The festive season wrapped up a quiet year for the real estate market in the Greater Toronto Area, as reported by the Toronto Real Estate Board.
The latest report shows a 31.5% decrease in new listings in the GTA compared to December of last year, with 4,308 units on the market and a total of 3,781 homes sold. Compared to November, the month suffered a 39% fall in activity and an overall 22.5% decline in sales since a year ago. Market conditions during the month reflected a busier time for sellers with 87% of all homes listed sold.
Prices in the GTA were generally unaffected and averaged at $750,180 by the end of December, with a slight increase of 2.1% year over year. In the 905 markets, sales were down 21%, with 2,308 units sold and prices increasing at 1.5%, averaging at $742,237. In the 416 market, sales fell 24%, with 1,473 units sold and prices increasing 2.9%, averaging at $762,627.
Increasing Preference for Toronto Condos in 2018
Condos for sale in North York and the surrounding areas of Toronto remained in high-demand throughout the year, posting a 7.8% price increase, and also making up a good portion of sales in the 905 markets. Tighter supply conditions have pushed sellers to hold off on selling their homes, or omit it altogether for 2018, limiting the selection on the market and influencing buyer trends.
TREB’s Director of Market Analysis and Service Channels, Jason Mercer, states “After spiking in 2017, new listings receded markedly in 2018. In many neighbourhoods, despite fewer sales from a historic perspective, some buyers still struggled to find a home meeting their needs,” he said. “The result was a resumption of a moderate year-over-year pace of home price growth in the second half of the year. Price growth was the strongest for less expensive home types, as many buyers sought more affordable home ownership options.”
Drop in New Listings Contribute to Sales Decline
As a whole, 2018 saw a 12.7% decline in new listings, amounting to 155,823 homes on the market, and contributing to the year-over-year 16.1% sales decline with 77,426 homes sold. Overall, homes in the GTA averaged at $787,300, a 4.3% price decrease compared to last year. Sales in the 905 markets were down 16.7%, influencing the average price to fall 7.1% to $757,086. Just outside the city, Etobicoke condos for sale fared better, although not by much. 416 condos averaged at $593,366 in 2018, an 8.7% boost in prices, while sales fell 23.9% to 848 units.
Effects of the New Mortgage Stress Test
The new federal mortgage rules introduced in January, tied in with increasing national interest rates, have restricted potential buyers from entering the market during the first half of the year. TREB President Garry Bhaura states, “Higher borrowing costs coupled with the new mortgage stress test certainly prompted some households to temporarily move to sidelines to assess their housing options. With this said, it is important to note that market conditions were improved in the second half of the year, both from a sales and pricing standpoint.”