January 9, 2019 | Market Update
December saw a reported 3,781 home sales in the GTA. There were 4,308 new listings, and the average sale price was $750,180. Analysts (and home buyers and sellers) can achieve a great deal of insight into current market conditions by viewing these numbers in the context of overall activity for 2018.
Year-over-year changes
The 3,781 home sales last month declined from 4,876 transactions in December of last year. New listings were also down year-over-year, decreasing from 6,298 to 4,308. In contrast, average home prices rose slightly (by just over 2 per cent) in Toronto. There was no such price growth for other areas in the GTA.
Part of the reason for the price discrepancy between regions has to do with the relative affordability of different housing types. In the city of Toronto, condos (which outperformed detached homes in terms of price) accounted for a larger share of the market. Condo prices were definitely the bright spot for December, rising 11.4 per cent in Toronto. In other TREB areas, there was a more modest (but still significant) condo price uptick of 5.8 per cent.
2018 in review
A total of 77,426 sales were reported in the GTA for all of 2018. This number is down from 92,263 in 2017, reflecting a decline of 16.1 per cent. New listings for the year topped out at 155,823 (dropping by 12.7 per cent in comparison to the previous year). Lastly, annual average sale prices were down by 4.3 per cent in 2018.
The story of last year’s real estate market is more complex than the numbers might suggest. Notably, both sales and prices improved during the second half of the year. When assessing the GTA’s market as a whole, it’s important for home buyers and sellers to consider some of the major factors that impacted the figures for 2018—namely, the OFSI stress tests and increased borrowing costs.
Takeaways
It’s clear that stricter lending guidelines had a psychological impact on many buyers in 2018. These effects partially diminished in the latter half of the year, resulting in moderate price and sales growth. That said, news stories reporting these changes have continued to linger in the minds of many buyers.
One of the most discussed real estate topics this year was the “missing middle.” Put simply, current housing options in some neighbourhoods aren’t meeting the needs of buyers. Affordability is part of the issue, which explains why there’s been such high demand for less-expensive home types (like condos).
The housing action plan announced by the Ontario government in November was one of the year’s major positive developments. With 2019 now in full swing, industry analysts are looking ahead to see what changes this new plan will bring.
Looking to achieve a better understanding of the market? We interpret the data as it becomes available to determine how it will impact buyers and sellers. Get in touch to learn how our up-to-the-minute knowledge can help you meet your real estate goals.