It’s official — January was a pretty icy month for the Toronto real estate market. Sales were down 22 per cent year-over-year, from 5,155 transactions in January 2017 to 4,019 last month.
According to the Toronto Real Estate Board, the slump is a result of new mortgage rules and an interest rate hike.
“TREB released its outlook for 2018 on January 30th. The outlook pointed to a slower start to 2018, especially compared to the record-setting pace experienced a year ago,” writes TREB president Tim Syrianos, in a recent statement.
But, Syrianos is quick to say that things are likely to heat up later in the year.
“As we move through the year, expect the pace of home sales to pick up, as the psychological impact of the Fair Housing Plan starts to wane and home buyers find their footing relative to the new OSFI-mandated stress test for mortgage approvals through federally regulated lenders,” he writes.
For a breakdown of what to expect in the coming months, here are 7 stats that explain what was going on in Toronto real estate last month:
1. Sales were down across property types in January, with the condo market falling 21.9 per cent, while the detached home market dropped 26 per cent.
2. Toronto saw a serious jump in listings last month, with 8,585 units coming on the market, a 17.4 per cent year-over-year increase.
3.TREB points out that, while it’s a big year-over-year increase, it’s still the second lowest level of listings for the month of January in the last 10 years.
4. The MLS Home Price Index Composite Benchmark was up 5.2 per cent year-over-year. According to TREB, the growth is mainly being driven by the condo market, which saw a double-digit year-over-year price increase of 14.6 per cent, bringing the average selling price of a unit to $507,492.
5. Meanwhile, detached house prices dropped 9.1 per cent to $970,823, bringing the average selling price of a GTA home down 4.1 per cent year-over-year to $726,793.
6. “It’s not surprising that home prices in some market segments were flat to down in January compared to last year,” writes TREB director of market analysis Jason Mercer, in a statement. “At this time last year, we were in the midst of a housing price spike driven by exceptionally low inventory in the marketplace.”
7. Mercer predicts that prices will rise in the second half of the year. “It is likely that market conditions will support a return to positive price growth for many home types in the second half of 2018,” he writes. “The condominium apartment segment will be the driver of this price growth.”