As promised in my last blog, here is my analysis of the latest Real Estate market report, issued by TRREB, for the month of August 2022.
Residential Sales Market:
According to the Toronto Region Real Estate Board (TRREB), total sales and purchase transaction continued their downward trend when compared with the same month in the last year (August 2021) but it saw an uptick of more than 11% since the previous month (July 2022).
Here is the interesting news, the Average Selling Price graph has changed the course in the upward direction for the first time after the prices started to tank since around the month of May 2022. It is interesting that this upward trend is found in both periods, i.e., year over year as well as seasonally adjusted. Almost a 1% increase is seen when compared with the same month last year (August 2021) and over a 2% increase since last month (July 2022).
This information is critical in understanding the future trend of the Real Estate market. I will explain it in more depth towards the end, let us first analyze the full report.
Year over year (August 2021 compared with 2022) there were less than 0.7% fewer homes that came to the market. Similarly, a 28% decrease in the ratio between new listings and sales was seen. This resulted in a very significant increase in the number of listings remaining in the market, a whopping 62%, 34 days compared to the 21 days it took to sell a home last year in August. This trend is also visible, with a 37.5% increase, when compared with the last month, July 2022, to August 2022 taking 22 days in August to 16 days in July 2022 to sell a home.
Condominium Sales Market:
\Although year over year sales (Q1/2021-Q1/2022) of Condos sales were dropped by 15.6% the Average Selling Price of Condos has shown a giant leap of 22.4% increase.
The total number of condos entering the market also saw a slight increase of .3%, year over year, while there were 14% fewer sales for the new entrants. A big surprise though, it took almost half the number of days to sell a condo, 12 days in July 2022 compared with 23 days in July 2021. It shows the Buyers’ confidence in taking the advantage of the low prices.
Condominium Rental Market:
10,110 condo apartments were rented compared to 12,162, a decrease of over 235 when compared to the same period last year (Q1/2021 – Q1/2022).
The Average one-bedroom apartment rent went up to $2,145 compared to $1,820, an 18% increase, in the same period.
Total new rental units entering the market were cut in half with16,475 units in Q1/2022 compared with 28,703 units in Q1/2021.
Commercial Market:
Commercial sales were down by almost 22% in Q1/2022 compared with Q1/2021 with 307 and 392 sales recorded respectively.
Year over year, first quarter leasing activity also saw a slow down with about 6.5M and 8.7M units leased during Q1/2022 and Q1/2021 respectively.
The average lease rate for both Industrial and Commercial/Retail units saw increases of 28.6% and 14.4% respectively. The average office unit leasing rate declined by 2%.
Coming back to the question of what is in the folds for the near future of the Real Estate market?
As no one can predict the future, but it is always not easy to predict the market when there are many variables at work. On one side we have the challenge of record levels of inflation while on the other hand mortgage rates are on the rise, due to BOC’s corrective actions to bring the inflation under control.
The speech on Wednesday, September 7, 2022, by the Governor of the Bank of Canada would be critical to set the market sentiments for the future, especially in the Real Estate market. As some economists believe that Wednesday’s increase could be the last in addition to reversal of the August’s downward trend of housing prices can lead us to think that we may have seen the bottom of the house pricing in this period and it could be the beginning of the return to an upward trend. But I hope it does not lead to multiple offers and price wars as seen recently.
If you have any questions or would like to discuss your unique needs and goals, please don’t hesitate to contact me at 416-908-5600. I’m here to help you find the perfect, tailor-made solution.
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A. Q. Mufti
Your Trusted Realtor in Mississauga, Oakville, Milton and beyond.
