significant decrease year-over-year.

8. The national sales-to-new-listings ratio rose to 56.7 per cent in October, from 55.7 per cent in September. A ratio of between 40 and 60 per cent is considered a balanced market.

9. There was 2.5 months of inventory in the GTA in October, representing the number of weeks it would take to liquidate current inventories at the current rate of sales activity. This up from an all-time low of 0.8 months of inventory in March.

10. CIBC Senior Economist Benjamin Tal predicts that the new mortgage rules could take 1-2 per cent out of national home sales in the new year.

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