Toronto home sales – and, indeed, its brokers – are bucking CMHC projections for a “slower spring,” pointing to year-over-year growth more than doubt those conservative estimates.
“My volumes are up, and I haven’t seen this ‘cooling’ at all,” Kim Gibbon, a broker with Mortgage Intelligence in Toronto, told MortgageBrokerNews.ca. “it’s been an active spring season.
May numbers from the Toronto Real Estate Board (TREB) back up her boast, with home sales up six per cent in May relative to the year-ago period. CMHC economists had predicted the Toronto market would see grow of no more than 3 per cent, factoring a cooling market due to a slowing of consumer spending and mortgage rule changes that prompted many buyers to get an early start on the spring buying season.
More in line with the expectations of economists and real estate agents alike is the price growth in May, with the average up 9 per cent from 2010’s performance that month.
“I’m not surprised there,” said Gibbons, who focuses on the most urban of Canada’s housing markets, also working with condo investors. “Toronto is still a hot market. Although it is more balanced, we’re still seeing more demand than supply as well as multiple bidding situations clients.”
The analysis runs counter to what a CMHC economist told Ontario brokers at the IMBA conference earlier this spring, warning that a shift in consumer spending patterns, coupled with a long-term reduction in first-time buyers, would slow the market for the rest of 2011.
“We’re not creating as many households in your traditional first-time home buyer category of 25 to 40,” said Ted Tsiakopoulos, the Ontario regional economist for Canada Mortgage and Housing Corporation. “You’ve probably already seen that in your business.
In addition to an aging population, Ontario sales should slow as consumers cancel purchase plans in order to pay down record levels of debt. Central and eastern Canada will also see demand for those goods and services drop as a result, said the economis. The high-flying Loonie was also expected to clip U.S. demand for those exports in the pivotal American market.
Her clients have heard that kind of analysis, but it hasn't kept them from moving ahead with purchases in order to take advantage of today's rates, Gibbons told MortgageBrokerNews.ca: "I think that they’ve heard all the doom and gloom about the economy and rates and they’ve moved on and are buying."
Indeed, a growing optimism from positive economic news and continued low interest rates was behind the strong sales numbers in May, according to TREB President Bill Johnston.
“At the same time, the market has become much tighter compared to last year, due to a substantial dip in new listings,” he said.
There were 10,046 sales in Toronto in May and the average price is now $485,520.
A TREB chart shows that at least since 2001, prices have steadily risen in Toronto every year.