The Toronto Real Estate Board (TREB) released its monthly resale housing report for March 2018, announcing another dip in sales and new listings compared to the record high activity in 2017.
There were 7,228 sales reported through the MLS last month, which is a 39.5% drop compared to the 11,954 sales in March 2017. March’s total sales were also 17.6% below the 10-year average for the month. The number of new listings fell 12.4% year-over-year to 14,866, which is 3% lower than the 10-year average.
“TREB stated in its recent Market Outlook report that Q1 sales would be down from the record pace set in Q1 2017,” says TREB President Tim Syrianos. “The effects of the Fair Housing Plan, the new OSFI-mandated stress test and generally higher borrowing costs have prompted some buyers to put their purchasing decision on hold. Home sales are expected to be up relative to 2017 in the second half of this year.”
The average selling price fell 14.3% year-over-year to $784,558. “Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months,” says Jason Mercer, TREB’s Director of Market Analysis.
“It makes sense that we haven’t seen prices climb back to last year’s peak,” he adds. “However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings.”
The largest drop in average selling price was in the detached home market, which came in at $1,005,779, a 17.1% year-over-year decline. This significant price drop was largely impacted by the fact that the number of $2 million-plus detached home sales was half of what it was in March 2017.
The average selling price for semis and townhomes also dropped by 8.8% and 9.5%, respectively. The only housing type with an increase in average selling price was condos, which jumped 6.1% to $551,003.
“A well-functioning housing market is not only important to ensure that people have a place to live; it is also important because it supports hundreds of thousands of jobs, billions of dollars in spin-off expenditures and billions of dollars in government revenues,” says Syrianos.
“Issues such as the below-average level of housing supply and often inadvisable policy ideas and negative measures such as land transfer taxes, vacancy taxes, speculation taxes and second home taxes should also be thoroughly debated by all candidates,” he adds.
Overall, sales are down compared to last year as expected, inventory remains low, and the demand seems strong. TREB also recently called on the major provincial parties to host a housing policy debate leading up to the election in June, so while the second half of 2018 is expected to pick up, the provincial results could mix things up a bit.