Toronto Homes Sales Down Compared to January But This can be a Good Thing if you are Buying and Selling!
Thursday Mar 07th, 2019
The Toronto Real Estate Board announced that Greater Toronto Area REALTORS® reported 5,025 homes sold through TREB’s MLS® System in February 2019. This sales total was down by 2.4 per cent on a year-over year basis. Sales were also down compared to January 2019 following preliminary seasonal adjustment. The mortgage stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy. The stress test should be reviewed and consideration should be given to bringing back 30 year amortizations for federally insured mortgages. There is a federal budget and election on the horizon. It will be interesting to see what policy measures are announced to help with home ownership affordability. Despite sales being down year-over-year, new listings actually declined by a greater annual rate. This suggests that market conditions became tighter compared to last year. Tighter market conditions continued to support year-over-year average price growth. The average selling price for all home types combined was up by 1.6 per cent over the same period. Price growth was driven by the condominium apartment segment and higher density low-rise home types. On a preliminary seasonally adjusted basis the average selling price was down compared to January 2019.
The rental market continued to operate in a high demand, low inventory environment during the first two months of 2019. Strong competition between renters resulted in average rents for one bedroom and two-bedroom apartments leased through increasing well above the rate of inflation on a year-over-year basis for the January-February period. The average one-bedroom rent was up by 8.1 per cent to $2,145. The average two-bedroom rent was up by 7.4 per cent to $2,810. With vacancy rates hovering in the one per cent range and average rents increasing in the high single digits, it is clear that signing a lease for a rental unit is not an easy proposition in the GTA. While some rent control provisions have been relaxed by the new provincial government, policy makers need to look at further initiatives to encourage rather than discourage investment in rental apartments. A recent Ipsos survey conducted for the Toronto Real Estate Board found that almost one-quarter of investment property owners are very likely to list their property for sale this year, which is concerning in an already tight rental market.
In summary the Toronto market is still a healthy strong sellers market. Even though sales are down, average prices are still up and forecasted to modestly increase on a year over year basis. The last few years we were experiencing unsustainable average price increases and now the market is starting to flatten off and becoming a more balanced market. A balanced market is a good market for both buyers and sellers. With current average prices you are still getting a good price for your property and on average you are now able to negotiate a reasonable purchase of a new property. Let’s face it buying a property and competing with 20 other offers does not make for a very pleasant buying experience. Now you can have a much more pleasant buying experience and still get a good price if you are selling your property.
For questions on the Toronto Real Estate Market or if you are planning a move now or in the near future, feel welcome to call me at 416-901-8777 or email me at firstname.lastname@example.org to discuss your real estate goals.