Average annual price changes in Ontario and the GTA moderated considerably in the last decade. The incredible spike in prices from the mid to late 80's was not in evidence before this recession. While not on this chart, prices in January, 2009 are down slightly in Ontario and in the GTA.
Existing Home Price Changes
Number of MLS Sales in the GTA
Prices have held up fairly well, but sales have declined since the spike in 2007. This spike may have been partially caused by the new Toronto Land Transfer Tax as buyers and sellers rushed to complete their transactions before it took effect. The big chill in our market was probably a reflection of the news from the US housing market and the media's insistence we had the same problems here. We didn't have their speculation and crazy mortgages (read more). The CMHC estimates sales volume has declined to a steady level, given to family formation rate and number of immigrants seeking housing.
Buyers Market Confirmed
In this chart we see ratio of new listings to sales. In other words, if the new listings are adding to the pool of unsold homes (inventory) rather than being sold, then the inventory grows and puts pressure on sellers to reduce prices. At levels above the red line, its a seller's market with little inventory and lots of buyers. Below the blue line, lots of inventory and fewer buyers favour the buyer. As you can see, we're in a buyer's market, although not a severe as the early 90's.
Total Listings Increase to Enlarge Inventory
There are lots of homes on the market giving buyers great selection and negotiating power. This could be a good time to move up or acquire an investment property. Our broker, Ken McLachlan, owns one of the largest brokerages in the world. In fact, we're expanding in this recession, adding two new offices with over 500 agents. Ken's blog advises that this year will be a tremendous window of opportunity to acquire investment property or to move up.
For more statistics and interpretation, please see Condo Trends and Existing Single Family Homes
