HOME SALES AND LISTINGS, IN RICHMOND HILL, VAUGHAN AND AURORA, TREND DOWNWARDS IN JULY
Friday Aug 12th, 2022
In July 2022, there were 4,912 home sales reported through the Toronto Regional Real Estate Board. We were down by 47 percent compared to July 2021.
Following the regular seasonal trend, sales were also down compared to June. New listings also declined on a year-over-year basis in July, down by a more moderate 4 percent. The expectation is that the trend for new listings will continue to follow the trend for sales. This will be the same for the second half of 2022 and into 2023. Market conditions are much more balanced in July 2022 compared to a year earlier.
As buyers continued to enjoy more choice, the annual rate of price growth has moderated. The MLS® Home Price Index (HPI) Composite Benchmark was up by 12.9 per cent year-over-year. The average selling price was up by 1.2 per cent compared to July 2021 to $1,074,754.
Condo apartments, experienced stronger price growth as more buyers preferred them. This in turn helped mitigate the impact of higher borrowing costs. Vaughan, Richmond Hill and Aurora's population continues to grow. Tight labor market conditions will drive this growth moving forward. Despite more balanced market conditions resulting from increasing mortgage rates. Policymakers need to boost housing supply to account for long-term population growth.
We need realistic solutions on the table. This will address the existing housing affordability challenges. Savings are high and the unemployment rate is still low. Home buyers will account for higher borrowing costs. We want to have an adequate pipeline of supply in place. Or market conditions will tighten up again.
TRREB is calling on all levels of government to reassess and clarify policies related to mortgage lending and housing development. Many families plan on buying a home in the future. But there is currently uncertainty about the market.
Policymakers could help allay some of this uncertainty. As higher borrowing costs impact housing markets, TRREB maintains that the OSFI mortgage stress test should be reviewed in the current environment.
Consumers are looking to renew their existing mortgages with a different lender. They should not be subject to an more stress test burden. Especially beyond what they would face with their existing lender. Given the importance of the housing industry as a driver of economic growth, a transparent process and sound rationale in the development and management of stress test guidelines are also of utmost importance,” said TRREB CEO John DiMichele. “With significant increases to lending rates in a short period, there has been a shift in consumer sentiment, not market fundamentals."
The federal government has a responsibility to not only maintain confidence in the financial system, but to instill confidence in homeowners that they will be able to stay in their homes despite rising mortgage costs.
We should explore longer mortgage amortization periods on renewals and switches . With the benefit of hindsight, it appears that the Bank of 2 Canada’s rate increases started too late. Now we are dealing with outsized increases to curb high inflation. The federal government must enact measures which will assist buyers. Costs are rising at the gas pumps, the grocery stores and everywhere. The provincial government must take action. There are rising municipal government fees across Vaughan, Richmond Hill and Aurora. such as development charges which are borne by home buyers. The City Council should reflect on its recently approved 46 percent increase to development charges. The average cost of all government charges and fees is an astounding $350,000+. That is for every new detached house and over $180,000 for a new condominium.
Every level of government agrees that the Vaughan, Richmond Hill and Aurora needs more homes. Governments must stop their reliance on significant charges and fees. Especially on new homes and unpredictable taxes on existing homes. Or we will continue to see a growing housing crisis that will inhibit the growth of the GTA’s economy.