Last Wednesday, The Toronto Real Estate Board released its market figures for the month of March, and the findings are not looking too hot for Toronto’s housing market. The report, which displays home sales and prices across the Greater Toronto Area (GTA), shows a steep decline with residential sales dropping nearly 40 per cent, while the average price illustrated a decline of 14 per cent when compared the same time last year.
The market is continuing to show signs of slowing after new cooling measures were implemented earlier in the year by regulators at the federal and provincial levels. According to the report, new sales listings totalled 14,866 – a 12.4 per cent drop from March 2017. There were reported 7,228 residential transactions in the GTA, a sharp decrease from the record setting 11,952 home sales listed in March of last year. The average price for all housing types sold across the GTA also fell 14 per cent to $784,588, compared with $915,26 in March of last year – the biggest drop since 1991.
The plummet in average selling prices was partly due to transactions for detached homes, which saw the biggest drop of all housing types. Sales of detached homes decreased 46 per cent, while the average price fell 17 per cent to $1.01 million, compared to the same time last year. Semi-detached homes, townhouses and even the previously red-hot condo sector all saw declines as well- plunging 30.6 per cent, 34.2 per cent, and 32.7 per cent respectively. Jason Mercer, TREB’s Director of Market analysis reiterates in the report to not compare this year’s results with last years, as 2017 should be considered an outlier year.
“Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months,” states Mercer.
While new listings of homes for sale fell year-over-year, they actually increased 41% when compared to the month prior. Benchmark prices also rose 1.2 per cent in March of this year compared to February, including 1.1 per cent gain for detached homes, and 1.8 per cent rise in condos. According to Mercer, the second half of the year should see the annual rate of price growth improve as sales rise relative to the below-average level of listings.
With provincial and municipal elections creeping up, TREB urges housing and housing affordability must be debated by each political party, stating it is a pressing issue. “A well-functioning housing market is not only important to ensure that people have a place to live; it is also important because it supports hundreds of thousands of jobs, billions of dollars in spin-off expenditures and billions of dollars in government revenues.” TREB President Tim Syrianos also wants to see a constructive, yet vigorous debate between all candidates in regards to the level of housing supply, housing policies, and housing taxes.