The average price for a home in the city of Toronto dropped 6% in September, the sharpest price decline we've seen in over ten years.
The average sale price dropped to $393,647 from the September 2007 average of $420,182. During the first half of September prices were relatively flat compared to last year which means that the entire decline in September occurred in the last two weeks of the month. I suspect that the negative economic outlook due to the financial turmoil in the US was certainly a factor in this decline. It will be interesting to see how US markets react over the next month as Treasury Secretary Henry Paulson puts the $700B bailout into action.
Prices remained virtually flat in the 905 region and prices in the Greater Toronto area dropped by 3%
Sales in the GTA were down just 6% to 6,424 in September, a moderate decline when compared to the 14% drop in sales year to date.
It's interesting to note the striking difference in sales and price declines between the city of Toronto and the 905 region. Prices dropped 6% in the city of Toronto while remaining flat in the 905 area. Sales declined by just 3% in the 905 area compared to an 11% drop in the city of Toronto. These results are consistent with a trend we've been seeing between these two regions for most of 2008.
The Toronto Real Estate Board has long argued that the city of Toronto land transfer tax would impact real estate sales in the city. I was a little reluctant to accept this assumption at first but the sales data for this year is showing some significant differences between the two regions.
What are your thoughts? Do you think the city of Toronto Land Transfer tax has impacted sales in the city of Toronto? If not, how would you explain the significant difference in sales and prices between the two regions?
October 3, 2008Market |