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GTA home prices continue to rise

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GTA home prices continue to rise

Toronto homes web

Greater Toronto Area average home prices continued their upward trajectory in November, rising 3.5 per cent year-over-year to $788,345, according to the Toronto Real Estate Board (TREB).

GTA realtors report 6,251 residential transactions through TREB’s MLS system in November 2018, down by 14.7 per cent compared to November 2017, when there was a temporary upward shift in demand caused by the looming OSFI-mandated stress test at the end of last year.

“New listings were actually down more than sales on a year-over-year basis in November,” President Garry Bhaura says. “This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth.”

On a preliminary seasonally adjusted basis, sales were down by 3.4 per cent compared to October 2018.  The average selling price after preliminary seasonal adjustment was down by 0.8 per cent, compared to October 2018.

Average home prices, November

Toronto (416)
2018: $842,483
2017: $803,540

Rest of GTA (905)
2018: $750,721
2017: $732,848

GTA
2018: $788, 345
2017: $761,410

“Home types with lower average price points have been associated with stronger rates of price growth over the past few months,” says Jason Mercer, TREB’s director of market analysis. “Given the impact of the OSFI-mandated mortgage stress test and higher borrowing costs on affordability, it makes sense that the condo apartment and semi-detached market segments experienced relatively stronger rates of price growth in November, as market conditions in these segments remained tight or tightened respectively over the past year.”

Looking at the housing market from a policy perspective, TREB says it is encouraged with the provincial government’s recent announcement and on-going public consultation regarding a housing supply action plan.

“Housing supply remains a key issue in the GTA market,” says TREB CEO John Di Michele. “More specifically, an adequate supply and appropriate mix of housing types must be part of the conversation, as has been recognized by the provincial government in their consultation documents. Transit supportive and gentle density ‘missing middle’ housing should be a priority.”

 

GTA average prices and percentage gain by home type, November 2018

Detached: $1.01M, 1.3%
Semi-detached: $791,760, 8.3%
Townhome: $647,418, 3.1%
Condo: $556,723, 7.5%

TREB has commissioned research on these subjects and is holding a Market Outlook Economic Summit on Feb. 6, 2019.

“TREB is also encouraged that the provincial government remains committed to public transit expansion,” adds Di Michele. “TREB has long advocated for improvements to the Greater Golden Horseshoe transit and transportation network, and feels the time is right to have a conversation about the level of provincial and municipal responsibility that would be the most efficient arrangement to realize subway expansion sooner in Toronto, and the GTA, as this will impact the housing market.”

 

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Canada Outlook NEW

Canadian housing market to moderate in 2019 but growth to continue in Ontario and Toronto

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Canadian housing market to moderate in 2019 but growth to continue in Ontario and Toronto

Canada Outlook NEW

 

By Wayne Karl

Canada’s housing market should see a moderation in both housing starts and sales, while home prices are expected to reach levels that are more in line with economic fundamentals such as income, job and population growth. This forecast for 2019 and 2020 is drawn from the 2018 Housing Market Outlook from the Canada Mortgage and Housing Corp. (CMHC).

Source: CMHC Housing Market Outlook
Source: CMHC Housing Market Outlook

Nationally, CMHC’s outlook for 2019 projects total housing starts to edge down and range between 193,700 to 204,500, with the downward trend expected for both single and multi-unit starts. MLS sales are expected to be between 478,400 and 497,400 units annually while MLS prices should lie between $501,400 and $521,600.

“Our key takeaway from this year’s outlook is moderation in Canada’s housing markets for 2019 into 2020,” says Bob Dugan, chief economist, CMHC. “Housing starts are expected to decline from the higher levels we’ve seen recently. We expect resales in 2019 and 2020 to remain below recent peaks while prices should reach levels that are more in line with economic fundamentals such as income, job and populations growth.”

Ontario recovery

After dampened market activity in 2018, existing home sales and housing starts in Ontario, particularly in single-family homes, will post a partial recovery in 2019. Buyers are expected to re-enter the market on the strength of stronger than expected job growth and in-migration, before the downward trend in starts and sales resumes in 2020.

Source: CMHC Housing Market Outlook
Source: CMHC Housing Market Outlook

GTA growth

With balanced conditions prevailing in the GTA, CMHC expects moderate sales growth and home prices growing in line with inflation. The rising costs of homeownership will result in strong rental demand, while new supply will add some upward pressure on vacancy rates. Toronto buyers should see more housing choices as builders concentrate their efforts on new highrise projects.

OTHER REGIONAL HIGHLIGHTS

BRITISH COLUMBIA
Housing starts activity and MLS sales in BC should moderate, as economic and population growth slows while MLS average prices are expected to see a flatter growth profile through 2020.

Vancouver
Over the next two years, Metro Vancouver’s resale market will see lower sales, higher inventories of homes for sale and lower home prices compared with recent market highs. Through 2018, demand and home prices softened across all market segments and local geographies.

PRAIRIES
Buyers’ market conditions in Alberta and Saskatchewan should gradually shift to a balanced market with gradual improvement in economic and demographic fundamentals. Balanced market conditions in Manitoba are expected to continue.

Calgary
Various factors will push and pull the demand for housing in Calgary in 2019 and 2020. Calgary’s economy will experience stronger growth in population and employment. This will help support demand and lift sales in 2019 and 2020. However, the average MLS price will continue to face downward pressure but is expected to stabilize in 2019 and modestly rise in 2020.

QUEBEC
Housing starts and sales of existing homes will both be sustained, however, slower economic growth and rising borrowing costs will moderate activity through 2020. Starts will continue to be dominated by the apartment market segment, while demand for resale single-detached homes will remain relatively strong.

Montreal
In 2018 and 2019, rental housing demand will increase slightly faster than supply in Montreal, which will put some downward pressure on the vacancy rate. Demand will be supported by rising net migration over the forecast horizon.

ATLANTIC CANADA
The Atlantic region will see sustained activity, notably in Nova Scotia, where existing home sales and average prices should trend higher while rental demand will drive growth in apartment construction.

RELATED READING

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

 

 

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