Last year at this time we were in an “all out knock em dead” feeding frenzy here in the city of Toronto. It didn’t matter where you wanted to buy, whether it was in the central, west or east Toronto areas which I service or whether it was in Wasaga Beach, Pickering, Burlington, or Richmond Hill.
Everything was selling super fast and for crazy high prices. However, remember that 2017 was an anomaly of never before seen prices and sales volumes. So far this year, sales have been slow and the number of sales are down which comes as no surprise for anyone as consumers wait to see how the new mortgage rules play out.
February average home prices are up by 4.2% as compared to January. Prices of detached and semi-detached homes have softened while sales of condos and townhomes have been on fire!
The market in central Toronto has been quite brisk for houses priced under $1m and most properties along the subway lines are set up to receive multiple offers. There’s definitely shortage of carriage trade properties in Rosedale, Forest Hill and the Annex.
If a home ticked all the right boxes and was listed in January or February when there was little competition in terms of inventory, buyers honed in and in many cases paid over the asking price. (See below for examples of just two of my recent sales).
So whose going to benefit this year? Is it the year to buy? Sell? Can the market be timed?
It’s impossible to predict how the market will be later this year. We won’t see 20% year over year price increases but the market will be stable. Certainly the ever active spring market – which due to school breaks and Easter falling in March will start after April 1st – will bring more listings and those buyers who’ve been waiting should be satisfied.
Move-up buyers will be in good shape i.e. condo/townhouse owners looking to sell and move up to a house. Buyers who couldn’t get into the market last year can also take advantage of softer home prices. Interest rates are higher but are still historically very low.
Sellers, don’t despair. You’ll do very well if you don’t overprice or expect higher prices than 2017. Base your analysis on the increases from 2016 to 2018 and pretend 2017 didn’t happen. You’ll be pleased with the outcome. Condo sellers, you’ll do very well but remember buyers are discerning so be sure your home shines bright!
Sellers in the 905 markets and surrounding areas will continue to face challenges unless they become a bit more flexible in price as Buyers definitely have the upper hand right now.
It’s all a matter of perspective. Prices are higher than 2016 which was the best year to date at that time. 2017 was an aberration and prices were unsustainable. I think the government interventions (15% foreign buyers tax, new mortgage rules/stress test, interest rate increases) fulfilled their intent which was to curb the enthusiasm of early 2017 but I predict that we’ll see positive price growth
as we head into the busy spring market and second half of the year.
Regarding the undeterred development of every square inch of both Toronto and the 905 these days, consider these two facts:
1) Sometimes a drop in sales masks the fact that we still have a supply issue in the GTA which is incidentally expected to grow by 9.7m people by 2041.
2) Toronto has room to intensify. A Fraser Institute 2018 study showed that Toronto’s overall density – 4457 inhabitants/square kilometre is lower than Vancouver, which has 5493 and isn’t even 1/2 of that of NYC which has 10,935 people/square kilometre.