The October and November numbers for sales of new homes and housing resales are in. Depending on your perspective, these figures can look like they're in freefall, following a base line or creeping up. It all has to do with comparables.
Let's start with Low and High Rise condo sales for the month of October. According to George Carras, president of RealNet Canada, the number of sales in October is up if you compare it to the average over the long term. What, then, is all the hype about falling sales? Is it true that High Rise sales have dropped by 30% compared to October 2011? Yes, but Carras points out that 2011 was a record year of sales so any comparison to that year will result in skewed statistics. Low Rise condo sales, however, have also dipped since last year and over the long term. Any way you cut it, the condo market is slowing down, but perhaps not as much as reported.
On the resale front, it's a similar story, albeit less dramatic. According to the Toronto Real Estate Board, housing sales for the month of November were down by 16% compared to last year, after being up in the first half of 2012.
TREB President, Ann Hannah offers several reasons for the dip in year-over-year sales. It really comes down to money, and its availability to buyers — the new mortgage guidelines that reduce amortization periods leave buyers with less money to play with. When you add the land transfer tax in the City of Toronto, the down payment is also gouged. With less money down and less available in credit, some buyers have been pushed out of the market. Others may have shyed away due to the cap of one-million dollars for government insured mortgages.
Sales are only part of the equation. What about prices? Are they up, down or indifferent? Compared to last year, High Rise condo prices are up almost 16%, while Low Rise prices are down 2%. Resale housing prices were also up on average 1.6 to 4.6%, though down slightly in City of Toronto. All told, not much change.
What does it all mean? It would seem the peaks and valleys in sales will even out over the longer term and prices will creep up steadily. Neither good nor bad, and certainly not as ugly as some would have you think.