Toronto area home sales declined to 10-year low in 2018 and number of listings down.
Home sales in Toronto and the surrounding GTA area fell to a 10-year low in 2018, as the number of new listings coming to the market declined and home buyers and sellers faced with a new reality of higher interest rates and stricter mortgage rules including mortgage stress tests.
The Toronto Real Estate Board (TREB) says there were 77,426 residential transactions recorded through its Multiple Listing Service (MLS) system in 2018, down 16.1 per cent from 92,263 sales in 2017.
The last time sales were lower than this level was in 2008.
TREB represents more than 52,000 real estate agents in the GTA region, and the TREB President said that the total number of new listings was also lower, pulling back 12.7 per cent to 155,823 in 2018.
The average sale price of all properties — detached, semi-detached, townhouse and condominiums — fell by 4.3 per cent to $787,300.
TREB says home prices were up slightly in Toronto but lower in the suburbs as the price of condos — which make up a large segment of the urban market — climbed 7.8 per cent year over year.
“After spiking in 2017, new listings declined markedly in 2018. In many neighbourhoods, despite fewer sales from a historic perspective, some buyers still struggled to find a home meeting their needs,” said Jason Mercer, TREB’s Director of Market Analysis.
“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 homebuyers sought more affordable home ownership options.”
The board says there was also marked improvement in sales and prices in the second half of the year.
“What happened in 2018 was a combination of many things, such as a lot of different policies that came into effect at the same time which put a lot of buyers and sellers on the side lines for quite some time. Every indication we have here is that things will be better in 2019”, said Mr. Syrianos,
Mr. Syrianos, who has worked in real estate for three decades, said the pace of price growth and sales seen in 2017 was unsustainable, and what will likely result this year in 2019 is a more balanced market, with supply continuing to be a challenge.
“I see it being a more steady marketplace, with more consumers looking at their options and accepting the new normal of the new lending rules and trying to figure out a way to enter the marketplace,” Mr. Syrianos said.
Realtor Mr. Pasalis said the mortgage stress test, which came into effect Jan. 1, 2018, helped get rid of the “froth” in the market, which had largely been supported by speculators.
“It brought us back to a sort of a more balanced level, a level where demand is closer to true end-user demand rather than a market driven by investors which was where we were for the past three years till 2018,” said Mr. Pasalis.
TREB says in December, 2018, the number of sales fell 22.5 per cent to 3,781, down from 4,876 in the same month a year earlier.
The average sale price in December rose slightly by 2.1 per cent to $750,180 from $734,847 when compared to December 2017.
In Toronto, the average price for a detached home last month was down eight per cent in year 2018 over year 2017 to $1.14 million, and down 2.2 per cent to $891,095 in the surrounding GTA areas.
Other property types — semi-detached, townhouse and condo apartments — all saw price increases ranging from 3.2 to 9.9 per cent in December, 2018 in both Toronto and the GTA.
Source: Yahoo Finance
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