GTA Condo Sales Plunge, Prices Stagnate

Excerpted from The Globe and Mail
October 16, 2012

Toronto condo sales plunge, prices stagnate

By Michael Babad

Third-quarter numbers not encouraging

These are stories Report on Business is following Tuesday, Oct. 16, 2012.

Follow Michael Babad and the Globe's top business stories on Twitter. [http://https://twitter.com/#!/michaelbabad]

Toronto condo sales plunge
The latest numbers from the Toronto Real Estate Board are not encouraging, particularly where the city's condo market is concerned.

According to new statistics released today, condo sales plunged 20.5 per cent in the third quarter of the year, to 4,541, from a year earlier.

New listings climbed more than 6.5 per cent, to 11,456, while average prices were flat at $334,204.

"With more listings to choose from and fewer sales, condo buyers have not been as aggressive with regard to offers, and sellers have had to price their units competitively," Jason Mercer, the group's senior manager of market analysis, said in the report.

"The result was little upward pressure on the average selling price compared to last year. Given the supply of listings currently in the market place, the average rate of price growth for condo apartments should continue to lag price growth for low-rise home types over the next year."

The real estate board also reported over all home sales in the first half of the month, highlighting again how Toronto's housing market is softening.

Sales in those 14 days fell by 10.5 per cent from a year earlier, to 2,961, while new listings rose 5.5 per cent, to 6,505.

Average prices, though, climbed by almost 6 per cent to $501,146.

"Some households have put their home purchase plans on hold in response to the higher cost of home ownership brought about by the recent changes to mortgage lending guidelines," said the group's president, Ann Hannah, referring to the latest restrictions unveiled by the government, which took effect in July.

"Both first-time buyers and existing home owners have been affected, given that sales were down across house types and geography," said Toronto Real Estate Board (TREB) President Ann Hannah.

The Toronto report comes just a day after the Canadian Real Estate Association's over all look at the market in September. That, The Globe and Mail's Tara Perkins reports, showed home sales in Canada plunging by 15.1 per cent last month from a year earlier, though on a seasonally-adjusted basis gaining 2.5 per cent from August.

Amid the angst over the country's slumping housing market, economist Robert Kavic of BMO Nesbitt Burns takes an interesting look today at who's winning and who's losing

Not surprisingly, Vancouver and Toronto lead the pack of losers, in terms of sales, while Calgary is the runaway winner.

Mr. Kavcic tracked 23 markets, using three-month averages compared to a year earlier, rather than just comparing September 2012 to September 2011.

Of those 23, he found, 13 are experienced "balanced conditions," though that may well change going forward.

"With sales generally falling relative to new listings, the number of buyers' markets could be on the rise in the months ahead," he said.

"Vancouver continues to show the weakest metrics," Mr. Kavcic added. "Winnipeg, however, remains tight despite a recent drop in sales, while Calgary is on the verge of a return to sellers' market territory."

Using the three-month average, Mr. Kavcic found Vancouver sales down 27 per cent, and prices down 7.7 per cent, in a buyers' market. Toronto sales were down 14 per cent and prices were up 6.1 per cent, in a balanced market.

In Calgary, prices climbed 19.1 per cent and prices 1.2 per cent in a balanced market, while Winnipeg saw a sales decline of 7 per cent and a price gain of 4.8 per cent in a sellers' market.

For a look at other cities and Mr. Kavcic's findings in general, see the accompanying graphic or click here [http://www.theglobeandmail.com/report-on-business/top-business-stories/bmos-housing-market-scorecard/article4615031].
•Year-over-year home sales plunged 15.1 per cent in September [http://www.theglobeandmail.com/report-on-business/economy/housing/year-over-year-home-sales-plunge-151-per-cent-in-september/article4612858]