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2018 Toronto Real Estate Sales May Not Be as Dire as Data Shows

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2018 Toronto Real Estate Sales May Not Be as Dire as Data Shows
3 min. read

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In almost every category, from total transactions to new listings and even selling prices, 2018 Toronto real estate took a hit when compared to 2017. However, a closer look at the second half of the year versus the first half shows that an upswing is already underway.

Transactions and Total Listings Were Down

According to the most recent report from the Canadian Real Estate Association, 77,426 residential transactions were recorded through the Greater Toronto Area MLS system in 2018. This was a decline of more than 16%compared to the 92,263 transactions in the previous year. At 155,823, the total number of new listings was down more than 12% as well.

Prices Were Up in the City of Toronto but Fell in Surrounding Areas

Throughout the Greater Toronto Area (GTA), the average selling price for a residential property in 2018 was $787,300, a reduction of 4.3% compared to 2017. However, within the City of Toronto itself, home prices went up slightly.

This difference relies on Toronto condos, which accounted for a large portion of sales within the city and performed much better than Toronto detached homes and other property types within the region. In fact, the average price for a condo within the GTA was up nearly 8% compared to 2017 prices.

Several Factors Are to Blame for the Drops

According to Gary Bhaura, president of the Toronto Real Estate Board (TREB):

“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,” as cited on the CREA website.

As the Bank of Canada changes tactic to slow interest rate hikes, experts expect shifts in the real estate market.

The Second Half of 2018 Showed More Promising Results

While the drop in transactions and most real estate prices could be concerning on the surface, Bhaura noted that:

“It is important to note that market conditions were improved in the second half of the year, both from a sales and pricing standpoint.”

Jason Mercer, the Director of Market Analysis and Service Channels for TREB, also added for CREA:

“After spiking in 2017, new listings receded markedly in 2018. In many neighbourhoods, despite fewer sales from a historical perspective, some buyers still struggled to find a home meeting their needs.  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 homeownership options.”

A Side by Side Comparison of Q4 Data

To more closely consider the impact of the more promising numbers in the second half of 2018, a close look at the fourth quarter (Q4) data from 2017 and 2018 can be helpful:

Total Sales by Housing Type Q4 2017 vs Q4 2018

Category Units Sold in Q4 2018 Units Sold in Q4 2017 Q4 2018/Q4 2017
% Change in Units Sold
Single Detached Homes 7,565 8,180 -7.5%
Semi-detached Homes 1,729 1,914 -9.7%
Condo Townhouses 1,284 1,507 -14.8%
Condo Apartments 5,191 5,782 -10.2%

Pricing by Housing Type Q4 2017 vs Q4 2018

Category Median price Q4 2018 Median Price Q4 2017 Q4 2018/Q4 2017
% Change in Median Price
Single Detached Homes $845,000 $825,000 +2.4%
Semi-detached Homes $712,500 $679.250 +4.9%
Condo Townhouses $530,000 $500,000 +6%
Condo Apartments $493,000 $450,000 + 10%

 

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