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Toronto home sales down 44.1% from a year ago in September

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for-sale-vw1005

September home sales in the Greater Toronto Area were down 44.1 per cent from a year ago while sales and average prices declined sequentially from August, according to monthly figures released by the Toronto Regional Real Estate Board on Wednesday.

Month-over-month sales decreased by nearly 12 per cent, checking in at 5,038 units for September compared to 5,627 in August and more than 9,000 in September 2001.

New listings were also down on a year-over-year basis by 16.7 per cent to 11,237 from 13,494. This was the lowest number of new listings reported for the month of September since 2002. According to TRREB, this is especially worrisome given that the stock of homes in the GTA increased markedly over the last 20 years.

Meanwhile, the MLS Home Price Index (HPI) Composite benchmark reported an increase on a year-over-year basis of 4.3 per cent to $1,110,700 in September while the average price tumbled from $1,135,027 to $1,086,762 over the same period of time.

The real estate board emphasized that a lack of supply remains a critical issue in the region, even as higher interest rates, which jumped by 75 basis points in September, are working to curb demand. Climbing interest and mortgage rates have put a damper on sales and weighed on prices, encouraging prospective buyers to sit on the sidelines and wait for greater price drops. But the lack of new listings means there still may not be enough properties to go around.

“We’re not creating enough housing units to satisfy the needs of a growing population,” TRREB President Kevin Crigger said in an interview following the release of the results.

“When you look at what most governments have done over the last 10 years, they’ve really focused on demand suppression. So, things like the foreign buyer tax.”

Crigger said he wants the government to focus on “cutting red tape” by allowing different types of housing options to bolster the market.

Toronto Mayor John Tory echoed the same sentiment at a press conference following a fireside chat with Crigger on Tuesday.

“There has to be more options than two-storey homes” Tory said.

“Triplexes and duplexes and 4-storey apartments have been around for decades and they are good stable places for people to live. We have to go back to the things that worked well for us in the past.”

There is no shortage of ideas and concepts when it comes to housing types that may help relieve the GTA’s housing crisis. Figuring out ways to build more and faster is often where the conversation loses focus. Tory said he’s committed to “red tape reduction” through a new “Growth Division” he plans to bring to City Hall if he is re-elected in the upcoming municipal election.

“The purpose of this division will be to have an approval process that doesn’t take four years, which is not viable and pushes up the price, affecting affordability. If it takes four years between when you buy a piece of land and start construction, that could mean seven years between the day you bought the land and the day you move in. We are going to speed that up,” Tory said.

TRREB chief market analyst Jason Mercer said new listings are well below historical norms, leading some buyers to experience tighter market conditions in certain neighbourhoods.

Mercer added that October is usually the peak of the fall market.

“It will be important to see where price trends head over the next month,” he said.

• Email: shcampbell@postmedia.com