A new report from the Toronto Real Estate Board (TREB) shows a continued downward trend in the Greater Toronto Area's resale housing market in July 2017 in the wake of Ontario's Fair Housing Plan. The 5,921 residential transactions recorded during the month represents an over 40% decline over figures from the previous July, with detached homes being noted as the leading market segment.

TREB, market report, resale housing, commercial marketToronto skyline, image by Paul Flynn via Flickr

While this drop in activity should theoretically result in a reduction in prices, the average selling price actually increased by 5% year-over-year, now sitting at $746,218. Despite the drop in sales, the number of new listings in July were only a few percentage points ahead of July 2016's figures. July 2017's 18% year-over-year increase in the Composite Benchmark price may seem alarming, though in contrast, the Composite Benchmark actually declined by 4.6% over June 2017's numbers.

TREB President Tim Syrianos stresses that a recent report issued by the Ontario government echoes TREB's conclusion that foreign purchasers only account for a small percentage of home sales in the region, instead attributing the year-over-year changes to a state of mind among potential purchasers. "Clearly, the year-over-year decline we experienced in July had more to do with psychology, with would-be home buyers on the sidelines waiting to see how market conditions evolve,” said Syrianos in a prepared statement.

TREB CEO John DiMichele also points out that market trends and statistics show the summer months as a recurring slow point for sales, noting that market will "generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home".

In parallel to the resale housing market, the GTA commercial market also witnessed a drop in activity accompanied by an increase in prices. The combined 391,196 ft² of industrial, commercial/retail, and office space leases recorded in July 2017 represented a staggering drop from the 879,946 ft² of space leased out in July 2016. At the same time, average lease rates for all three market segments increased, with the industrial submarket representing roughly two thirds of the total space leased during July 2017.

The new average lease rate for industrial properties rose to $7.53 psf (per square foot), a substantial increase from the average of $5.88 recorded in July 2016. This rise is being attributed to a decline in large property leases, which often lease at lower prices psf. Property sales for all three market segments declined from July 2016's 55 sales down to the 48 recorded in July 2017, with average sale prices increasing for the industrial submarket, and declining in the commercial and office markets.