A string of winter storms and the lingering effect of tougher mortgage rules led to fewer deals in February, as buyers and sellers likely await the warmer spring market to make their move.
The latest report from the Toronto Real Estate Board (TREB) reveals a total of 5,025 homes sold over the course of last month, a -2.4% decline from the same period in 2018. While real numbers reveal that’s a 25% uptick from January activity, TREB says monthly levels are actually down 7.7% with seasonal adjustment taken into account.
Home Prices Up Slightly Y-o-Y
The average price rose modestly by 1.6% to $780,397, and also marked a month-over-month improvement of 4.2%. However, it was a drop in supply that tightened conditions across the TREB region as new listings fell -6.2% with 9,828 homes brought to market, and overall inventory coming in 0.6% lower than last year, with a total of 13,284 homes available. That brought the sales-to-new-listings ratio for the region to 51%, indicating a balanced market.
Slower sales were also recorded in the City of Toronto proper, down -6.6% with 1,879 homes sold, though the average price continues its upward trajectory, rising 4.1% to $840,211. New listings fell -2.5%, pushing the 416 closer to sellers’ market territory, with a ratio of 56%.
Sales trends were mixed throughout the 905 region; for example, activity rose in the Burlington real estate market by 11.7%, though fell -29% for neighbouring Oakville real estate. Mississauga real estate also experienced a robust 8.7% uptick in sales.
Condos and Semi-Detached Homes See Strongest Price Improvement
As has been the long-term trend, condos were a main contributor to price growth in the GTA, with the average unit up 6.1% to $562,161 despite a -5.7% decline in sales. However, they remain priced well below the average detached home, which, despite a -2.1% dip, cost $980,914 in February. Sales for single-family homes were roughly flat, down 0.8% year over year with 2,171 sold.
Townhouses saw sales fall -6% at 793 units, softening the average price by 0.5% to $635,693. Semi-detached house prices saw the greatest improvement, up 9.9% to an average of $832,569. However, due to comparably overall lower inventory than other home types– just 456 units sold (+1.8%) – trends for this segment can swing more dramatically.
TREB Pushes for Housing Affordability to be Election Issue
TREB points to sustained strength in the condo market as an indicator that buyers continue to be challenged by the federal mortgage regulator’s stress test, which tacks roughly 2% onto the mortgage rate buyers must prove they can afford when qualifying for home financing. The result has been chopped home buying budgets, forcing many to downsize their home type expectations, or leave the market altogether.
“The OSFI-mandated stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy,” stated TREB President Garry Bhaura. He adds that with the federal election pending this fall, a review of the measure should be considered as part of federal parties’ campaign platforms, along with reducing the maximum mortgage amortization to 30 years for buyers putting less than 20% down on their home purchase; currently, the maximum is capped at 25 years.
Check out the infographic below to see how TREB home sales by property type performed on an annual and monthly basis:
