Mark Allen, REALTOR®

Toronto Real Estate 2017 - A year in Review and Looking Forward to 2018

08 January 2018
Mark

Toronto Real Estate Market Analysis for December + Year End 2017


Here is the latest infographic for December and Year-end 2017. Last year was a rollercoaster year in Toronto Real Estate with a January-Early April buyer frenzy and a Fair Housing Plan that calmed the buyers and cooled the market through the rest of the Spring and finally Summer when the market bottomed out. Come fall and the market started to rebound from the lull in activity and prices started to realize or normalize again. Overall the year ended with a gain of 12.7% in average sale price, which is higher than normal, in the industry we usually use around 6% as a “normal price appreciation” on a yearly basis.

Comparing December 2017 year over year.*

1. Sales volume was 7.6% lower in 2017 vs. 2016
2. Total active residential listings was up 172.4% which means more inventory to choose from for buyers
3. Total average price appreciation was .7% higher in December 2017, however, GTA Condos are up 14.4% higher In 2017.
4. As buyer’s take more time due to current market conditions we saw average days on market uptick in the GTA by 35% from 20 days to 27 days.

As we progress through the New Year we are seeing that December had a lot more active and new inventory in the GTA, which is great for buyers looking at freehold homes. Sellers might be hoping to capitalize on buyers looking to avoid the new mortgage stress test requirements (being qualified based on a rate 2% higher than actual rates) by listing in December instead of the spring market.

Buyers might be able to take more time in 2018, although not suggested, if you see the property you want, buy it. This is, however, a huge reprieve from the madness we saw in 2017. Buyers will be able to dictate conditions in offers and cover their backsides much easier this year. Detached, Semi-Detached homes grew so much in price over the last few years that a slowing in price appreciation might be seen in 2018, however, the desire and affordability for condos will continue and buyers will be competitive again causing another large uptick in prices.

The new G20 Mortgage rules have come into play and any OFSI regulated bank will now have buyer succumb to stress tests regardless of your down payment amounts. A good mortgage broker can assist buyers in finding ways around this, such as B Lenders or Credit Unions which are not subject to the OFSI regulations (be sure to discuss with your financial advisor before choosing alt-lenders).

To be noted this year we might see a few more rate hikes in the BoC overnight lending rates, which were increased in two increments last year by .5% or 50 basis points each increase.

The Canadian and Ontario economy are steaming forward and are showing no signs of cooling-off, a Risk On, Bullish economy, continued growth period is expected. December 2017 unemployment rates show an all time 40 year low in at 5.7% with 78,600 net jobs created in Canada, which was way above analysts expectations for December year end. In Ontario job growth for 2017 was up 2.5% overall. All of the indicators point towards a great 2018!!

Royal Lepage Canada forecasts that GTA price growth will be above normal at 6.8%. I am predicting a slightly higher number at 8% do to the above information and the heat in the Condo market, the only thing that could claw back the appreciation in average price would be rate hikes or Government meddling in the Real Estate market.

All the best in 2018 and Good Luck in your searches. As always reach out with any questions and let's get started on your selling, buying, investing journey in Toronto Real Estate – markallen@royallepage.ca

Cheers!

*Info from TREB and RLP Signature - http://www.trebhome.com/market_news/market_watch/2017/mw1712.pdf