Tag: GTA

Toronto Real Estate Review & Outlook Report 2018

Toronto Real Estate Roller-coaster ride

Toronto Real Estate was on the roller-coaster ride in 2017. Rapid price appreciation defined the market during the first 4 months of the year before buyer concerns over affordability prompted the Ontario government to introduce their 16-point ‘Fair Housing Plan’ in April. Following the introduction of new regulations, including a 15% tax on foreign buyers, market activity and price appreciation slowed significantly and the market shifted downwards as many took a wait-and-see approach to assess the long-term impact of the changes.

Toronto Real Estate Board (TREB) reported this month that detached house prices fell 3.9% in the city and 12.0% in the suburbs for a total of a 9.1% drop. Communities in York Region including Richmond Hill, Markham, and Aurora – that had the biggest price run-up from 2016 into 2017, have faced some of the biggest declines since the GTA housing market began a downturn last Summer, and the pressure is likely to continue into 2018. The average detached home price was still a whopping $970,823:

Toronto Real Estate Board - Market Watch - February 2018
This drop was mitigated by a rise in condo prices so the total for all home types was just a 4.1% year-over-year decline.

Real Estate trends in numbers

New 2018 OSFI mortgage underwriting rules (a.k.a ‘stress test’) are anticipated to further reduce home buyers’ purchasing power, which will continue to push families:

  1. out of the GTA,
  2. into the condos, or
  3. towards renting,

because affordability is expected to be the dominant concern in 2018.

1. Leaving the GTA

Much of the activity in regional markets across Ontario was fuelled by price appreciation in Toronto. As people are searching for the balance between the home features and affordability, many are looking outside of the Toronto Area. These “move-over buyers” leaving the GTA have contributed to increased demand & considerable year-over-year average price increases in:

  • Niagara (23%),
  • Barrie (19%),
  • Durham Region (19%),
  • London-St. Thomas (18%),
  • Hamilton-Burlington (15%),
  • Ottawa (9%), and
  • Kingston (8%).

2. Condos fueling the GTA market

Despite the low-rise price decreases in the GTA, prices remain out of reach for many buyers… which increases competition for the condo units… and drives condo prices up:

  • The average selling price for condominium apartments was up by 14.8% year-over-year this January to $507,492.

3. Renting getting more expensive

According to TREB’s last Rental Market Report, the average rent for a 1-bedroom condo in the GTA was up by 10.9% on an annual basis to $1,970 in Q4 2017. The average 2-bedroom condominium apartment rent was up by 8.8% over the same period to $2,627.

Toronto Real Estate Outlook

As we move into the Spring, expect the pace of home sales to pick up as the psychological impact of the ‘Fair Housing Plan’ starts to wane, and homebuyers find their footing relative to the new ‘Stress Test’ for mortgage approvals (through the Federally regulated lenders). With January 2018 sales being off last year’s record peak – it’s easy to forget that we still have a broader housing supply issue in the Greater Toronto Area.

Prospective homeowners may disagree, but industry players don’t feel Toronto is too expensive – certainly not in comparison to current world-class markets, including Vancouver. Most foresee continued immigration and investment, foreign and domestic, contributing to upward pressure on prices overall. And while there may be temporary price dips, no one should expect a major pullback in prices – barring an unexpected event that upsets the global economy, or a major change in government policy.

Resources

  1. PwC Canada – Trends in Canadian Real Estate 2018 www.pwc.com/ca/en/industries/real-estate/emerging-trends-in-real-estate-2018.html
  2. RBC Economic Research –
    Canadian Housing Reports www.rbc.com/economics
  3. RE/MAX – 2018 Housing Market
    Outlook blog.remax.ca/remax-2018-housing-market-outlook
  4. Toronto Real Estate Board – Market Year in Review & Outlook Report communications3.torontomls.net/auth2/mediafiles/Market-Year-in-Review/pdf/2018-YearInReview_interactive_2clm.pdf
  5. Toronto Real Estate Board – TREBNews Releases www.trebhome.com/market_news/release_market_updates/news.htm
  6. Jasmina ZivKovic Real Estate Team – News you can use www.facebook.com/ZivKovicTeam/posts

Global warming felt in Toronto Real Estate

Toronto Area Home prices keep increasing like temperatures in global warming, with no “cooling-off” in sight. Price increases make sellers feel great, but they are forcing home buyers to look for deals further and further out of the city core – new Toronto Real Estate Board (TREB) housing stats show that January 2015 to January 2016 home price index (HPI) has increased the most the further out you go of The City. This is especially true for singles, semis and townhouses, where there has been a persistent lack of inventory. Just look at this chart:


Plus, a recent survey conducted by Ipsos Canada finds that 12% of GTA households are seriously considering the purchase of a home in 2016, because they continue to see home ownership as an affordable long-term investment.

So, buckle in for another year of bidding wars and rising home prices…

Groundbreaking Report

All of this plus the 2016 Market Outlook, Homeowners & Homebuyer Surveys are covered in the 73-page report – just published by TREB. Another central aspect of this groundbreaking report examines the growth, continuity, livability and housing affordability of the GTA and the greater Golden Horseshoe region. TREB reached out to government leaders and other stakeholders from across the region to determine what needs to be improved to retain the region’s competitive position on the world stage. PDF format to download your copy.