Ann Hannah – Toronto Star

A moderate number of resale home transactions took place throughout the GTA in November, with 5,793 homes changing hands. This represented a 16% decrease from 6,908 sales in November 2011.

In Toronto, 2,308 transactions took place last month compared to 2,952 sales a year ago, a decline of nearly 28%. Meanwhile, 3,485 homes changed hands in the 905 regions, a decrease of more than 13% from 3,956 sales in November 2011.

A key factor that has influenced the dip in sales is because of the changes in mortgage lending guidelines that came into effect in July. The changes reduced the maximum amortization period from 30 years to 25 years and set a purchase price ceiling for government-backed insured mortgages at $1 million. These regulations have resulted in some households putting their decision to purchase on hold while they save up more money for a down payment and/or experience an increase in their income.

Adding to this situation in the City of Toronto is the additional Land Transfer Tax, which takes money from homebuyers that could otherwise be used to offset the high costs of home ownership.

While sales decreased year-over-year in November, a modest overall price increase was reported with the average price of a GTA home reaching $485,328. This represented an increase of 1.6% compared to a year ago.

The 905 regions, with an average price of $463,779, showed a price increase of 4% compared to a 0.5% decrease in the City of Toronto average home price, which was $517,866.

The pace of average price growth in November was slower than what was experienced for much of 2012, especially in the lowrise segment of the market. This was largely due to the fact that the mix of single-detached homes sold in Toronto in November changed relative to last year. Specifically, the share of homes that sold for over $1 million was down considerably.

While the mix of home types sold may have changed, market conditions remained tight for lowrise home types. This is evident when we consider the GTA’s MLS Home Price Index (HPI), which tracks the price change for benchmark homes – in other words, a home with the same attributes over time. When we look at price through this lens, we find that the benchmark price for major home types was up by 4.6% in the GTA as a whole and 3.9% in Toronto.

News on the employment front was positive in November, as the Toronto seasonally adjusted unemployment rate decreased to 8.2% from 8.6% the previous month. Interest rates remain largely unchanged, with a five-year fixed-rate mortgage of just over 3%.

At this time of year I am often asked whether it is prudent to list one’s home for sale and there are, in fact, many benefits to doing so. Consider that those viewing homes at this time of year are more likely to be serious buyers. As well, homes often look their best when they are decorated for the holidays and a favourable emotional response to a property often prompts an offer.

I encourage you to talk to a Greater Toronto realtor about the many other factors you should consider before choosing to make your next move.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.
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