Toronto February Market Report: Waiting For a Thaw

Toronto February Market Report: Waiting For a Thaw

Realtors across GTA reported 5,025 homes sold through TREB’s MLS® System in February 2019, which makes 2.4 per cent less than in February 2018.

Detached homes were down by 9.6 per cent in 416 area but up 4.2 per cent in 905. Semi-detached homes showed high numbers in 416 with a 20 per cent rise. 905 was down by 6.9 per cent. Townhouses were down by 6 per cent across all segments. Condominium segment was down 5.7 per cent in sales.

Average price for a home this February was $780,397, showing only 1.6 per cent rise in a year-over-year comparison. Both detached homes and townhouses went down with average prices for their segment by 2.1 and 0.5 per cent respectively. Semi-detached homes were sold for 9.9 per cent more than last year. Codos went up by 6.1 per cent.

Funilly enough, average days on the market were actually the same as last year. Both years it was exactly 25 days. New listings went down again by 6.2 per cent and active listings by 0.6 per cent.

After the balanced January, it seems that the icy weather in Toronto froze most buyers and sellers from entering the market. Although it might be smart waiting for finer weather while viewing a home, with temperatures prices might climb as well. Sun might thaw not only the frozen buyers but also the considerably stable average price climb we have currently. Hopefully, it will wake up the sellers as well, and inventory will grow as well.

Jim Burtnick, Broker, SVP-Sales

It is not entirely surprising that sales in February 2019 are down 2.4% compared to February 2018 (that is only a difference of 124 sales in the entire GTA), given that active listing between the 2 Februarys was down by more - 6.5%. Less supply outweighed the less demand by more than double! (I suspect that the cold, snowy and hard February we just experienced played into this relatively modest drop in overall activity).

Thus, it is also not surprising to see that average selling prices not only held their ground but modestly increased too. We are continuing to see the highest appreciation in the condo market as this is the most affordable category of real estate and therefore there is more demand overall.
I think the next few months (spring is the most active season for real estate) will give us a better idea of how the entire year will unfold.

My prognosis remains the same - moderate and steady we will go, not too hot - not too cold (save and except the rental market which will continue to stay HOT-HOT-HOT as the vacancy rate stays in the sub 1% range - way too low!)

Geoff Joyner, Sales Representative

Sales volume in February was off 2.4% with 5025 transactions versus year ago. The numbers were off slightly more in the 416 area code versus 905. At the same time new listings declined by 2% overall, flat in the 416 but off 8% in the 905 area. This indicates that both areas are seeing a tightening of available homes, resulting in firming of price support for all housing segments.ň

The 416 sales volume continued to be driven by the condo apartment segment which contributed 57% of the total sales volume. The condo segment also saw a 7.4% increase in average prices, year over year rising to $612,488.

Condo sales will continue to be driven by first time buyers and investors. Investors are seeing very tight vacancy rates (less than 1%) and the resulting upward pressure on rents. While rents are strong, a segment of investors are now contemplating the sale of units in order to realize capital gains generated over the past several years. While this will create more inventory for potential first time buyers, it will also further tighten the available inventory of rental units, which will apply additional pressure on rents. The continued strength of the first time buyer housing segment and the resulting price increases will also support the buy up home segments (semi-detached, townhouse and detached) as sellers realize gains and apply those gains to the purchase of their next home. We need a literal thaw in the weather and then we expect to see a jump in both new listings and excited buyers!

Celia Alves, Sales Representative

Recent Bank of Canada commentary indicates that interest rates are holding steady and are less likely to be increased in 2019. This is great news for first time buyers thinking of entering the market this spring. With the upcoming fall election this would be an opportunity to review the stress test with a view to reducing the 2% add-on and or increasing the amortization to 30 years for CMHC insured mortgages.

Employment in the GTA continues to be strong with the addition of high paying positions encouraging migration and the purchase of property.

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