PRESS RELEASE:

GTA PRICES DOWN 10%

SALES DOWN 35%

(COMPARED TO OCTOBER 2007)

Home sales in the Greater Toronto Area declined 35 per cent in October and average prices were down 10 per cent from a year ago as "consumer uncertainty" took hold, the Toronto Real Estate Board reported November 5th.

The average price fell to $352,974 from last October's average of $394,646, and homes took longer to sell, the board said.

Toronto Real Estate Board President Maureen O'Neill said: "Consumer confidence is critical to the housing market and it appears that consumer uncertainty has been prevalent in today's market conditions,"

Toronto-Dominion Bank economist Derek Burleton said that, given the credit crisis and the overall state of the economy, it is understandable that "people will be holding back" on major expenditures such as home purchases.

However, "I don't think we are looking at a free-fall," he added.

Members of the Toronto Real Estate Board reported 5,155 sales in October, down from 7,915 a year earlier when the market was still strong and many purchasers engaged in bidding wars.

"Consumer confidence is being unduly affected by media reports on the United States economy," Ms. O'Neill said. "There's no question that in Canada the economic fundamentals to support a healthy housing market remain in place."

Mr. Burleton, TD's director of economic analysis, said October was a tough month across the board as stock markets plunged and working Canadians became increasingly unnerved by the ongoing global financial crisis and a steady stream of layoff announcements in manufacturing and other sectors.

In the Greater Toronto Area, there are currently 27,277 homes listed for sale on the Multiple Listing System (MLS), a 32 per cent increase from a year ago.

As a result, the amount of time a home remains on the market has increased to 37 days from 30 days a year ago where we were in a supply and demand situation with low levels of inventory and high levels of buyer demand.

Brent Weiner of the CMHC's market analysis centre said in an interview that 2007 was a record year in home-sales volume in Canada - with more than 520,000 homes changing hands. Average prices increased steadily for six consecutive years - up by 9.7 per cent in 2003, 9.3 per cent in 2004, 10 per cent in 2005, 11.2 per cent in 2006 and 10.7 per cent in 2007.

"There was extremely strong demand, so prices were bid up," Mr. Weiner said.

After several consecutive years of strong price gains, it was only a question of when - not if - the Canadian housing market would cool, Mr. Weiner said, adding that the 2008 sales figures reflect a return to "more balanced market conditions."

Listings have gone up and housing demand has eased somewhat, Mr. Weiner said.

"There is no longer the same sense of urgency to buy in 2008 than there may have been in previous years."

The good news is now we are in a buyer's market! The frenzy of bidding wars has abated, and buyers can now take their time in deciding which property best suits their needs.

If you would like more information regarding Toronto's real estate market or specific information concerning the wonderful family neighbourhoods of Armour Heights, the Cricket Club, Hogg's Hollow or Bathurst Manor, please feel free to call Liz Gordon, Sutton Group Admiral Realty Inc. at (416) 739-7200, or email at egordon@trebnet.com.

Source: Toronto Globe & Mail, November 5, 2008