2017 Sees an 18.3% Decline in Sales Volume
This is the recently released report from TREB:
GTA REALTORS® Release December/Annual Stats
TORONTO, ONTARIO, January 4, 2018 –
Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 92,394 sales through TREB’s MLS® System in 2017. This total was down 18.3 per cent compared to the record set in 2016.
Record sales in Q1 were followed by a decline in Q2 and Q3 after the Ontario Fair Housing Plan (FHP) was announced. The pace of sales picked up in Q4, as the impact of the FHP started to wane, and some buyers arguably brought forward their home purchase in response to the new OSFI stress test guidelines effective January 1, 2018.
“Much of the sales volatility in 2017 was brought about by government policy decisions. Research from TREB, the provincial government and Statistics Canada showed that foreign home buying was not a major driver of sales in the GTA.
However, the Ontario Fair Housing Plan, which included a foreign buyer tax, had a marked psychological impact on the marketplace. Looking forward, government policy could continue to influence consumer behavior in 2018, as changes to federal mortgage lending guidelines come into effect,”
said Mr. Syrianos.
The average selling price for 2017 as a whole was $822,681 – up 12.7 per cent compared to 2016. This annual growth was driven more so by extremely tight market conditions during the first four months of the year. In the latter two-thirds of 2017, fewer sales combined with increased listings resulted in slower price growth.
In December, the MLS® Home Price Index (HPI) Composite Benchmark was up by 7.2 per cent year over year, and the overall average selling price was up by 0.7 per cent year over year.
“It is interesting to note that home price growth in the second half of 2017 differed substantially depending on market segment. The detached market segment – the most expensive on average – experienced the slowest pace of growth as many buyers looked to less expensive options. Conversely, the condominium apartment segment experienced double-digit growth, as condos accounted for a growing share of transactions,”
said Jason Mercer, TREB’s Director of Market Analysis.
The 18.3% decline in the number of transactions is significant. It is noteworthy that TREB has moved off the editorialized “banner” on the article. Here’s it’s simply the “December Stats”. No real pejorative comments here! That’s important.
Here are the average sale prices as reported by TREB for single family homes of all types in the GTA, including houses, townhouses and apartments:
Average for year $805,198
2017 was a rather volatile year. The average price of $805,198 for the year is simply a “mathematical” average of the twelve months. It places undue weight on the Spring numbers which have now “come and gone”.
The year end closing number of $735,021 is a better indication of where the real estate market sits at the present time. That’s 9.6% difference!
The market started out at $730,124. That‘s the 1 January number, actually 31 December 2016. So, we have an increase of $4,897 over the year. It’s positive, not negative. The January number you see here is 31 January 2017.
The market rose up to $918,138 at the end of April. That’s up about 25.77% in four months from the beginning of the year.
So, was that increase “real” or “imaginary”? Likely, it wasn’t real because it virtually disappeared.
Brian Madigan LL.B., Broker