Toronto skyline by Mike UCL
Toronto realtors reported 4,395 existing home sales for December, bringing total sales for 2010 to 86,170, down 1% from 2009.
Getting over the hurdle
This is due to 2010's market conditions, which were not at all uniform, going from supercharged sales activity during the first four months of the year, to a market drop-off in summer transactions, and lastly to sales back at sustainable levels again in the fall.
Misconceptions about HST, higher borrowing costs, and new Federal Government-mandated mortgage lending guidelines caused a lull in home buying in the summer, although buyers then swiftly realized that HST was not applicable to the sale price of an existing home. Home ownership remained affordable and thus market conditions improved after the summer months.
In 2009, average home selling price was $395,460; this amount increased 9% in 2010, up to $395,460. In December, the average annual rate of price growth was 5%.
“At the outset of 2010, we were experiencing annual rates of price growth at or near 20%. This was the result of extremely tight market conditions coupled with the fact that we were comparing prices to the trough of the recession at the beginning of 2009”, said Jason Mercer, the Toronto Real Estate Board's (TREB) Senior Manager of Market Analysis.
Average selling price is expected to grow around 5% in 2011. With this type of growth, mortgage carrying costs for the average-priced home in the GTA will remain affordable for a household earning average income.
