Year-to-year Sales Skyrocketing

November 8, 2009

Rise Is Not Finished

People are gradually coming to expect a calmer pace of sales as winter looms, but the latest news from the GTA market gurus shows that the rise in pent-up demand still isn’t finished.

TREB recorded 8,476 sales in October 2009 – that’s a 64% jump compared to October 2008. Sure, last year’s October results are an easy opponent to beat, however, month-to-month results also moved up by 3.5% (from 8,196 sales).

Year-to-year average sale price? A stunning 20% jump to $423,559. October’s average price is $17,000 higher than September’s, due in part to higher demand for upscale properties. “Strong sales growth has occurred across many property classes – from price ranges that would attract first time buyers to luxury properties selling for over one million dollars,” said TREB President Tom Lebour. The highest growth was recorded for properties over $750,000, a sign that buyers’ nervousness is evaporating.

The flow of new inventory is slowing down slightly. New listings dropped by 500 units since the previous month and active listings reached 14,771, compared to 15,894 in September. Days on Market, another key indicator, is down to 26 days from 27 days last month and 37 last year.

Unlike in the US, the burst of demand in Canada is not accelerated by home buyers tax credit. As current market inventory depletes, it’s an interesting question is how long price growth continues.

Prices will go higher – unless Bank of Canada increases interest rates. At that point, prices might take a small tumble. As interest rate increases are on the horizon, now is a good time both to sell and to buy. Sellers get high prices and buyers can lock in an attractive interest rate.

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