Insights from Your Trusted Toronto Real Estate Professionals
For the last few years, the housing market in Toronto and the GTA has gone through its fair share of ups and downs. If you are flipping through the newspapers or television channels, you may find every expert analyst making predictions about Toronto’s real estate. Some say that the only thing colder than Toronto’s weather these days is its housing market!
Despite the slump and slightly damp market sentiments, the Toronto Real Estate Board’s (TREB) recent report states that the average real estate cost in January 2019 is $748,328, a 1.7% Year-On-Year (YOY) increase. The report further indicates that in contrast to the volatilities seen in 2018, the sales and average sales price will grow at a moderate pace through 2019. Let’s take a look at the market movements in the recent past, along with trends in the near future.
Highlights of the Toronto and GTA Housing Market Movements in the Past
There were a number of factors that led to the volatile changes in the housing market in the last few years.
- 2016 saw the average housing price rise by 17.3% YOY, whereas in 2017, the YOY increase was 12.7%.
- Between 2017 and 2018, the number of units sold (including condos, detached and semi-detached) dropped by 16%. The average residential sale price dropped by 4%.
- In 2018, Bank of Canada increased the key interest rates three times. Rates went up to 1.25%, then 1.5% and eventually to 1.75%.
- As per the new rules that came into effect on January 1, 2018, the federal mortgage stress test was made applicable to all home loan applicants, even in cases where the down payment was 20% or more.
- Although tighter mortgage qualifiers and higher interest rates reduced the buyer’s purchasing power, new immigrants, first-time buyers and foreign investors continued to fuel the demand for homes in Toronto and the GTA.
What Can You Expect in 2019…and the Next Few Years?
While there have been some hiccups in the real estate market, the slump seems momentary. Hopeful buyers are counting on a market crash due to the various economic issues, trade wars and corporate departures, but the trade pundits think otherwise.
- Housing prices in Toronto and the GTA are all set to keep rising throughout 2019, with a 1.3% increase in the average sale price by the end of 2019.
- Scarcity of land and the high cost of borrowing is leading to a supply issue of low-rise housing. Developers are also more focused on high-density, high-rise housing.
- As prices stabilize and markets normalize, home buyers will have to tweak their expectations about the rate and speed of appreciation. Locking down a piece of real estate in Toronto will not necessarily mean quick or vast appreciation of wealth.
- The average selling price in the GTA will touch $820,000, with the condominium apartment market being the key contributor to the price hike.
- Approximately 155,000 new listings are likely to hit the market through 2019.
- With vacancies being low, the rental market will continue to remain tight.
- While there will be a healthy inventory of condominium apartments and townhomes, the supply of semi-detached homes and detached homes over $1 million may be inadequate. Single family homes priced under $1 million will continue to contribute to the Toronto real estate, on both price and availability.
The Future of Toronto’s Housing Market Looks Bright
Whether you are in the market for your first home, an upgrade, a downsizing, or sale of your home, consider having an experienced real estate brokerage by your side. At Home & Condo Market Brokerage, our qualified and knowledgeable agents stay abreast of the Toronto and GTA real estate market, tracking inventory, prices, as well as duration of properties for sale on the market. They have a pulse of the market sentiment and price competitiveness, which can help you win or create bidding wars and make the most of your real estate investment.
If you are looking to buy or sell a home in Toronto or the Greater Toronto Area, schedule a consult with one of our agents today. Call us at 416-551-5020 or book an appointment by using our online form.