Toronto and GTA Markets Accelerate in January 2019
This is the recently released report of the Toronto Real Estate Board concerning the January 2019 results:
GTA REALTORS® Release January Stats TORONTO, February 6, 2019 –
TREB President Garry Bhaura announced that Greater Toronto Area REALTORS® reported 4,009 home sales through TREB’s MLS® in January 2019 – up by 0.6 per cent compared to January 2018. On a preliminary seasonally adjusted basis, sales were up by 3.4 per cent compared to December 2018.
“It is encouraging to see the slight increase in January transactions on a year-over year basis, even with the inclement weather experienced in the GTA region during the last week of the month. The fact that the number of transactions edged upwards is in line with TREB’s forecast for higher sales in calendar year 2019,”
said Mr. Bhaura
The MLS® HPI Composite Benchmark price was up by 2.7 per cent compared to January 2018. The condominium apartment market segment continued to lead the way in terms of price growth. The average selling price was up by 1.7 per cent on a year-over-year basis. After preliminary seasonal adjustment, the average selling price edged lower compared to December 2018.
“Market conditions in January, as represented by the relationship between sales and listings, continued to support moderate year-over-year price increases, regardless of the price measure considered. Given housing affordability concerns in the GTA, especially as it relates to mortgage qualification standards, we have seen tighter market conditions and stronger price growth associated with higher density low-rise home types and condominium apartments, which have lower average selling prices compared to single detached homes,”
said Jason Mercer, TREB’s Director of Market Analysis.
These are the revised numbers for 2018. Remember some deals that were booked, didn’t close, so the more recent months are often restated. Basically, if you are keeping track my reports posted in previous months will all be “off” by just a bit.
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
$748,840 January 1st
$787,195 January 31st
As we go forward, the reports are posted monthly. That means the correct starting point for January 2018 is actually the day before, namely, December 31st 2017. Same thing with 2019, we really have two numbers for January:
1) the start of the year, and
2) the end of the first full month.
Let’s do a quick analysis. 2018 started with $734,837 and we are now at $787,195, that’s an increase of $52,358 which is 7.13% increase over the thirteen month period. Expressed over 12 months, that’s a 6.58% annualized increase.
Naturally, if we made the calculation specifically over the trailing 12 months, that would be from the end of January 2018, to the end of January 2019, we would have very similar numbers.
The peak in 2018 was $808,066 in June. That number looks to be quite achievable. The valuations which support that pricing level are all available and will be used for the purposes of comparison throughout the Spring market. Right now, we still have 6 more weeks of the Winter market which is historically slower.
Ordinarily, we would reasonably expect about 4,000 transactions in the month of January. In fact, we had 4,009, so that’s good. To a large extent, we are back to normal.
There is still a pent-up demand. The only issue now, is that prices have elevated somewhat. The current rate of increase is 6.58%. If we went back one month, the rate would have been 2.09%. That’s quite an increase, more than triple in one month based on the annualized numbers. So, that’s acceleration! You were going at 20, and now you’re going at 60. Where is it going from here?
This means that some people will have to spend more to get what they want, and others will have to settle for less. This means that prices will increase this year.
Brian Madigan LL.B., Broker