TREB calls for policy review as prices rise and sales drop
Numbers from February are in, and despite a cooling market in terms of actual sales, home prices have risen since January.
According to new data released by the Toronto Real Estate Board, selling prices across the GTA rose 1.6% in February, year-over-year. The average selling price for February was $780,397 compared to January’s average selling price of $748,328 – an even sharper increase of about $30,000.
TREB explains that Toronto’s February market became tighter as new listings “fell more sharply than the slowdown in sales”. Around 5,000 homes were sold in the GTA this February, 2.4% fewer than the year before.
“The [Office of the Superintendent of Financial Institutions] 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.
Industry experts are speculating that policy makers have gone too far with the mandated stress test while the real estate board wants regulators to give buyers a break. The stress test regulations, however, have contributed to large reductions in Canadian debt overall.
Condos and semi-detached sales saw the greatest prices jumps according to Financial Post. Condo prices rose 6.1% compared to a year earlier, landing at an average of $562,161 last month while semi-detached prices rose 9.9% to $832,569 in the same year.
Members of the real estate board believe there could be further consequences if the market sustains further declines.
“The hit [to the economy] has also translated into lower government revenues and, if sustained, could impact the employment picture as well,” said Jason Mercer, market analysis director at TREB.