The lingering effects of the Fair Housing Plan continue to be felt in the Toronto spring real estate market, with April sales and prices underperforming last year’s scorching activity by double digits. A total of 7,792 homes were sold last month, a 31.1-per-cent drop from the same time in 2017, while the average price is down 12.4 per cent to $804,584.
The Toronto Real Estate Board points to a combination of changing market conditions, as well as a greater number of less expensive homes being sold, as the factors behind softer prices; luxury homes selling for $2 million or more made up only 5.5 per cent of sales, roughly half of the 10 per cent they accounted for last year.
Related Read: GTA March Home Sales Fall 40% From 2017
Fewer High-End Homes Skew Price Average
As the much of the price change is due to the shifting mix of home type sales, the overall MLS Home Price Index – which tracks longer-term home price trends, has declined just 5.2 per cent.
Tim Syrianos, TREB president, says this reflects steady growth over time, and that the underlying market fundamentals are in place to support further market appreciation.
“While average selling prices have not climbed back to last year’s record peak, April’s price level represents a substantial gain over the last decade,” he says. “Recent polling conducted for TREB by Ipsos tells us that the great majority of buyers are purchasing a home within which to live. This means buyers are treating home ownership as a long-term investment. A strong and diverse labour market and continued population growth based on immigration should continue to underpin long-term home price appreciation.”
The Last Pre-FHP Comparison
TREB’s Director of Market Analysis, Jason Mercer, emphasizes that once the market moves beyond year-over-year comparisons to pre-Fair Housing Plan conditions, sales trends should smooth out and set the stage for a strong second half of the year.
“The comparison of this year’s sales and price figures to last year’s record peak masks the fact that market conditions should support moderate increases in home prices as we move through the second half of the year, particularly for condominium apartments and higher density home types,” he says. “Once we are past the current policy-based volatility, homeowners should expect to see the resumption of a moderate and sustained pace of price growth in line with a strong local economy and steady population growth.”
Toronto Home Sales by Property Type: April 2018
Check out the infographic below to see year-over—year and month-over-month April sales trends for the City of Toronto and Greater Toronto Area:
April a Cooler Month over March
While the GTA market has made steady monthly gains since January, April activity was fairly flat, with inclement weather putting a damper on open houses and home buyer ambitions. However, sales growth was positive across most home types, with moderate price appreciation in the most coveted regions.
Detached homes led the market in the 416, with sales up 16 per cent and a 4.7-per-cent price increase to an average of $1,354,719. Semi-detached followed with a 12.3-per-cent increase in sales, though the average price fell very slightly, by 1 per cent, to $1,021,986.
Condo apartments, which have led the market thus far in 2018, had a relatively flat month, with just a 0.1-per-cent sales uptick and a 1.9-per-cent price increase to $601,211. Condo townhouses were the only housing type to experience a decline in sales, with 5.1-per-cent fewer units changing hands, though prices increased nearly 5 per cent, to an average of $682,916.
Detached home sales also dominated the TREB region as a whole, with sales up 10.6 per cent, and the average price increasing 2.4 per cent from March to $1,003,103. Condo townhouses saw the second-strongest sales increase, up 7.8 per cent, though the average price softened moderately by 0.4 per cent to $571,856. Semi-detached home sales increased 4.1 per cent, with prices up 1.2 per cent to $792,385. Condo activity was flat, with sales and price growth at 1.6 and 1.5 per cents, respectively, with the average unit now fetching $559,343.
GTA Markets Remains Balanced
The total TREB region remains in balanced territory with a sales-to-new-listings ratio of 47 per cent. However, conditions in the 416 hinge on sellers’ market territory, with a ratio of 58.3 per cent. (This ratio is calculated by dividing the number of sales by the number of new listings over a certain time period, in a specific region. According to the Canadian Real Estate Association, a ratio between 40 – 60 per cent indicates a balanced market, with below and above that threshold revealing buyers’ and sellers’ conditions, respectively.)
York region, which has borne the greatest softening following the Fair Housing Plan, remains in buyers’ territory at 32 per cent, followed by Simcoe, at 34 per cent. Peel, Durham, and Halton all remain in balanced territory with ratios of 52, 48, and 47 per cents.