GTA home sales continued their year-over-year decline in February as mortgage stress tests remained an issue for buyers.
Toronto Real Estate Board reported 5,025 homes were sold through the MLS last month, 2.4% below a year earlier and were also down from January after preliminary seasonal adjustment.
“The OSFI mandated mortgage stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy. The stress test should be reviewed and consideration should be given to bringing back 30 year amortizations for federally insured mortgages,” said TREB president Garry Bhaura.
TREB is among those calling for changes to the B-20 mortgage guidelines and other policy changes to support homeownership. Mr Bhaura sounded a hopeful tone on what may be ahead.
“There is a federal budget and election on the horizon. It will be interesting to see what policy measures are announced to help with home ownership affordability,” he said.
Tighter market supports prices
There was a tightening of the market though as new listings eased in February and that supported GTA home prices.
The MLS® HPI Composite Benchmark was up by 2.4% year-over-year and the average selling price for all home types combined was up by 1.6%.
Condos and higher-density low-rise homes were the main driver of price growth. On a preliminary seasonally adjusted basis the average selling price was down compared to January 2019.
“Home sales reported through TREB’s MLS® System have a substantial impact on the Canadian economy. A study conducted by Altus for TREB found that, on average, each home sale reported through TREB resulted in $68,000 in spin-off expenditures accruing to the economy. With sales substantially lower than the 2016 record peak over the last two years, we have experienced a hit to the economy in the billions of dollars, in the GTA alone. This hit has also translated into lower government revenues and, if sustained, could impact the employment picture as well,” said Jason Mercer, TREB’s Director of Market Analysis and Service Channels.