The holiday season is over and our real estate news recap is back to make sure you stay updated on the GTA housing market and its trends. Read on to learn what's new in Toronto's real estate market and what to expect from it in the beginning of 2018.
There were 92,394 sales through TREB's MLS system in 2017, down from 113,040 in the previous year, which represents a 18.3 per cent decline from the record sales in 2016.
However, the average price for all kinds of properties was $822,681 in 2017, up by 12.7 per cent from 2016. The detached market segment experienced the slowest growth and the condo market was the fastest growing in 2017, as the buyers were looking for the less expensive options.
The TREB president Tim Syrianos attributed the shaky sales in 2017 to government's intervention and said that the new mortgage policy is likely to continue influencing the market in 2018.
Huffington Post: Toronto Real Estate Board Blames Government For 18% Drop In Sales
This news is an elaboration on the previously mentioned statement from TREB's Tim Syrianos about the impact of the newly introduced government policies on the real estate market. Mainly, TREB emphasized, the new policies had a psychological effect on the market.
First of all, the 15 per cent tax for non-residents introduced in April, slowed down the market and cooled down the prices, especially in the detached segment. Secondly, due to the new mortgage guidelines that require banks to 'stress test' borrowers, the home buyers are expected to lose 21 per cent of their buying power, which might lead to even slower market. The Canadian Real Estate Association expects the home prices in Ontario to fall by 2.2 per cent in 2018.
There have been a lot of statements lately about Toronto following the same path as Vancouver after the introduction of foreign buyers' tax. However, it Toronto might not be able to recover as fast, some experts say. The reason is the new tightened mortgage rules.
In Vancouver, it took about five months for the sales to pick up again, while in Toronto the market continues to cool. However, Toronto market has seen signs of recovery over the past two months. In December the yearly decline in sales was the smallest since the introduction of foreign buyers' tax.
Finally, an optimistic look into 2018. BlogTO have picked out the most promising neighbourhoods to look out for this year. The first one is Chinatown East. This neighbourhood has seen an influx of new businesses recently and isn't going to stop there.
The next great Toronto neighbourhood to keep an eye on is The Stockyards. Fort York is also expected to thrive with its new condo developments starting to come to life with more and more inhabitants moving in. The subway's arrival will bring even more life to York University Heights. The East Bayfront is also on its way to greatness as it expects the arrival of Google.
Toronto Storeys: 4 Home Buying Trends To Watch In 2018
As the market shifts, the buyers and sellers should look out for a few trends, shaping the market in 2018. First of all, it well get tougher to become a borrower as new mortgage stress test rules took effect on January 1. Moreover, the Bank of Canada might hike the mortgage rates over the year too.
As we could notice in 2017, the condo market is on the rise and will continue to lead the real estate market into 2018, as affordability remains the main reason for choosing condo living. As the condos become the first choice not only for singles but also for families, the developers will focus more and more on family-friendly housing.
One more important trend to follow in 2018 is the shift of attention from foreign buyers to flippers, as the data show that foreigners account for only 4,9 per cent of buying activity in Toronto.