Mark Allen, REALTOR®

Toronto Real Estate Market Update - January 2018

07 February 2018
Mark

Toronto Real Estate Market Analysis for the first month of 2018!

Is the sky falling? The media loves to portray doom and gloom. So, let's translate the details into plain language and make sense of it from an overall high level view.

January 2018, when compared with January 2017, shows total average prices are down only -4.1% overall, and down -10.4% year to date(December 2017 - January 2018) mainly due to a decline in detached housing. In January 2017, as we all remember we saw a +22.3%* spike in year over year average price, which is completely abnormal for a one month change. As the year progressed in 2017 we continued to see unhealthy spikes in average price appreciation, due in part to previously discussed sentiments in past market updates(FOMO, Upcoming Regulations, Foreign monies). Keep this in mind when reading articles until around May 2018, because in May 2017 we started to see some effects of the FHP(Fair Housing Plan) take place, thus we should be able to make sense of price movements a lot easier come May 2018.

If we look to January 2016 average price($630,193)** and compare it to this January 2018 average price($736,783), we can see that we have a more balanced and healthy market again. In fact, we are up +16.9% when compared year over year. I think we need to take a look back two years+ to examine the full picture at this juncture. Add to the fact inventory levels are much higher than 2017, we currently sit at 3 months of inventory(more choice) - which is still a seller's market, if we reach over the 5-month mark, we can then call it a buyer's market. 

Sales are down -22% year over year, again we have an influx of inventory currently sitting around 2.95 months compared to one of the lowest inventory levels on record in January 2017 at around 1.03 months. The new OFSI mandated stress tests and wait and see sentiment may have flooded back into our marketplace. This sentiment is amplified by NAFTA woes, inflationary concerns(more-so for BoC) and potential interest rate hikes.

However, we choose to look at the information, I would recommend we extrapolate and interpret all of the above as a return to normalcy. The Toronto Real Estate Market on a year to date basis should now see a more stable uptick in average price. Sales may stay flat or maintain a downward trend, however, buyers and sellers who have been advised appropriately by their agents will be meeting at the deal tables for smoother transactions.


*Housing type numbers - Year over Year percent changes for the 416 locale only:
Detached Housing: -3.9%
Semi-detached: +3.7%
Townhouse: +8.2%
Condo Apartments: +15.1%

The hot trend of Condos remains intact as Condos continue their bullish upward trend into 2018. Sellers in certain locations with desirable condo types(1+1's and 2beds, depends on area) continue to benefit from this hot market.  

For a more detailed approach and an analysis of the market in your neighbourhood for your specific housing type, please feel free to reach out with any questions. Email - markallen@royallepage.ca.

*Stats from TREB, 2018 - http://www.trebhome.com/market_news/market_watch/2018/mw1801.pdf

**Stats from TREB, 2017 with 2016 info. - http://www.trebhome.com/market_news/market_watch/2017/mw1701.pdf

Royal LePage Signature Realty​

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