There is a lot of discussion around the Toronto real estate market right now, with the February Market Watch report showing that the average Toronto MLS sale price for all home types combined is down 12.4% from February of last year.  In this blog post, we’re going to explain what this means exactly and what to expect from the market this spring.
I would urge buyers to look at all contributing factors before getting too excited about waiting for a “deal” on a property.  It is import to keep in mind that last February, March & April was the peak of the market before the correction that started in May after the government’s Fair Housing Plan announcement.  We experienced a fairly slow summer and fall, with the psychological impact of the announcement impacting sellers who oversupplied the market, and buyers who were waiting on the sidelines unsure of what to do. 
From what we have been seeing since the new year, sales activity has been strong.  Buyers have been out more seriously looking, properties are generally selling quickly and sellers have been happy with the prices they are getting.  So it makes sense that the average sale price is up 4% from January to February of this year.  And the number of sales is up almost 29% from January to February. 
The market was definitely more complicated last year than in the handful of previous years.  When we experience a rapid spike in prices followed by a rapid decline and then a more balanced rate of price increases, it can throw off average statistics and change their meaning.  The good news that I take out of the last whirlwind of a year is that we look to be in a more balanced market all around.  I’m sure everyone will be keeping a close eye on the rate of price increases through the rest of 2018.  
Concerns for this year’s market are expanded stress tests and mortgage rate increases.  We have seen that after each stress test expansion, buyers adjust their search to more comfortably affordable properties.  This is good for the long term stability of Toronto’s housing market, but has meant that a larger portion of Toronto buyers no longer have the option of buying a freehold house.  This was a major cause of the over 20% increase in the average condo sale price from early 2017 to early 2018.  There is competition for all home types, but with such a large group of buyers now looking at condos, the competition is particularly high.

“As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year. Expect stronger price growth to continue in the comparatively more affordable townhouse and condominium apartment segments. This being said, listings supply will likely remain below average in many neighbourhoods in the GTA, which, over the long-term, could further hamper affordability,” Jason Mercer, TREB’s Director of Market Analysis. 

We are excited for a busy spring ahead and expect a balanced rate of price increases.


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