Greater Toronto Market Increases 2.09% over 2018
This is the recently released report of the Toronto Rea Estate Board concerning the December 2018 results:
December and 2018 Annual Statistics Released January 4, 2019 –
Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported a total of 77,426 residential transactions through TREB’s MLS® System in 2018.
This result represented a 16.1 per cent decline compared to 92,263 sales reported in 2017. Total new listings entered into TREB’s MLS® System were down by 12.7 per cent over the same period to 155,823. The overall average selling price for 2018 transactions, at $787,300, was down by 4.3 per cent year-over-year for all home types combined across the TREB market area.
Home prices were up very slightly in the City of Toronto and down in the surrounding GTA regions. This dichotomy reflects the fact that the condominium apartment segment, which accounted for a large proportion of sales in the City of Toronto, performed better from a pricing perspective than the detached market segment. The average price for condominium apartment sales across the TREB market area was up by 7.8 per cent year-over-year.
“Higher borrowing costs coupled with the new mortgage stress test certainly prompted some households to temporarily move to the sidelines to reassess 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,”
said Garry Bhaura.
“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. 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 strongest for less expensive home types, as many home buyers sought more affordable home ownership options,”
said Jason Mercer, TREB’s Director of Market Analysis
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 starting at the beginning of 2018 until now:
Average Prices Month
$734,837 January 1st
$735,874 January 31st
Let’s just do the quick analysis. The year started with $734,837 and ended with $750,180, that’s an increase of $15,343 which is 2.09% over the calendar year. Certainly, we have seen larger increases.
Let’s go back to the beginning of 2017. That year started with $730,124 and 2018 ended with $750,180, that’s an increase of 20,056 which is 2.74% over the time period, or half of that per calendar year, namely 1.37% , which of course is even worse.
Volume of Transactions
This is what happened in 2018:
77,426 Total year to date
92,263 all of 2017
113,040 all of 2016
101,213 all of 2015
92,782 all of 2014
The pricing issue is driven by numbers. There are fewer Buyers stepping up to the plate. Prices went up substantially when the demand was high. They are now, still, holding their own, notwithstanding the lower demand. Buyers are settling for less than what they expected a few years ago.
Expectations for 2019
Here’s how the market usually goes, all things being equal (and they never are):
- The market increases in January, February, March and April,
- reaches a peak in May (1st,15th, 31st ),
- decreases June, July and August,
- increases in September and October and
decreases again in November and December.
The economy is good. Interest rates are attractive. Properties are reasonably affordable. Immigration will be about 250,000 and those people need to live somewhere. We are running out of surface land.
This all speaks to the fact that longer term, real estate will prove to be an excellent investment. However, if you had been thinking of selling, 2016 and the Spring of 2017 were “prime time”. Without exponential increases on the immediate horizon, this is still a good time to sell. If it can be both a good time to buy and a good time to sell, then, we have a balanced market. That’s what things look like in 2019!
Brian Madigan LL.B., Broker