TRREB’s August GTA Data.

August is a historically slower month. It’s a month to spend the last precious summer days with friends and family at a cottage, enjoy spending time with your kids and for those who are able, take a vacation before going back to work in September.

That’s why this August’s sales activity has dropped significantly from this year’s market peak. There were 20% less sales year over year and 8% less sales since last month. The average home price still increased by 13% since last year.

Even though it was a slower month, it was still quite busy according to the historic data. In fact, this was the third busiest August EVER! This points to the fact that the demand for housing is still very strong among the GTA buyers.

The decline in sales was also accompanied with a very low inventory, which continued causing a severe competition among buyers. Keep in mind, that as we get closer to opening up borders, the competition will continue to be fierce.

Low Inventory, High Demand

There was 43% less new listings making it to the market this August since last year – 15% less than last month. The total number of listings went down by 51% year over year and 16% month over month.

It appears that the market went back to it’s cyclical pattern where the sales activity drops in the summer and picks up again after the second week of September. This technically should alleviate the housing shortage as more listings should become available, however more buyers also come back to the market around that time. In other words, unless a significant amount of listings will make it to the market in the second half of September, GTA buyers will continue to face severe competition.

Home Prices Dropped $35,000 from May, But Are Starting to Recover

In June and July, buyers were happy to see a small price decrease from the market’s peak this year.

However, this relief from the general price trajectory that we are used to in Toronto has been short lived. The prices went up by 1% from July to August. In other words, the good old law of supply has kicked in again when the market experienced a drop in inventory, which propped the prices up (and will likely continue to do so into the fall months).

Upon a closer look at the month to month data, we can see that the suburbs are still very preferable among the buyers. Prices in Peel and Halton rose by 3% and Dufferin grew by 11%. The City of Toronto on the other hand has shown a decline of 2% from last month.

Although lower sales volume can sometimes be the beginning of further price decreases, this isn’t always the case when it comes to the fall market. Read my blog on why prices could go up by about 5% in the next couple of months.

Condos Are in the Lead for Sales Across the GTA

The only product that is not experiencing a decline in sales are condos. Year over year, the sales grew by 13% in Toronto and 11% in the GTA, they also grew in price by 2%.

Zoocasa looked at a 10 year trend to come up with a projection for this fall. Check out my blog where I talk about it in detail here.

If you are looking to purchase a property this year, don’t let the lack of inventory scare you off buying. Let’s hop on a call today so and I will be happy to explain the strategies I utilize for my buyer clients when I look for homes with them.