City of Toronto existing home prices plunged 13% in October from a year ago and are now even lower than two years ago, the Toronto Real Estate Board said Wednesday.

The average price of a home sold in the city was $376,896, down from $434,022 in 2007. But the figure was also down from the 2006 average October sale price of $386,807.

In the greater Toronto area, the average price of a home sold in October was down 10% from a year ago to $352,974. GTA average prices were off 1% from October, 2006.

"Consumer confidence is critical to the housing market and it appears that consumer uncertainty has been prevalent in today's market conditions," said Maureen O'Neill, president of TREB. "We are confident levels will return as demand for housing in the GTA continues."

That demand for housing appears to be drying up quickly. TREB reported GTA sales in October were 5,155, down 35% from a year earlier and 25% from two years ago. In the City of Toronto, sales were off 38% from a year ago. In the 905 region, sales dropped 32% from October, 2007 levels.

Ms. O'Neill expressed continued confidence in the Toronto housing market, pointing to a recent study to back her up.

"Earlier this year the International Monetary Fund undertook a study of housing markets in countries and found that Canada was one of only two nations in which house prices are supported by the economy," she said. "There's no doubt that real estate will continue to be a solid long-term investment in our country."

http://www.financialpost.com/news/story.html?id=935307

Monty, Thanks for the great link.


I am sure GTA is not different than western Canada now. 50k immigrant (mostly from developing countries) will buy all over price and over supply inventory. That is big Q?

By the way..

General Motors Canada has changed its car finance rate across the board from 0% rate on Oct 31st, to 11.25% on November 1st. For some people the monthly payment for the car went from $500 to $660.

Can you imagine if lending rates for real estate shoot up that high what will happen to prices? Lower BOC or Fed rate is not going to change anything for end consumers.
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Ms. O’Neill expressed continued confidence in the Toronto housing market, pointing to a recent study to back her up.

“Earlier this year the International Monetary Fund undertook a study of housing markets in countries and found that Canada was one of only two nations in which house prices are supported by the economy,” she said. “There’s no doubt that real estate will continue to be a solid long-term investment in our country.”

is it possible to make a dumber argument than that ?

the economy wont kill house prices
house prices will kill the economy.

Has anyone actually seen price reduction in an average house ...meaning the one costing in thousands and not Millions.

My observation is that there are less houses on sale compared to before but no one wants to sell below their expected price. So they hold on to the house and do not sell, wait for the mkt to improve.

You are right aashu..i hear about the price reduction in GTA, but haven't seen it in reality till now..all the houses are almost same priced as before..and atleast in brampton, lots of new construction happening..

Quote:

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Originally posted by Aashu

Has anyone actually seen price reduction in an average house ...meaning the one costing in thousands and not Millions.

My observation is that there are less houses on sale compared to before but no one wants to sell below their expected price. So they hold on to the house and do not sell, wait for the mkt to improve.

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I know of a house sold in Warden and Steeles area - listed for $480K sold for $410K within 10 days of listing. I dont think the seller was desperate but the agent was realistic enough in view of the things to come. It was a 4 bedroom, 3 bath house with finished basement.

Those people on the borderline with mortgage/credit card payments nearing thier monthly nett income (after tax) wont have the required patience. With the number of layoffs we are hearing of recently, I wouldnt be surprised...especially in TO with increase in taxes, water costs, garbage removal costs, parking at TTC, license renewal...where has the income of average resident increased to absorb all these additional costs???

Despite couple of multi billion $$ reliefs from Ottawa/queens park, we are yet to hear anything from David Miller about cancelling about any of these tax increases.

Good luck to all those sellers who wish to hold on - just remember that it takes just 6 months for the price to drop 15%~20%, but it will take another 10 years to regain that drop.



Hiren

Quote:

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Originally posted by hchheda

I know of a house sold in Warden...................
Edited by TK

any of these tax increases.
Hiren

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