Toronto home sales soften in August, but fall could see market warm up

The GTA's real estate market continued to cool off last month, with less homes selling and less homes being listed when compared with August 2016.

The Toronto Real Estate Board's sales numbers for August 2017, released Wednesday morning, show that the number of homes sold in the GTA in August decreased by 34.8 per cent compared to August 2016.

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That decrease is only slightly less dramatic than July's numbers, which saw a 40 per cent year-over-year decrease.

The release notes that high-end home sales are down when compared to the same time last year.

The number of new home listings also fell by 6.8 per cent in August compared to last year, which TREB said is the lowest level for August since 2010.

"We started to see fewer and fewer households bringing new listings online as we moved through the spring and summer months," said Jason Mercer, director of market analysis for TREB.

Home prices could jump in the fall

Actual home prices are slightly up, withthe average price for a GTA home hitting $732,292, a three per cent increase from August 2016.

Though the price is up when compared to last year, looking at the cost of homes in the last few months tells a different story, which has seen home prices in Toronto decreasing substantially beginning in the spring.

That could be related to the move taken by the Ontario government in April, when they introduced more than a dozen changes including a 15 per cent tax on foreign buyers in an effort to stabilize prices that were spiraling out of reach for many homebuyers.

That announcement may have had a "psychological impact" on buyers that led them to take a step back, said Mercer, though he notedthat TREBhad commissioned a survey in the spring that showed that the number of people intending to buy remained high.

The average GTA home price went down nearly $175,000 between April and July, and that trend continued in August, which saw nearly $15,000 knocked off of the average home price when compared to July 2017.

Mercer said its unlikely the trend will last as more buyers jump into a market that has a smaller number of listings.

"The mechanism that could come into play is that we start to see more sales relative to listings again and that could lead to an accelerated pace of price growth," he said.