It looks like the slightly lower home prices that the city was enjoying (depending on whether you’re buying or selling, of course) at the very beginning of the year are not going to persist into spring.
According to data recently released by the Toronto Real Estate Board (TREB), sales are down but prices are up.
TREB recorded 5,175 residential transactions in February 2018–down 34.9 percent compared to the record 7,955 sales reported in February 2017 (you might recall the hotter than hell winter 2017 market and the outrageous bidding wars it quickly became famous for).
The number of new listings totaled 10,520, a 7.3 per cent increase compared to the 9,801 new listings entered in February 2017.
That said, listings were still lower than average.
“When TREB released its Outlook for 2018, the forecast anticipated a slow start to the year compared to the historically high sales count reported in the winter and early spring of 2017,” said Tim Syrianos, president, TREB.
“Prospective home buyers are still coming to terms with the psychological impact of the Fair Housing Plan, and some have also had to reevaluate their plans due to the new OFSI-mandated mortgage stress test guidelines and generally higher borrowing costs.”
As far as prices go, houses are becoming slightly more expensive month-over-month.
TREB says home prices are up 3.2 per cent on a year-over-year basis for the TREB market area as a whole. As in previous months, this price growth was driven by the apartment and townhouse market segments–with annual benchmark price increases of 18.8 per cent and 7.5 per cent respectively.
Since condos and townhouses are more affordable than detached and semi-detached houses, their growing popularity–and value–makes sense.
Unsurprisingly, single-family detached and attached benchmark prices were down slightly compared to February 2017.
TREB says the overall average selling price was down 12.4% year-over-year, hitting $767,818.
That said, TREB says that it’s important to note that February 2017 was an outlier.
“As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year,” said Jason Mercer, TREB’s director of market analysis.
“Expect stronger price growth to continue in the comparatively more affordable townhouse and condominium apartment segments. This being said, listings supply will likely remain below average in many neighbourhoods in the GTA, which, over the long-term, could further hamper affordability.”
In terms of numbers specific to the entire GTA, a detached house in the 905 currently costs about $911,065 (way up from $879,048 in January). A semi costs about $648,338 (up from $638,899), towns are selling for $600,671 (a little up from $588,439) and condos are costing buyers about $435,216 (up from $421,927 in December).
So while the market is more balanced than it was this time last year, expensive housing remains a concern.
“It is encouraging that the City [of Toronto] did not include demand-oriented tax policies in its budget,” said Syrianos.
“TREB believes that all levels of government need to collaboratively develop solutions to increase the supply of housing, especially the ‘missing middle.’ This was noted in our 2018 Market Year in Review and Outlook Report, which calls for more ‘gentle density,’ including housing types like semi-detached houses, townhouses, multiplexes and apartments.”
It’ll be interesting to see how prices change once spring hits.