The Toronto Real Estate Board announced that Greater Toronto Area REALTORS® reported 9,902 sales through TREB's MLS® System in September 2016. This result was up by 21.5 per cent compared to September 2015.
For the region as a whole, strong annual rates of sales growth were experienced for all major home types. The pace of detached sales growth was slower in the City of Toronto and the number of semi-detached sales was down compared to last year. In both cases, the year-overyear dip in new listings was likely the issue.
The Toronto market continues to see strong demand for ownership housing up against a short supply of listings in the Greater Toronto Area in September. The sustained lack of inventory in many neighbourhoods across the GTA continued to underpin high rates of price growth for all home types.
Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up strongly on a year-over-year basis in September. The MLS® HPI Composite Benchmark grew by 18 per cent compared to September 2015. The average selling price was up by 20.4 per cent to $755,755. The average selling price can be influenced by changes in both market conditions and the mix of homes sold.
The Toronto Real Estate Board will be closely monitoring how the recent changes to Federal mortgage lending guidelines and capital gains tax exemption rules impact the housing market in the Greater Toronto Area. While these changes are pointed at the demand for ownership housing, it is important to note that much of the upward pressure on home prices in the GTA has been based on the declining inventory of homes available for sale, not the fact that we see an increase in foreign investment recently. The changes being made to the mortgage guidelines may have a larger effect on sales and price growth as opposed to the capital gains tax exemption on foreign owners. We are already seeing some lenders adjusting their lending guidelines on non owner occupied property purchases. Lenders tightening up may have a negative effect on sales as if it becomes more difficult to borrow this will be a factor for purchasers.
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