The Toronto Real Estate Board’s (TREB) monthly Market Watch report gives us valuable insights into the state of the housing market, including monthly and yearly price increase comparisons, sales numbers and average time spent on the market. Last month, we saw that the condo trend that drove the market at the end of last year was showing no signs of slowing down in January, and a similar trend has continued into February.
Prices are up for City of Toronto condos, increasing 10% this February to an average selling price of $570,275, from $515,424 in February 2017, according to the Toronto Real Estate Board (TREB). Detached and semi-detached Toronto homes for sale, conversely, are down 18.6 and 9% respectively. Condo townhouses also experienced double-digit growth in the 416 and are up 15.5%.
“As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year. Expect strong price growth to continue in the comparatively more affordable townhouse and condominium apartment segments,” says Jason Mercer, TREB’s director of market analysis.
Inventory on the rise
Increased inventory is on the market this February, with 465 more active listings. That’s led to declining year-over-year sales of 29.9%, in line with all other market segments. Similarly, condos are taking longer to sell, with an average of 22 days on market instead of the 17 days last February. Condo sales are far stronger, however, than all other property segments, with double the amount of condos sold than detached Toronto houses.
“When TREB released its outlook for 2018, the forecast anticipated a slow start to the year compared to the historically high sales count reported in the winter and early spring of 2017. Prospective home buyers are still coming to terms with the psychological impact of the Fair Housing Plan, and some have also had to reevaluate their plans due to the new OSFI-mandated mortgage stress test guidelines and generally higher borrowing costs,” says TREB President Tim Syrianos.
Torontonians borrowing from a federally-regulated lender now have to qualify at 2% over the contract rate, or the Bank of Canada rate, whichever is higher. The prime rate is currently 3.45%, meaning borrowers must have income to support monthly mortgage payments at at least 5.45%. These rules are likely to affect prospective condo buyers, who often first-time home buyers, the most.
But we’ll have to wait to see the long-term effects of the OSFI-regulations on the condo market, but price growth should continue as long as economic fundamentals remain in place. The Canadian and Toronto economy are strong, with GDP up 1.7% the last quarter of 2017 and the Toronto unemployment rate down 5.9%.
Check out the infographic below to get a better understanding of the insights provided above in Toronto and beyond:
This post was created in partnership with Zoocasa.com, a leading real estate resource that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse condos, townhouses and houses for sale in Toronto.