The Toronto Real Estate Board (TREB) released its resale housing market data for 2017, announcing a drop in sales and an increase in average prices.
There were 92,394 sales in the Greater Toronto Area (GTA) reported through the MLS system. This is 18.3% lower than the record high set in 2016.
“Much of the sales volatility in 2017 was brought about by government policy decisions,” says TREB President, Tim Syrianos. “Research from TREB, the provincial government and Statistics Canada showed that foreign home buying was not a major driver of sales in the GTA. However, the Ontario Fair Housing Plan, which included a foreign buyer tax, had a marked psychological impact on the marketplace. Looking forward, government policy could continue to influence consumer behavior in 2018, as changes to federal mortgage lending guidelines come into effect.”
In the first quarter of 2017, there were record high sales in the GTA. Following the announcement of the Fair Housing Plan, the second and third quarter saw a dip in sales. The fourth quarter rebounded slightly, potentially due to buyers trying to secure their purchase before the new mortgage stress-test kicked in on January 1, 2018.
“It is interesting to note that home price growth in the second half of 2017 differed substantially depending on market segment,” says Jason Mercer, TREB’s Director of Market Analysis. “The detached market segment – the most expensive on average – experienced the slowest pace of growth as many buyers looked to less expensive options. Conversely, the condominium apartment segment experienced double-digit growth, as condos accounted for a growing share of transactions.”
There were 41,336 detached home sales last year, which is the highest of any housing type but 23% lower than 2016. The average price of a detached home increased 12.8% to $1,098,951.
There were 26,874 condo sales, making it the second most purchased housing type last year. While the total is 9.6% lower than 2016, this is the smallest decline in sales out of all the housing types. The average price of a condo unit increased 23.1% to $512,478, demonstrating the strongest price growth.
The overall average price for all housing types was $822,681 in 2017, which is 12.7% higher than 2016. The growth is strongly driven by the first four months of the year. Price growth slowed considerably after April.
“TREB will have much more to say about the year to come on January 30 when we will release our third annual Market Year in Review and Outlook Report,” explains Syrianos. “The report will feature an outlook for home sales and prices; new Ipsos consumer survey results covering buying intentions, including insights on new federal mortgage lending guidelines; new research on housing supply options surrounding the ‘missing middle,’ and important new reports on the movement of people and goods throughout the GTA.”
Clearly, it was a bumpy year for the resale market and government intervention had a lot to do with it. We’re eagerly awaiting the new home market report from the Building Industry and Land Development Association (BILD) to see if the new home market was affected the same way.