May offered a brief uptick from what has been a sluggish spring market, but things have slowed once again in the first two weeks of June, suggesting the typically busy real estate season has been cut short.
The Canadian Real Estate association reported this month that the combined sales for the period between March and May hit a nine-year low, as the market continues to absorb the correction introduced by the Ontario Fair Housing Plan last April. Now, as the – usually quieter – summer season approaches, it could mean softer market conditions to last until at least September, and the back-to-school sales bump.
While year-over-year sales are looking much improved from the double-digit declines recorded over the last 12 months, that’s largely due to the market now aligning with the slowdown that occurred last summer, rather than as a direct comparison to the market’s peak in the first half of 2017. Rather, sales are down -3 and -2 per cent respectively throughout the entire region and City of Toronto.
However, slowing market conditions are more evident in the month-over-month comparison, with activity plunging between -9 and -29 per cent across all home types when compared to the first two weeks of May.
June 2018 Mid-Month Market Report
Check out the month-over-month and year-over-year differences in the Toronto real estate market in the infographic below:
Condos Start to Slow
Sales for high-rise and multi-family dwellings dropped sharply compared to the same time period in May, when the segment posted monthly gains of nearly 50 per cent in both throughout the TREB region and the 416. Rather, sales in both regions have dropped -29 per cent each month over month, though are roughly flat from activity in 2017. There’s also considerably less inventory for buyers to work with, down -17 and -18 per cents in both regions. This could suggest fewer sellers looking to list in a seemingly softer market.
Detached Sees Steady Demand
However, demand has been steadily strengthening for single-family and low-rise housing, after being hit hardest by the Ontario Fair Housing Plan in terms of sales and prices. Mid-month June sales are just 2 per cent below last year’s levels in both regions. This may indicate house-buying hopefuls, who were priced out of the market during its 2016 – 2017 peak, maybe be returning amid slightly lower prices, and considerably looser competition, as many of the GTA markets experience a buyers’ market. However, sales are down -15 and -11 per cents from a strong performance in May, and the number of homes available for sale was scaled back -7 per cent in the TREB region, and -5 per cent in the City of Toronto.
Semi-detached In Line With Last Year
The strongest activity seen thus far this month has been in the semi-detached segment, though it’s a proportionately smaller slice of the market with overall fewer sales at 297 in the TREB region, compared to 1,330 detached homes sold. Activity has been flat year-over-year, but down -18 and -10 per cents from mid May.
Townhouses See Modest Gains
While sales throughout the overall TREB region fell -7 per cent from last year, they actually posted a gain of 1 per cent in the City of Toronto. This again is due to an overall smaller market segment, with just 454 units sold throughout TREB, and 162 within the 416, meaning any activity has a larger impact on sales data. Month over month, sales are down -12 and -9 per cents, further supporting an overall slower June market.
Penelope Graham is the Managing Editor at Zoocasa, and has over a decade of experience covering real estate, mortgage, and personal finance topics. Her commentary on the housing market is frequently featured on both national and local media outlets including BNN Bloomberg, CBC, The Toronto Star, National Post, and The Huffington Post. When not keeping an eye on Toronto's hot housing market, she can be found brunching in one of the city's many vibrant neighbourhoods, travelling abroad, or in the dance studio.