While the housing market in the Greater Toronto Area has been booming in recent years, the last few months have been riddled with headlines about the year-over-year drop in home sales seen in the market. According to Sarah Niedoba, though, this doesn’t tell the whole story.
Her article details the ways these year-over-year numbers may not tell the whole story about the health of the housing market in the GTA. First, the numbers used to measure these are being compared to the peak in activity from the previous year rather than the average activity, and are “skewed toward relatively upper-end homes”.
While prices may be dropping, this is a sign of a healthy market correcting itself from unsustainable costs. Looking at the numbers month-over-month, in fact, shows that March had a 28% increase in home sales. The new stress test which was introduced in January is still showing its impact in the market, and while prices may drop over the next few months, it isn’t of major concern to the health of the market, according to the Toronto Real Estate Board’s director of market analysis Jason Mercer.
The housing market goes through cycles, and this drop as compared to this time last year is to be expected as the market continues to normalize. When looking at the numbers year-over-year in the coming months (May, June, and July), it is expected to once again see similar numbers.