March 2018 Toronto Market Update

09 March 2018
Armand Gilks

Aaah. The headline writers are having a field day. There is nothing they like more than a changing real estate market.  So let's try to look past the headlines and share some important information about where we may be heading.

We are seeing some major shifts when we compare this Jan and Feb with last year.  But, please keep in mind that the spring market last year was an anomaly that only comes around probably once or twice in a lifetime. If you were one of the few homeowners fortunate enough to cash in on the ridicously high prices, then good for you. By the same token, you likely bought again in the same market, so for many it was a wash.

If you are selling now, the prices are lower than last year. If you are trading up, then you have a good chance of coming out ahead as higher priced properties are more of a bargain this year. If you are downsizing to a condo, or a smaller house, the numbers may not work to your advantage, but you've likely done very well in long term appreciation on your principal residence.

If you are an investor, that's a whole new conversation that I am not going address at this time. Home ownership should be about long term thinking and not short term ups and downs.

Let's have a closer look to put some perspective on this.

The main reason for the wild swings that we are seeing is the result of government involvement. Last year, many buyers were trying to get into the real estate market tahead of the increased buying restrictions and higher interest rates that were coming.  This generated a buying frenzy.

This year, the combination of the Ontario Fair Housing Plan rules and tighter OFSI mortgage qualifications have either taken some people out of the market, or deterred many people from buying at this point. We expect this to continue over the next few months. The net results......

  • In the Toronto (416) area, sales were -30% vs. last February and the average selling price was -6% to $806,494. 
  • Changes were even more pronounced in the (905) area where sales were -37% and the average selling price was -16% vs. last year at $743,196. 

  • Sales and price declines were the greatest in low rise houses.  In Toronto detached home sales declined -34% and the average price was down -18%. To put some historical perspective on this the average detached selling price in February, $1,282,240, was 6% above the average from two years ago.
  • In (905) detached sales were -43% and average prices -17%. Not unlike Toronto, the average selling price in York region at $910,065 was 7% above February of two years ago.

  • Condo sales were also well below 2017, however, prices continued to rise. Toronto condo sales decreased -30% while the average selling price increased 11%. Versus two years ago the average condo selling price in Toronto was +31

  • (905) condo sales were -33% vs. February 2017 and the average price was up 8%. Average selling prices in the (905) region ranged between 30 and 40% higher than they were two years ago.

Confused yet?  Me too. Basically, we had a really unusual sales year last spring and we will continue to see comparisons like this over the next two to three months. Then we begin comparing apples to apples again.

One very encouraging factor that I did see in all of the current numbers was that despite the trend below last year, the seasonal trend from month to month was still there. 

February sale and prices always increase when compared to December and January. This held true for this year as well. The increases were not as pronounced as normal but they did occur in every neighborhood area that I looked at. I believe that this is a good predictor of what we will see over the next few months.  Still a stronger spring market, but not as strong as we would normally expect.

The bottom line? If you are looking to buy, this is a great time to do that.  If you are selling, be realistic and listen to your Realtors advice about market pricing. 

Please have a look at the tables below for more detailed information.

If you feel like reading further, we also have some tips on how to quickly declutter your space as well as a few of the latest tech trends from the Las Vegas Electronics Show....and how the TTC will help you get home safely on St. Patrick's Day.

Thanks so much for checking out this month's newsletter. Please get in touch if you have any questions or comments regarding the articles, or real estate in general -- it'd be great to hear from you!