Toronto area prices were lower in July than in June for all property types, which is completely normal for the summer months. Sales in July were 3% lower than in June, while the total number active listing was 9% lower, and so the inventory of homes for sale dropped to just above 2 months’ supply, indicating a strengthening sellers’ market. This has resulted in sporadic bidding wars across the GTA, particularly for homes under $1 million, where down payments under 10% and CMHC insured mortgages are still possible. (The minimum down payment for homes above $1 million is 20%, and CMHC insurance is not available.) While prices remain somewhat soft overall, we can look forward to a strong rebound in the fall if these conditions continue.
The market for condominium apartments remains exceptionally strong. While average prices have fallen a bit over the past couple of months, they remain well above last year and only slightly below the all-time high reached in May. The fall market, starting after Labour Day, should be very good for condos.
Prices for freehold (mainly detached & semi-detached) homes fell for the second month in a row, and are tracking very closely the trend lines for the past two years. Assuming this pattern continues, we can expect freehold prices to soften a bit further in August and then bounce back up in the fall, though probably not as high as in the spring.
All of the above is against a backdrop of slowly declining interest rates, which is the main reason for the market’s relative strength. To the extent that the interest rate trend is a harbinger of economic weakness in Canada and elsewhere, this is good news for the real estate market over the next few months, but maybe not so much beyond that.