Off To A Positive Start, Can Toronto 2008 Real Estate Market Maintain Pace?

February 7th, 2008 Categories: Market Reports, News Wire

It was the best year on record for the Toronto 2007 real estate market. However, given an anticipated cooling of the market this year, we are most interested in seeing the market statistics for January 2008. When the numbers have been so good for so long, can there be a soft landing for the Toronto 2008 real estate market?

Toronto Real Estate Market
Sales Increase

The Toronto Real Estate Board (TREB) reports that we are off to a positive start for the year, as a total of 5,073 transactions took place in the Greater Toronto Area (GTA), representing only a 2% decrease from the all-time January high of 5,173 transactions set in 2007.

Toronto Real Estate Market Starts Race Interestingly, in the City of Toronto (defined as the 416 area code) sales of resale homes increased by 4% in January over the same period last year. No doubt buyers who wanted to beat the Toronto municipal land transfer tax helped goose the numbers, as deals that close prior to February 1 are exempt.

Toronto Real Estate Prices
Higher Yet Lower

How can that be? It depends on whether you are looking at a year-over-year, or a month-to-month comparison. According to TREB, the average price of a resale home in January 2008 was $374,449, which represented a drop of nearly $20,000 from the resale price of $394,931 in December 2007. However, when compared year-over-year, the average price of $374,449 represents a 6% increase compared to January 2007. Pick your poison!

What Awaits Down The
Toronto Real Estate Market Track?

What obstacles are on the track that could trip the Toronto real estate market? Such things as a US market heading for an economic slowdown, if not a recession, the ill-received Toronto municipal land transfer tax, the upcoming Toronto property assessment for the 2009 tax year, affordability pressures if prices continue to increase, and a strong loonie, to name a few. We better be wearing a great pair of kicks!

A soft landing for this market depends on the Canadian economic fundamentals holding steady.