Condo prices jump 10%, while detached home prices fall 10%
Source: FInancial Post, Erik Hertzberg and Natalie Wong
Spring has finally sprung but Toronto’s home sales remain gloomy as tougher mortgage qualifications and rising interest rates continue to push buyers out of the market.
Realtors in Canada’s biggest city had one of their worst months in the past 15 years in April, with sales down by almost one-third from a year earlier to 7,792 units, according to data released Thursday by the Toronto Real Estate Board. That’s the fewest number of sales for April since 2003. On a seasonally-adjusted basis, sales have fallen for four straight months, with the fewest transactions to start a year since the 2009 recession.
Prices continued to stabilize with benchmark prices, which are weighed to account for differences in home type, rising 0.7 per cent from last month. The condo apartment segment helped boost prices, jumping 10 per cent to $495,600 from a year ago. In contrast, detached home prices tumbled 10 per cent to $927,800 from April of last year.
Canada’s once-hot housing market has been correcting in recent months, adjusting to a series of tighter regulations aimed at taming booming prices and debt levels. Sales have cooled particularly for the city’s more pricey detached homes, as new mortgage guidelines that came into effect on Jan 1. make it harder for buyers to qualify for loans. The slowdown has put the market on edge as it enters its traditionally busy spring selling season.
“Market conditions should support moderate increases in home prices as we move through the second half of the year, particularly for condominium apartments and higher density low-rise home types,” Jason Mercer, TREB’s Director of Market Analysis said in a statement.
The high-end of Toronto’s housing market continued to suffer on declines from last year’s boom. Detached home sales at $2 million or more was 5.5 per cent of total sales in the segment, down from 10 per cent a year ago.