Photo: James Bombales

Last week, a new report from Realosophy found that some GTA home sellers lost $140,200 in property value when home prices took a 18 per cent dive last spring. But according to one economist, the situation is more complicated than it first appears.

“An item on Toronto housing generated some small buzz this week, as it suggested that the pullback in GTA home prices has outpaced the speed of decline in any US city during the 2006-2009 meltdown,” writes BMO chief economist Douglas Porter, in recent note, mentioning the Realosophy report.

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“The facts here alone are debatable, but can we also have maybe an ounce of perspective?” he asks.

Porter writes that, over the course of 2017, the Toronto market went from “lofty expensive” to “out-of-the-universe-crazy” back down to “just lofty expensive.” That means that while things have cooled considerably from March 2017’s record breaking numbers, the market is still arguably hotter than it should be.

“The gaudy headlines on [the recent] Canadian home sales report for March — sales volumes down 22.7 per cent year-over-year nationally, average prices down 10.4 per cent — are comparing conditions to the insanity in the spring of 2017,” writes Porter. “From two years ago, the MLS price index for Toronto…is still up more than 20 per cent.”

Porter writes that while it is true that some sellers lost money when prices dropped in April, after the introduction of the province’s Fair Housing Plan, the bigger picture is that the market still has a long way to go before it is affordable for the average buyer.

“The froth was rapidly blown off the top, and some were badly caught offside, but the bigger picture is that the housing market is arguably still too lofty for comfort,” he writes. “At least for policymaker and potential buyer comfort.”

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