A chilly holiday season has capped off an overall slower year for the Greater Toronto Area real estate market, according to the latest report from the Toronto Real Estate Board.
The December numbers reveal sales fell 22.5% from 2017 last month, with a total of 3,781 homes changing hands across the region. However, as new listings also fell considerably – only 4,308 homes were brought to market, marking a plunge of 31.5% – prices remained fairly stable, ticking up 2.1% to an average of $750,180.
Compared to November, activity was down 39%, though overall market conditions remain in steep sellers’ territory, with 87% of all homes listed during the month sold. It was a similar picture in the City of Toronto proper, which saw sales fall 24% at 1,473 units, and a price uptick of 2.9% to $762,627, and in the 905 markets, where sales are down 21% to 2,308 units, and prices rose 1.5% to $742,237.
Fewer Homes for Sale Keeping Prices Stable
Much tighter supply conditions propping up home values has been a consistent theme throughout the year says TREB’s Director of Market Analysis and Service Channels Jason Mercer; more sellers opted to stay out of the 2018 market, resulting in squeezed inventory and a lack of choice for buyers. That’s in turn put upward pressure on prices and has influenced buying trends, such as boosting popularity for Toronto condos.
“After spiking in 2017, new listings receded markedly in 2018. In many neighbourhoods, despite fewer sales from a historic perspective, some buyers still struggled to find a home meeting their needs,” he states. “The result was a resumption of a moderate year-over-year pace of home price growth in the second half of the year. Price growth was the strongest for less expensive home types, as many home buyers sought more affordable home ownership options.”
Year-Over-Year Market Down
Annual new listings were down 12.7%, with a total of 155,823 homes listed for sale over the course of 2018. That helped offset the year-over-year 16.1% decline in sales, with 77,426 homes sold, and kept prices from plunging too steeply; the average fell 4.3% compared to last year, at $787,300. However, they trended higher within the 416 and surrounding markets, mainly due to a large proportion of condo sales and value appreciation of 7.8%. That led to a slight 0.1% increase in the City of Toronto to an average price of $835,422, as sales fell 15%.
However, the 905 markets continued to see values droop, with the average down 7.1% to $757,086, and a 16.7% decline in sales.
Mortgage Hurdles Have Influenced Home Buying Trends
As well, the impact of federal mortgage rules introduced last January, combined with a rising national interest rates, continue to be felt throughout the market. TREB President Garry Bhaura says that’s resulting in less purchasing power for buyers, and influenced some to put off their home purchase, or sideline it altogether, especially during the first half of 2018.
“Higher borrowing costs coupled with the new mortgage stress test certainly prompted some households to temporarily move to the sidelines to reassess their housing options,” he stated. “With this said, it is important to note that market conditions were improved in the second half of the year, both from a sales and pricing standpoint.”
December Toronto Home Sales by Property Type
