Photo: James Bombales
It was a turbulent year for Toronto real estate, with policy changes at the national level impacting the local housing market, condo and detached home prices moving in opposite directions and listings dropping dramatically.
Released today, the full-year sales and pricing figures reported by GTA realtors to the Toronto Real Estate Board (TREB) for 2018 were both down when compared to the previous year. Residential transactions numbered 77,426, down 16.1 percent from the 2017 total while the overall average sold price for a GTA home was $787,300, down 4.3 percent from 2017.
There were a few bright spots when narrowing the focus to high-performing housing types and areas of the region. Zeroing in on the City of Toronto — which TREB terms the “416” — the average home price saw a slight increase over the previous year thanks to sustained upward price momentum in the city’s more affordable condo apartment market. Condos made up a much larger proportion of total sales in the 416 than the suburban 905 area, which saw an overall price decline.
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In a media release accompanying the 2018 figures, TREB president Garry Bhaura blames the year’s lacklustre numbers on rising interest rates that pushed buyers to the sidelines by making it harder for them to borrow. He also points to the federal government’s new mortgage stress test, introduced at the beginning of the year, which made it tougher for buyers to qualify for a mortgage.
“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,” says Jason Mercer, TREB’s Director of Market Analysis and Service Channels, in the release.
“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 strongest for less-expensive home types, as many home buyers sought more affordable home ownership options.”
TREB will publish its 2019 Toronto housing market outlook in early February. As of late last year, Bhaura had been touting regional economic strength and population growth as boons to housing that should support rising sales “well into” 2019.
However, the consensus around mortgage rates is they will continue to rise as the Bank of Canada continues to hike its influential overnight rate through the new year. This friction will put a damper on housing activity, which is unlikely to return to the soaring peaks seen in 2016 and early 2017.