Borrowing Costs and Housing Supply Impacting the GTA Real Estate Market

Toronto Regional Real Estate Board

TRREB Calls for Longer Amortization Periods and More Flexible Stress Test

TORONTO, Sept. 02, 2022 (GLOBE NEWSWIRE) — There were 5,627 home sales reported through the Toronto Regional Real Estate Board’s (TRREB) MLS® System in August 2022, representing a year-over-year dip of 34.2 per cent – a lesser annual rate of decline compared to the previous four months. The August sales result also represented a month-over-month increase compared to July.

Sales represented a higher share of new listings compared to the previous three months. If this trend continues, it could indicate some support for selling prices in the months ahead. On a year-over-year basis, the MLS® Home Price Index (HPI) was up by 8.9 per cent and the average selling price for all home types combined was up by 0.9 per cent to $1,079,500. The average selling price was also up slightly month-over-month, while the HPI Composite was lower compared to July. Monthly growth in the average price versus a dip in the HPI Composite suggests a greater share of more expensive home types sold in August.

“While higher borrowing costs have impacted home purchase decisions, existing homeowners nearing mortgage renewal are also facing higher costs. There is room for the federal government to provide for greater housing affordability for existing homeowners by removing the stress test when existing mortgages are switched to a new lender, allowing for greater competition in the mortgage market. Further, allowing for longer amortization periods on mortgage renewals would assist current homeowners in an inflationary environment where everyday costs have risen dramatically,” said TRREB President Kevin Crigger.

“The Office of the Superintendent of Financial Institutions (OSFI) should weigh in on whether the current stress test remains applicable. Is it reasonable to test home buyers at two percentage points above the current elevated rates, or should a more flexible test be applied that follows the interest rate cycle? In addition, OSFI should consider removing the stress test for existing mortgage holders who want to shop for the best possible rate at renewal rather than forcing them to stay with their existing lender to avoid the stress test. This is especially the case when no additional funds are being requested,” said TRREB CEO John DiMichele.

“There are other issues beyond borrowing costs impacting housing affordability in the Greater Golden Horseshoe. The ability to bring on more supply is the longer-term challenge. However, we are moving in the right direction on this front. The strong mayor proposal from the province coupled with the recent commitment from Toronto Mayor John Tory to expand ownership and rental housing options are examples of this. TRREB looks forward to hearing additional initiatives from candidates vying for office in the upcoming municipal elections,” said TRREB Chief Market Analyst Jason Mercer.

Summary of TRREB MLS® System Sales and Average Price August 1–31, 2022

 

2022

2021

 

Sales

Average Price

New Listings

Sales

Average Price

New Listings

City of Toronto (“416”)

1,892

1,031,979

3,785

2,988

999,510

4,212

Rest of GTA (“905”)

3,735

1,103,573

6,752

5,561

1,108,184

6,403

GTA

5,627

1,079,500

10,537

8,549

1,070,201

10,615

TRREB MLS® System Sales & Average Price by Home Type August 1–31, 2022

 

Sales

Average Price

 

416

905

Total

416

905

Total

Detached

511

2,084

2,595

1,648,298

1,313,839

1,379,700

Yr./Yr. % Change

-26.0%

-30.3%

-29.5%

-1.7%

-3.7%

-3.1%

Semi-Detached

159

367

526

1,127,429

942,628

998,490

Yr./Yr. % Change

-29.6%

-28.7%

-29.0%

-7.3%

-1.1%

-3.4%

Townhouse

182

753

935

913,410

897,140

900,307

Yr./Yr. % Change

-44.0%

-35.9%

-37.7%

0.4%

3.7%

2.9%

Condo Apartment

1,028

479

1,507

736,940

656,339

711,321

Yr./Yr. % Change

-40.6%

-40.5%

-40.6%

2.6%

6.0%

3.6%

August 2022 Year-Over-Year Per Cent Change in the MLS® HPI

 

