Home prices in the Greater Toronto Area dropped for the third straight month in July, dropping 4.6% from June to an average of $746,218 across all home types.
That represents a $174,573 drop since prices peaked in April at $920,791. That raises the possibility that some buyers in Toronto now hold mortgages that are worth more than their homes.
According to the Toronto Real Estate Board (TREB), the monthly decline in prices was driven mostly by a decrease in the value single-family home types. As single detached and even semi-detached home prices have become unaffordable for most Toronto buyers, there has been a precipitous drop in sales. Since their peak in April, detached home sales have fallen 48.5%. Across all home types in the GTA sales were down 40% compared to July 2016.
The price for an average home in the Greater Toronto Area has now fallen below average prices in September of 2016
In their release, TREB President Tim Syrianos confirms that the freeze in sales following April is indeed influenced by would-be buyers waiting to see how the market will change following the implementation of the Fair Housing Plan, a new policy by the government of Ontario that aimed to cool the overheated Greater Golden Horseshoe housing market.
Also putting pressure on houses is a recent rate increase by the Bank of Canada, which hiked interest rates by 25 basis points on July 12.
TREB CEO John DiMichele says that it is still too early to judge the impact of those market changes.
“Summer market statistics are often not the best indicators of housing market conditions. We generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home,” he said.
That raises the possibility that some buyers in Toronto now hold mortgages that are worth more than their homes
The price for an average home in the Greater Toronto Area has now fallen below average prices in September of 2016, meaning many who’ve bought homes since then have seen the value of their property stay stagnant or even fall.
The price for an average home in the GTA was $755,755 last September, while today, it sits at $746,218.
More crucially, the average price for a single detached home in the GTA is now close to falling below $1 million for the first time since August of 2016. According to TREB’s sales data, single detached homes sold for an average of $1,000,336 in July of 2017.