Historically low interest rates on mortgages continue to drive demand and push home sales in the GTA. The Toronto Real Estate Board reported 8,476 sales across the GTA for the month of October, up 64 per cent from October 2008. This number includes both the 905 and 416 exchanges. The average sale price across the GTA was $423,559 this was an increase of 20 percent year over year according to the Toronto Real Estate Board numbers.
Year to date for the first 10 months of 2009 the average sale price is up 3 percent over 2008. The average sale price for 2009 is currently $392,264 for the first 10 months. The highest rate of growth for October 2009 across the GTA was seen in homes selling over $750,000.00 skewing the average sale price for the GTA in the month of October 2009; interestingly this also was the segment of the GTA resale housing market that declined at an above average rate in 2008.
Typically we compare this year to last year to get an indication of what is happening in the real estate market. To do so now may be somewhat misleading as we would be comparing current activity to the bottom of the market. September 2008 marked the beginning of the global financial crisis that froze consumer confidence and stalled home sales in the following six months.
The current interest rates are being held low by the Bank of Canada to jump-start the economy and they will not last. As mortgage rate inch up in 2010 and 2011 the market demand typically will decrease. The currently low interest rates may in fact be stealing activity from 2010. Another factor that has driven prices up has been lower levels of inventory. Listings were down 46 per cent in October across the GTA resulting in bidding wars and significant price jumps in some neighbourhoods.
With so few homes on the market, buyers were becoming very creative in hopes that their offer would be the one chosen by the seller. Sending personal letters and even videos in hopes of tugging at the seller’s heart strings and making a connection.
Cheryl Kelly
Broker with Signature Service GMAC Real Estate
