Photo: James Bombales
As the holiday season rolls around, listings tend to dry up — no one wants to sell when everyone’s busy with friends and family. But according to new data, this year may prove to be the exception.
December has seen a 64 per cent surge in listings across the GTA, a dramatic year-over-year increase from last December’s 66 per cent decrease.
“The thing to keep in mind, is that the market was really ramping up at this time last year,” Zoocasa managing editor Penelope Graham tells BuzzBuzzNews. “Listings were extremely low, while demand was at record highs, throwing the market into an extremely tight sellers market.”
Graham says that this year’s rise in listings can be attributed in part to anxiety around a new mortgage stress test which will come into effect on January 1.
“There’s been a lot of coverage about how buyers feel some urgency to buy before the test comes into effect, and we’re seeing sellers respond to that demand,” says Graham.
The test, announced in October, will require all uninsured mortgage borrowers to qualify against the Bank of Canada’s five-year benchmark rate, or at their contract rate plus an additional 2 per cent. It is expected to cut into many buyers’ purchasing power, cooling the market for the first half of 2018.
“This month is a good time for buyers, as sellers are more anxious to sell, and there’s more inventory on the market,” says Graham.
The change is particularly pronounced in the detached home market. This time last year, there were 1,839 detached homes listed in the GTA — now there are 3,013.
While she acknowledges that detached homes are still beyond the reach of many buyers, Graham says that they may be more affordable this month than they have been in the past.
“Buyers may have some leverage this month, if they’re interested in purchasing a detached property,” says Graham.
Sales also declined in December, falling 11 per cent to create a 47 per cent sales-to-new-listings ratio for the GTA. According to the Canadian Real Estate Association, a ratio of between 40 to 60 per cent is considered a balanced market, with figures below and above indicating buyers and sellers markets, respectively.
“Buyers have far more choice — and are contending with much less competition — than the same time last year when the market was ramping up to its eventual March peak,” reads Zoocasa’s data release.