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The term "soft landing" has been getting its fair share of airplay as the trend of declining housing prices and overall sales continues through summer in the Greater Toronto Area. According to the latest report from the Toronto Real Estate Board (TREB), the volume of home sales, new listings, and the average cost of a home all dropped in the month of August, following the pattern that has emerged in the wake of the provincial government's new Fair Housing Plan.
A total of 6,357 home sales were recorded in August 2017, representing a 34.8% year-over-year decline from the booming sales witnessed during the same period in 2016. The past month also saw the number of new listings drop by 6.7%, with the 11,523 listings marking the lowest recorded figure since August 2010. While the average selling price for all combined home types actually increased by 3% year-over-year to $732,292, month-over-month figures represent an ongoing decline in home prices since April.
Despite the falling figures, TREB President Tim Syrianos is confident that the seasonal trend of increased sales activity in the fall has the potential to bring about a rebound, saying that “recent reports suggest that economic conditions remain strong in the GTA. Positive economic news coupled with the slower pace of price growth we are now experiencing could prompt an improvement in the demand for ownership housing, over and above the regular seasonal bump, as we move through the fall.”
The commercial market recorded a mix of positive and negative figures, with the rate of leases declining and price per square foot increasing year-over-year. The combined total of 215,353 ft² of leased industrial, commercial/retail and office space in August was significant drop from the 427,002 ft² leased during the same period in 2016. Of these leases, the industrial market segment represented almost two thirds of total space, with the remainder divided between the commercial/retail and office segments. Average prices rose in all three market segments, including a 5% increase in the average industrial lease rate, now sitting at $6.65 per square foot.
Like the residential market, TREB President Tim Syrianos expects future economic growth in the region will fuel further demand for commercial space, suggesting that “recent data suggests that the Canadian and southern Ontario economies are on solid footing and are poised for further growth over the next year. As economic growth continues, businesses’ demand for space will likely increase as well.”
