CMHC’s Fall 2012 release of the Housing Market Outlook – Greater Toronto Area

Resale Market – Activity expected to improve later in 2013

Market conditions in the Greater Toronto Area (GTA) existing home market are expected to moderate over the next six to nine months before regaining some momentum in the second half of 2013. Sales have recently begun to adjust down in response to tighter mortgage qualifying criteria, higher prices, previous weakness in employment and reduced immigration. Prices are expected to experience a very mild downward adjustment into the first part of 2013 as market conditions become more balanced. However, improvements to ownership affordability will accrue with slower price growth and recent employment and income gains. This will help to ensure the slowdown for sales and prices is temporary and growth resumes later next year — albeit at a slower pace than in 2011 and the first half of 2012.

MLS® sales in the second half of 2012 will decline by approximately 15 per cent compared to levels in the first half of the year, largely due to the lagged effect of past economic and market-related developments. A slower profile for economic growth and increased uncertainty reflected in financial market conditions caused the GTA labour market to lose jobs throughout the second half of 2011.

The typical nine-to-twelve month delayed impact on housing sales began to materialize noticeably by the third quarter of this year, as the job losses were centered on full-time positions for younger workers in higher-paying sectors.