As we are moving towards the end of 2017, the time has come to reflect on the past and the future of Toronto's real estate market. Some say the current downtrend will continue into 2018, some are saying that the slowdown is temporary and the market will soon pick up. This week, we've gathered the most interesting reads about Toronto's housing market in this short roundup to help you stay on top of the real estate game towards the beginning of 2018.
Torontoism.com: Toronto November 2017 Market Report: The sky has not fallen even though the prices have
The real estate stats for November were released and last week Torontoism team reflected on the past and the future of Toronto's real estate market. The market was generally slower year-over-year but the new mortgage rules taking effect in January 2018 are pushing the wannabe homeowners to act fast. Therefore, the sales dropped only 13.3 percent year-over-year in November, compared to the drop of over 20 percent in the previous months.
There was a surge of new listings in November too, and the properties spent 24 days on the market on average, giving the buyers some time to choose the home they really like and negotiate the deal. Richard Silver commented on the recent stats saying that although the prices are lower, the sky has not fallen in the past few month. The sellers still have the upper hand in prime property, but the buyers have some room for negotiation now.
The real estate prices will remain flat in 2018, Re/Max experts predict. They expect the beginning of the year (that is usually slow anyway) to be even slower in the upcoming year with a gradual rebound coming in May. The Re/Max forecast is different from their competitor's Royal LePage, which predicts a moderate 6.8 per cent price rise in Toronto area.
The factors that will effect demand in the first months of 2018 will be the Ontario Fair Housing Plan and the newly introduced tougher mortgage stress test rules, says the Re/Max's forecast. Both policies will make the buyers cautious to get into the housing market, as they will prefer to wait till spring. Despite the slower market, Re/Max still predicts higher demand and price increases in the condo market, because of the relative affordability of this segment.
The former chief planner for the City of Toronto Jennifer Keesmaat says it's time to rethink Canada's housing system. The economy is a dynamic matter and the cities that don't change and fail to adjust to the changing economy, dry out. The governments should keep that in mind when they plan the future of Canadian cities, says Keesmaat.
Housing is the fundamental human right and a key to the sustainable national economy. Therefore, affordable housing should be a priority for the overheated Canadian real estate markets. The newest National Housing Strategy doesn't solve the problem, according to Keesmaat, as it merely "subsidizes the broken system".
The former city planner argues that the only good solution proposed so far is the new Vancouver's supply-driven strategy that emphasizes, first of all, the right kind of supply. She also hopes that more cities will follow Vancouver's positive example.
The Globe and Mail: More Toronto condo developers cater to families, but price still a barrier
Builders incorporate family-friendly ideas, but price is still the major issue. The new 3,000 units Emerald City high-rise community planned in Toronto's North York is mostly marketed to families. The bachelor apartments were eliminated in the plans in favour of larger two- and three-bedroom condos. The reason, according to the developers, is that more and more families are choosing living in condos, either because of their cost or the work-life balance that they offer.
The "Growing Up" design guidelines introduced recently by Toronto's city planners, are meant to push builders to construct projects better suited to families with children. This means, first of all, larger units, and kid-friendly environment: playgrounds, schools and kindergartens. However, even though more condos are being designed for family-living, the price constitutes a barrier that keeps families from buying condo units.
BuzzBuzzHome: This is what to expect for Toronto home prices in 2018
The 2017 was a year of great turbulence in the real estate market in the GTA and the main question is if this trend will continue into 2018. According to Derek Holt, head of capital markets economics at Scotiabank, the prices will pick up again in 2018, following Vancouver scenario after the introduction of the foreign buyers tax. The same forecast was also suggested by TREB president Tim Syrianos.
According to another expert, CIBC Senior Economist Benjamin Tal, the housing will become even more unaffordable for most Canadians because of the lack of supply. He argues that the recently introduced policies can only provide a temporary relief in an overheated market, but the fundamentals like increasing demand and limited supply stay unchanged. Therefore, he predicts, the long-term trend in the GTA's real estate market will move towards even less affordable housing.