While the housing market may appear to be stabilizing itself, when compared to the whirlwind number of sales and steep pricing last year, the latest Market Figures report released by the Toronto Real Estate Board (TREB) shows April home sales are at its lowest level in 15 years.
Typically, April tends to be a big month for the real estate market as sales slow over the Winter months and increase during Spring and Summer. Last year April saw skyrocketing activity in the market. Yet, according to the report released last Thursday, the number of transactions recorded throughout the Greater Toronto Area (GTA) this April was 7,792 – a 32.1% decline from the 11,468 sales recorded in 2017. The last time the GTA sold less than 8,000 homes in the month of April was in 2003.
The decline in both sales and prices can be related to a package of measures introduced by the province to cool the market as well as a decrease of home sales. The number of properties sold dropped 38.4% despite a decrease in home prices, which were down by 12.4% selling at an average of $804,584. This was also reflected on detached homes, which were down 14.4% selling at an average of $1,030,103. Luxury home sales in the $2 million (and over) range only accounted for 5.5% of home sales this year compared to 10% in 2017.
Year-over-year declines in April’s average sale price had not occurred since the recession. When compared month-over-month, prices declined by 0.2% and sales were down 1.6% – remaining in line when comparing February to March. In contrast, the condo segment saw a slight price increase of 3.2% to an average of $559,343. While these remain relatively affordable when compared to other housing types, the number of sales also declined by 26%. Overall, the average cost for all home types this year-to-date was down to $779,400 for the month of April compared to $886,923 for the same time last year.
TREB’s Director of Market Analysis, Jason Mercer, continues to reiterate how the second half of the year will be better, with condos and higher density low-rise home types at the forefront of sales. “Once we are past the current policy-based volatility, home owners should expect to see the resumption of a moderate and sustained pace of price growth in line with a strong local economy and steady population growth.” Mercer state
With an upcoming election quickly approaching, TREB has unremittingly urged all parties to engage in a vigorous housing policy debate. Tim Syrianos, TREB’s President stated: “We believe the next step should be tax relief, especially for land transfer taxes, both provincial and the Toronto land transfer tax, and efforts to facilitate an increase in the supply of missing middle housing that fills the gap between single family homes and high rises… Furthermore, we believe that any attempt to increase the Toronto land transfer tax should require approval from the provincial government, given the significance of Toronto’s economy to the province and the connections between the Toronto real estate market and that of the broader GTA.”