Once again, year-over-year average prices in the Toronto area were higher in November than last November, though both sales and active listings were lower. Prices continue to track 3-5% above last year, as they have every month since the summer. If the seasonal pattern holds true, prices should drop about 4% in December; this will not an indication of a change in the market but rather a further confirmation that we have returned to the historical pattern that we saw consistently for almost 20 years before the bubble last spring.
The only area that has not seen price increases versus last year over the past few months is the York Region north of Toronto (Markham, Richmond Hill, Vaughan, etc). November prices in York were about 4% lower than last year; this area has been particularly hard hit by the bubble collapse last spring, most likely because of the foreign buyers tax that was introduced last April. This is similar to the decline in the Vancouver area market following the introduction of an even higher foreign buyers tax coupled with vacancy and speculation taxes – though the decline in Vancouver has been much steeper.
Meanwhile, the ‘tale of two markets’ continues: condo apartment prices dipped slightly in November, but remain well above the ‘bubble peak’ reached last April; while freehold prices have been tracking very close to last year for the past four months. As interest rates continue to rise, it’s unlikely that the condo/freehold divergence will change much in the coming months.
Both sales and active listings were significantly lower in November than last year, and so the market remains very balanced overall, neither a sellers’ nor a buyers’ market. There are fewer buyers because of higher interest rates, tighter mortgage qualification rules and steadily increasing prices — but there are also fewer sellers, as many would-be move-up buyers are also unable to afford a move. So the market has shrunk, but remains healthy.