House prices in Toronto continue to fall amid a widening pool of homes for sale, though there are signs that the correction is beginning to lure in new home buyers, according to the Toronto Real Estate Board (TREB).
TREB’s benchmark home price index fell for the sixth consecutive month, down another 0.4% from October. The index has dropped 8.8% since May – the largest six-month decline in the history of the index, which dates back to the turn of the millennium.
And this November, for the first time since 2009, the average price of a home sold in Toronto ($761,757) failed to surpass levels from a year ago.
More stringent government rules and stricter mortgage guidelines have helped soften prices. This has coincided with a sharp rise in supply, with new listings up 37% from a year earlier. Yet, the latest data indicates that the lower prices are beginning to boost demand and fuel sales.
“We have seen an uptick in demand for ownership housing in the GTA this fall, over and above the regular seasonal trend,” said Tim Syrianos, president of TREB. He added that tighter mortgage qualification rules set to come into force next month may also be expediting sales.
“It is also possible that the upcoming changes to mortgage lending guidelines, which come into effect in January, have prompted some households to speed up their home buying decision,” Syrianos said.
Toronto realtors sold 7,374 units in November. While this figure is down 13% from a year earlier, the number is one of the highest readings for the month over the past decade.