Did Toronto Sales Really Drop 52% in December?
RealNet Canada Inc. has released some stats regarding Toronto’s December housing market, and they’re fairly shocking.
The report states that home sales in the GTA dropped by 52.1 per cent when compared with December of 2011. Meanwhile, the amount of unsold homes on the market continued to go up – by 29.1 per cent from December 2011. And while many may be blaming the tighter mortgage rules for the drop in sales, RealNet says that it goes even deeper than that – it’s a lack of housing available within the low-rise sector.
“It’s impossible to have a healthy understanding of the condominium market by only looking at the condominium market when provincial growth planning policies are forcing a shift to higher density development,” says George Carras, president of RealNet. “While it’s hard for most people to miss the growing number of new condominiums, it’s easy to miss the shrinking numbr of ground-related developments across the GTA, and therefore misunderstand the market.”
At first glance, Mr. Carras may not be wrong. Last year low-rise sales dropped 20 per cent from where they were the year before; and that was the second-lowest level seen in over a decade. Altogether, those “ground-related developments” that Mr. Carras also pointed to only accounted for 43 per cent of all transactions last year. Meanwhile, prices have increased for those exact homes by 44 per cent during the same time frame.
But is all of this really accurate? While it’s no secret that Toronto has more condo buildings than it does coffee shops at this point, and low-rise and single detached homes just can’t keep pace, the detached home sector hasn’t been performing as well as the condo sector for years now. So are people really “misunderstanding the market” and overlooking the lack of supply? We don’t think so.
And we don’t think GTA sales fell by 52 per cent either.
According to the Toronto Real Estate Board as we reported earlier this month, home sales in Toronto dropped by about 19.5 per cent during December 2012 when compared with December of 2011.
And RealNet may have been a bit off when it comes to their data regarding prices as well.
According to them, low rise prices jumped 16 per cent in December 2012 when compared with December 2011; and high rise prices increased by 0.4 per cent. Either way, that accounts for just over a 16 per cent increase in home prices in the GTA.
We’re not arguing that home prices jumped year over year, but those numbers do seem to be a bit inflated when TREB posted the increase at 6.5 per cent.
It’s not often that you see such a huge gap between two different agencies when it comes to sales and prices, and from two credible agencies. Who do you think is more accurate – RealNet, or TREB?