A record-setting number of sales in…2016.
It’s no surprise that Toronto’s 2017 sales numbers pale in comparison to the record-setting 2016.
There were almost 20% fewer sales throughout the year in comparison to 2016, with many buyers waiting for prices to bottom out and sellers holding out for long-term price growth.
The slower activity is even more pronounced when we look at the month-over-month numbers. The first few months of the year shattered upper records, while the summer was one of the slowest we’ve seen in years.
2017 did show growth…
… in the price sector. The average selling price for all home types across Toronto was approximately $823,000. This is up almost 13% in comparison to the average selling price in 2016.
Toronto Real Estate Board President Tim Syrianos says that this higher average price is mostly driven by the tight market of January-March 2017. He goes on to say, “In the latter two-thirds of 2017, fewer sales combined with increased listings resulted in slower price growth.”
In the latter part of the year, the overall average selling price was up, but only by about 0.7% from the previous year.
Everything is segmented
Different home types proved to have their own unique markets in 2017, each with their own ups and downs.
The detached home market segment, usually the most expensive, experienced the slowest pace of growth. Buyers looking for less expensive options flocked to condominiums, as did investors and primary residents.
The result: Double-digit growth in the condo sector, with condo rental prices jumping with it.
What to look for in 2018
With the impact of the Fair Housing Plan starting to wane, we have a new piece of legislation that will affect prices: the OSFI stress test.
Effective January 1st, the banking regulator’s stress test tightens lending standards, protecting consumers and banks while making it more difficult for some to secure a loan.
Buyers with uninsured mortgages will have to prove they can afford payments at the Bank of Canada’s five-year benchmark rate, which is currently at 4.89%.
This lead to a flurry of activity leading up to the holiday season, and we may see the effects of fewer mortgage-eligible buyers throughout the winter.
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