Toronto real estate sales continue to perform well below March 2017 levels, with the latest data from the regional real estate board revealing a 39.5-per-cent drop in activity.
Just 7,228 homes were sold last month, a stark contrast to the record-breaking 11,954 the year prior, reports the Toronto Real Estate Board. It’s the third month in a row that 2018 home sales have failed to improve year over year, measuring 17.6 per cent lower than the 10-year average.
New listings also detracted 12.4 per cent, with 14,866 homes up for sale. Prices have followed suit, softening 14.3 per cent to an average of $784,558.
Slower Sales Not a Surprise
However, TREB President Tim Syrianos isn’t concerned – or surprised – by the slower activity, which the board had anticipated for the first half of the year, as new regulations targeting buyers and mortgage borrowers take hold.
“TREB stated in its recent market outlook report that Q1 sales would be down from the record pace set in Q1 2017,” he stated in the board’s release. “The effects of the Fair Housing Plan, the new OSFI-mandated stress test and generally higher borrowing costs have prompted some buyers to put their purchasing decision on hold. Home sales are expected to be up relative to 2017 in the second half of the year.”
Detached House Prices Skew
As well, much of the lower price trend can be attributed to dropping values for houses for sale in Toronto – the most expensive housing type was hardest hit by the rules implemented by the province last spring, effectively pulling down the average of all home types. Sales in the luxury home segment have also plummeted, with only half as many homes in the $2-million-and-up range changing hands.
Reveals Seasonal Market Growth
However, shorter-term data paints a much cheerier picture, with month-to-month numbers showing double-digit sales improvement across all home types, and price increases for most from February. It’s indicative of a strong spring season to come, says TREB Director of Market Analysis Jason Mercer, who adds that compared to last year’s over-inflated market, any current stats are going be appear depressed.
“Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months,” he says. “It makes sense that we haven’t seen prices climb back to last year’s peak. However, in the second half of the year, expect to see the annual rate of price growth improve from Q1, as sales increase relative to the below-average level of listings.”
Check out year-over-year and month-over-month sales and price levels in the GTA compared to March 2017 in the infographic below: