Experts forecast: The storm has passed

by Justin da Rosa on 08 Sep 2017
Toronto was believed to be in the midst of a correction; but some industry veterans argue it’s on its way back up.

“I think what we’ve seen in the last number of months is the market pausing to digest a number of measures that have been put in place. Also, what we saw in the spring is a robust increase in the number of properties being offered for sale,” Brad Henderson, CEO and President of Sotheby’s International Realty Canada, told REP. “That was a good thing because, for the most part, a lot of people were not selling their homes for fear they wouldn’t be able to buy something else. They knew they would get a good price for their home but then they would be stuck in some bidding wars because of the lack of product.”

The Toronto Real Estate Board announced earlier this week home sales had fallen 34.8% year-over-year in August and that listings dropped 6.7%.

However, the market has likely bottomed out, according to the Royal Bank of Canada.

“Those worried about a collapse in Toronto’s housing market can be breathe a little easier now. Home resales probably bottomed in July if the data for August released today by the Toronto Real Estate Board is any indication,” Robert Hogue, RBC senior economist, wrote in his latest report. “Resales continued to fall relative to a year ago in August (down 34.8%) but the annual decline was the smallest in three months. This implies that on a seasonally-adjusted basis Toronto-area resales increased month over month in August (our rough estimate is 9%) for the first time since March.”

And that’s good news for a market that has been impacted by last year’s mortgage rule changes as well as a housing plan that has tempered demand since the beginning of summer.

Hogue’s analysis is shared by another industry veteran.

“Absolutely we’re forecasting that (the market has bottomed out),” Dianne Usher, SVP of Johnston and Daniel, a division or Royal LePage, said. “We’re starting to see it in increased inventory and increased buyer activity, anecdotally. Markets all across the country are all very, very strong.”

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