Unit sales for Central Toronto for February 2009 totaled a mere 739 transactions. The same time last year there were 1017 sales, 37% more than this year alone. The average price the same time last year was $522,480, approximately 10% more than this year. These figures can be a little intimidating for individuals who purchased at the peak of last year’s real estate market. However, keep in mind that what goes up, must come down.
With the real estate prices in Central Toronto decreasing by 10% over the past year, one can’t resist putting partial blame on the new City of Toronto’s Land Transfer Tax. This additional tax alone created a rush in the real estate market as people wanted to purchase before the tax was implemented last February ’08. After the tax came into effect, market sales started to slow down. With homes sitting on the market for an average of 26 days (DOM) in Feb, 2008, homes now sit for an average of 43 days (Feb 2009). Now let’s compare these stats to the year 2000. In 2000, we saw 750 sales, with an average price of $375,847. Today we are seeing similar sales number but the average price has increased by 26%.
There is no doubt that the real estate market in the City of Toronto will take some time to reach the peak it did in 2008. With the new Harmonized Sales Tax (HST) taking effect in July 2010, the real estate market will definitely need time to adjust yet again to the never ending taxes applied directly to the real estate industry in the City of Toronto.
* All facts and stats from Market Watch, February 2009, Toronto Real Estate Board.