In our latest Market Insight we suggested that the reason listings were down was a reaction to the upcoming Federal Election. While there is little reason to believe that, whatever the outcome, home prices would be adversely affected, we wanted to prove that the theory was sound. We have been keeping records on downtown Toronto real estate for just over three years but only through one other election, that being last year’s municipal election which took place on October 27th. We went back to the beginning of October 2014 and discovered that freehold listings decreased by 31% over the previous week while sales remained steady. The following week, October 17th, freehold listings backed off another 17% and sales slowed. By the next week the polls were reporting a clear lead for Mayor Tory and with the election essentially a fait accompli listings improved by 8% and sales shot up 64%. Immediately after the election, both in terms of listings and sales, activity returned to normal levels.
According to Anthony Codling, housing analyst at the broker Jefferies, who has studied the last seven UK elections; “On average, and when compared to the level of transactions at the time of an election, transactions have been higher in the period six to 12 months prior to and one to six months after an election but the four months immediately preceding elections have typically seen housing transactions 3% to 8% below the level seen at the time of an election. In our view, this confirms what we believe many intuitively believe; that the uncertainty regarding elections will delay a prospective homeowner’s decision to purchase a home.”
In the freehold sector, we have further proof of the theory. Listings again have dropped by another 3% while the number of sales remained unchanged. It is interesting to note that sales at or above the list price decreased from 70.6% two weeks ago to 62.5% last week, so while there are still plenty of buyers in the market they appear to have calmer heads come offer night. The west core continues its streak as the hot neighbourhood with more listings and more sales than the usually hot East core.
The condominium resale market remained relatively unchanged in terms of listings last week however sales improved for the fourth straight week. While last week’s growth was a more moderate 4% over the previous week it does show the continued strength of this segment of the overall Toronto real estate market. Even with 20.9% of those sales taking place at or above the list price, it is nowhere near the record level of 31.6% set the previous week.
Bosley Real Estate Ltd. is a full service boutique brokerage operating in Toronto, Niagara-on-the-Lake and Jordan, Ontario since 1928. We have four centrally located offices and over 240 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately report on the true temperature of the real estate market.