Composite (All Types)

Single-Family Detached

Single-Family Attached

Townhouse

Apartment

TRREB Total

8.85%

6.45%

8.38%

11.79%

17.87%

Halton Region

1.66%

0.62%

1.47%

3.46%

11.38%

Peel Region

10.65%

9.59%

8.70%

13.17%

19.44%

City of Toronto

9.76%

4.99%

7.23%

15.18%

17.61%

York Region

11.52%

9.12%

13.28%

15.45%

20.83%

Durham Region

6.99%

6.39%

7.16%

11.66%

18.31%

Orangeville

8.72%

7.20%

8.71%

17.65%

27.97%

South Simcoe County1

9.30%

9.03%

10.90%

12.10%

20.73%

Source: Toronto Regional Real Estate Board       

1South Simcoe includes Adjala-Tosorontio, Bradford West Gwillimbury, Essa, Innisfil and New Tecumseth   

Please note the methodology used to calculate MLS® HPI has been changed. For more information, click HERE.

Year-to-Date Summary of TRREB MLS® System Sales and Average Price August 2022

 

2022

2021

 

Sales

Average Price

New Listings

Sales

Average Price

New Listings

City of Toronto (“416”)

21,231

1,165,794

41,772

30,359

1,042,507

45,742

Rest of GTA (“905”)

36,444

1,258,251

76,482

57,536

1,089,770

80,393

GTA

57,675

1,224,216

118,254

87,895

1,073,445

126,135

YTD TRREB MLS® System Sales & Average Price by Home Type August 2022

 

Sales

Average Price

 

416

905

Total

416

905

Total

Detached

5,748

19,894

25,642

1,860,675

1,522,968

1,598,670

Yr./Yr. % Change

-28.6%

-38.3%

-36.4%

9.9%

15.0%

14.4%

Semi-Detached

1,939

3,404

5,343

1,421,261

1,109,189

1,222,442

Yr./Yr. % Change

-30.3%

-36.4%

-34.3%

11.1%

19.5%

16.6%

Townhouse

2,128

7,590

9,718

1,060,987

1,006,280

1,018,260

Yr./Yr. % Change

-36.6%

-36.6%

-36.6%

14.5%

19.8%

18.6%

Condo Apartment

11,262

5,199

16,461

792,778

721,792

770,358

Yr./Yr. % Change

-29.6%

-29.0%

-29.4%

13.0%

21.2%

15.3%

Source: Toronto Regional Real Estate Board

Seasonally Adjusted TRREB MLS® Sales and Average Price1

 

 

 

 

 

 

 

Sales

Month-over-Month % Chg.

Average Price

Month-over-Month % Chg.

August ’21

9,413

-3.1

%

$1,117,762

2.7

%

September ’21

9,311

-1.1

%

$1,140,007

2.0

%

October ’21

9,925

6.6

%

$1,155,104

1.3

%

November ’21

9,335

-5.9

%

$1,181,226

2.3

%

December ’21

8,983

-3.8

%

$1,210,375

2.5

%

January ’22

8,645

-3.8

%

$1,272,097

5.1

%

February ’22

9,163

6.0

%

$1,285,129

1.0

%

March ’22

7,876

-14.0

%

$1,252,680

-2.5

%

April ’22

6,631

-15.8

%

$1,204,076

-3.9

%

May ’22

6,074

-8.4

%

$1,172,093

-2.7

%

June ’22

5,780

-4.8

%

$1,138,924

-2.8

%

July ’22

5,296

-8.4

%

$1,107,613

-2.7

%

August ’22

5,885

11.1

%

$1,130,463

2.1

%

Source: Toronto Regional Real Estate Board; CREA Seasonal Adjustment. 1 Preliminary seasonal adjustment undertaken by the Canadian Real Estate Association (CREA).  Removing normal seasonal variations allows for more meaningful analysis of monthly changes and underlying trends.

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