Say Goodbye to Last Year’s Roller Coaster Market.
Toronto’s real estate market took quite a roller coaster ride in 2017: Record sales – a holdover from 2016 – extended into the first quarter of 2017. This was followed rapidly by a decline in the second and third quarters, as buyers stayed on the sidelines confused by the Ontario Fair Housing Plan. Then Q4 showed signs of recovery. All in all, it’s been quite a year.
The Toronto Real Estate Board (TREB) reports that total sales in 2017 dropped by 18.3% over 2016 to 92,394. Price growth slowed somewhat towards the end of the year as listings began to increase, with the average price totalling $822,681, up 12.7% over 2016.
In December 2017, total sales declined by 7.1% to 4,930, with the biggest impact on detached properties (down 13.6%) and condo apartments (down by 9.5%). December’s average price ($735,021) managed an increase just this side of positive at 0.7%, but prices of condo apartments in 905 and 416 increased by 14.5% and 14.1% respectively.
New federal mortgage lending guidelines came into effect January 1, 2018, and may have pushed up December sales, suggests TREB. Now that they’re in effect, some buyers could find they can’t afford as much home as previously, or decide to wait until their financial position improves to buy their dream home.
That said, it certainly looks like the roller coaster ride in 2018 will be more sedate than that of 2017.
Condos: A Great Choice Despite 2017’s Volatility.
Condos came off a very up-and-down year for real estate in the GTA, showing great strength in the face of the provincial government’s Fair Housing Plan (FHP) and its efforts to rein in the market.
According to the Toronto Real Estate Board (TREB), 2017 was volatile, thanks to government policy changes, in particular, the FHP. After a record year in 2016, year-over-year home sales fell 18.3% to 92,394.
While buyers paused to consider the impact of the FHP, listings began to rebound, and the announcement of new mortgage rules effective January 1, 2018, may have spurred sales at the end of the year by buyers hoping to avoid the guidelines. The average price in 2017 rose by 12.7% to $822,681.
As Jason Mercer, Director of Market Analysis for TREB, points out: “The detached market segment … experienced the slowest pace of growth… Conversely the condominium apartment segment experienced double-digit growth, as condos accounted for a growing share of transactions.”
In December 2017, condo sales declined by 9.5% (down 8.8% in 416 and down 11.4% in 905).
That said, other housing types struggled with average price declines, such as -2.8% for detached homes in Toronto and -2.4% for detached homes in the rest of the rest of the GTA. Condos, however, averaged a 14.4% increase overall (14.1% in 416 and 14.5% in 905).
So will new mortgage guidelines affect condo sellers/buyers negatively? Perhaps not. Stay tuned.
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