RealNet Inc. has released its statistics on last month’s home sales numbersa and, as expected, they weren’t too hot. August is traditionally a slow month and lags behind the spring and fall months, however RealNet reports that, compared to previous years, this past August was particularly rough.
In the New Homes category there were 645 high-rise units sold and 597 low-rise in the GTA. This bumps the cumulative (January – August, 2012) new home sales up to 24,301.
To get some perspective on what these numbers mean, RealNet compared them to previous years on record. This August saw the lowest high-rise and low-rise sales on record (the past 13 years). The high-rise index price decreased by 4.8% while the low-rise price increased by a whopping 12.7% compared to 2011. Cumulative new home sales are down 10% from the long-term average.
While most definitely showing a downward trend, it’s important to note that this past summer saw the implementation of new amortization rules, decreasing the maximum amortization period to 25 years from the previous 30. BILD CEO Bryan Tuckey stated that this August was the first full month with the new rules in place, and that they have apparently affected consumer confidence, substantiated by RealNet’s findings.
BILD also notes that another important factor in these numbers is a lack of housing supply and choice as a result of Ontario’s emphasis on intensification. This lack of supply has subsequently affected new low-rise home pricing and affordability. The low-rise price index is at a high of $609,369 with the high-rise index price at $439,460.