While the real estate market in Brampton and beyond has become known for its costliness, it’s actually remained somewhat steady in terms of price fluctuations over the past few months. And although prices are high (albeit not as high as they were in the chaotic winter months of 2017), some prospective homeowners are taking comfort in the fact that they aren’t rising significantly month-over-month.
But while there wasn’t a major price hike or drop between May and June, a recently released survey suggests prices could climb over the next few months. In fact, the Royal LePage House Price Survey1 and Market Survey Forecast says buyers can expect to see price hikes of 2.1 per cent over the next three months.
But while the survey notes that prices could climb, it points out that sales activity and price appreciation across the GTA continued to slow in the second quarter of 2018 (especially when compared to the heightened pace we saw the same time last year).
“During the second quarter, the aggregate price of a home in the GTA decreased by 1.9 per cent year-over-year to $821,632,” the survey reads.
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“When broken out by housing type, the median price of a two-storey home decreased by 3.7 per cent year-over-year to $955,395, while the median price of a bungalow decreased 3.7 per cent year-over-year to $799,307. During the same period, the median price of a condominium within the region saw by far the most significant price appreciation, surging 8.7 per cent to $504,073.”
On a quarter-over-quarter basis, the aggregate price of a home in the GTA did increase–but only by 1.1 per cent, while the median price of a two-storey home and bungalow increased by 0.7 per cent and 0.3 per cent, respectively.
Not unexpectedly, condominiums (the last affordable home type) continued to appreciate ahead of all other housing types, increasing by 3.9 per cent quarter-over-quarter.
In the second quarter of 2018, sales slowed down–likely because buyers were afraid to touch the market following the implementation of the OSFI’s mortgage stress test regulations (regulations that will require buyers to qualify at much higher rates to be approved for mortgages).
“Activity in the GTA has begun to normalize in the second quarter of 2018,” said Chris Slightham, president, Royal LePage Signature Realty. “However, while the new mortgage rules have increased inventory levels providing some relief to buyers, reduced purchasing power has forced many to adjust their expectations.”
Slightham added that despite these changes, well-priced homes with access to amenities continue to sell quickly and receive multiple offers.
Looking ahead to the next quarter of 2018, Royal LePage forecasts that the aggregate price of a home in the GTA will rise by 2.1 per cent quarter-over-quarter to $838,984 as buyers return to the market.
Here’s what’s happening in the GTA:
As expected (based on patterns if nothing else), home values in the City of Toronto increased in the second quarter of 2018.
Royal LePage says the area is still seeing a surge in activity within the condominium market, especially among millennial buyers (buyers who have likely given up on entering the low-rise home market). The aggregate home price in the region rose by 3 per cent year-over-year to $859,489. Over the same period of time, the median price of a condominium increased 9.3 per cent year-over-year to $552,835.
Interestingly enough, Brampton continued to see a balanced market in the second quarter of 2018.
“Many new Canadians, first-time buyers and young families remain attracted to the region’s relative proximity to the city core in conjunction with affordable detached two-storey homes,” the survey reads.
Royal LePage says the Mississauga and Oakville real estate markets entered a cooling period in the second quarter of 2018.
The survey finds that the aggregate price of a home in Mississauga and Oakville decreased 0.1 per cent and 5.3 per cent year-over-year to $733,084 and $1,059,388, respectively.
“Mississauga remains an attractive region for new Canadians and young families, especially first-time buyers looking to secure a detached two-storey home,” the survey reads. “Inventory levels in Oakville’s housing market increased during the second quarter. However, well-priced homes in the region still continued to field multiple offers and sell quickly.”
Royal LePage says home price appreciation in nearby Milton flattened in the second quarter.
“However, the town’s booming smart manufacturing economy continues to attract many families to the region,” the survey reads.
“The aggregate home price within the city remained relatively healthy over the quarter, decreasing 3.8 per cent year-over-year to $724,346.”
Nationally, price appreciation slowed across Canada in the second quarter of 2018, marked primarily by softness in the GTA.
“It was a spring market that never blossomed,” said Phil Soper, president and CEO, Royal LePage. “As anticipated in our original 2018 forecast, the new federal mortgage stress-test measures slowed the market to a standstill in much of the country, as some families adjusted their expectations in a world with lower borrowing capacity, and others not impacted by the OSFI regulations moved to the sidelines, adopting a ‘wait and see what happens to home prices’ approach.”
The Royal LePage National House Price Composite, compiled from proprietary property data in 63 of the nation’s largest real estate markets, showed that the price of a home in Canada increased 2.0 per cent year-over-year to $613,968 in the second quarter of 2018.
“The market has begun to absorb and adjust to the new realities; we expect an uptick in sales volumes and prices during the second half of 2018,” Soper says.
“The fundamentals have not changed. The economy is strong and unemployment is very low. We face shortages in our major cities, with many more people looking for homes than the market has available for purchase or rent. Upward pressure on prices will likely return to most markets this quarter.”
It’ll be interesting to see how the market fares in the coming months.