The count is in — 2018 has officially been one of the slowest in recent memory for real estate in the Greater Toronto Area. The December report from the Toronto Real Estate Board, which also recapped the year’s activity as a whole, revealed sales fell 16.1 per cent below what was recorded in 2017, with 77,426 changing hands.
Sellers Stayed Away From The 2018 Market
That effectively pulled down prices by 4.3 per cent to an average of $787,300. Home values were kept from sliding too far by a tight squeeze on supply. Fewer sellers opting to list led to a 12.7 per cent decline in new listings. This phenomenon that may have influenced overall buyer trends, such as boosting demand in secondary markets — like homes for sale in Mississauga — or lower-priced home types, such as condos for sale in Toronto.
“After spiking in 2017, new listings receded markedly in 2018. In many neighbourhoods, despite fewer sales from a historic perspective, some buyers still struggled to find a home meeting their needs,” stated Jason Mercer, Director of Market Analysis and Service Channels. “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 the strongest for less expensive home types, as many home buyers sought more affordable homeownership options.”
Price softening was less pronounced in the hottest inner-city neighbourhoods – though sales fell 24 per cent in the City of Toronto, prices rose 2.4 per cent to an average of $762,627. Sales and prices continued to fall within the 905 markets. The average price of a home in the 905 area dropped 7.1 per cent to $757,086, while sales declined 16.7 per cent.
December Seasonally Slow
The December sales picture was also quite frosty, though some of those declines are expected on a seasonal basis, Compared to November, 39 per cent fewer homes exchanged hands in the GTA, while prices rose 2.1 per cent to an average of $750,180. Almost all of what was available was quickly snapped up – with a sales-to-new-listings ratio of 87 per cent, the region became a steep sellers’ market, up from the balanced conditions seen last month.
While fewer listings have restricted buyers’ choice, the impact of the federal mortgage rules introduced last January can’t be ruled out. TREB President Garry Bhaura says that the tougher qualification rules continue to crimp affordability for mortgage borrowers, the effects of which have rippled throughout the market.
“Higher borrowing costs coupled with the new mortgage stress test certainly prompted some households to temporarily move to the sidelines to reassess their housing options,” he stated. “With this said, it is important to note that market conditions were improved in the second half of the year, both from a sales and pricing standpoint.”
Check out the infographic below to see how December home sales have trended in both the GTA and City of Toronto.