The first month of 2018 has flown by and with it, an idea of what’s to come for this year’s real estate market. So far, according to January data from the Toronto Real Estate Board, sales conditions are slower than they were this time in 2017 – but experts expect that to change, as prospective buyers take new mortgage rules and rising interest rates in stride.
“As we move through the year, expect the pace of home sales to pick up as the psychological impact of the Fair Housing Plan starts to wane and home buyers find their footing relative to the new OSFI-mandated stress test for mortgage approvals through federally-regulated lenders,” said Tim Syrianos, president of TREB.
Overall GTA Sales down 22%
A total of 4,019 homes were sold last month in the total Greater Toronto Area, down 22 per cent from last year. The average sale price is also slightly softer for the area as a whole, falling 4.1 per cent to $736,783. The most expensive home types – detached houses – saw the greatest decline at 9 per cent. Condos, however, continue to boom, with values rising 15 per cent, followed by townhomes and semi-detached homes, which both declined 2 per cent.
INFOGRAPHIC: Year Over Year Toronto Home Sales by Property Type
However, slower year-over-year conditions don’t indicate the red-hot housing market has gotten dramatically more affordable, or that bidding wars haven’t remained the norm. Analysts emphasis that that while conditions may be slower in some markets – for example, houses for sale in Mississauga, compared to downtown Toronto real estate listings.
Lauren Haw, Broker of Record at Zoocasa Realty, says perspective is crucial when looking at the year-over-year data, especially when comparing this year’s market to the record-breaking conditions experienced in the first half of 2017. “It’s important not to let year-over-year figures skew how we look at market conditions. We know that sales are down from 2017’s abnormally high first quarter levels,” she says. “Sales are in-line with the hot 2016 market – when we saw headlines about the ‘continuous overheating’ market. It’s also important to focus on individual markets to see what is going on, in places like Peel, Halton and Durham Regions as opposed to the TREB Region as a whole.”
Compared to last year, most markets within the GTA region tracked by TREB reflect balanced conditions, based on sales-to-new-listings ratios. This metric, which divides the number of sales by new listings coming to market, effectively gauges the level of competition in any given area, though it does not necessarily reflect lower prices.
A Tale of Many Cities
For example, York Region remains in a low buyers’ market with a ratio of 29 per cent, due to a 37.7-per-cent decline in sales, and a 6.3-per-cent price slide to an average of $870,483. The City of Toronto is firmly on the higher side of balanced with a ratio of 54 per cent – while sales fell 19.6 per cent year over year, inventory remains very tight with a -0.35 per cent decline in new listings. Halton, Peel, and Durham all remain balanced, with ratios of 46 per cent, 54 per cent, and 49 per cent, respectively.