By: Tim Syrianos
When TREB released its outlook for 2018, we anticipated a slower start to the year compared to the historically high sales that kicked off 2017 and were reported in early spring of that year.
The numbers for February’s GTA resale housing market are now in, and, in line with our projections for lower annual sales, GTA REALTORS® reported 5,175 transactions through TREB’s MLS® System, a 34.9 percent year-over-year decrease from a record 7,955.
You may be asking, why the decrease in transactions? Some reasons could be that prospective home buyers are still coming to terms with the psychological impact of the Fair Housing Plan, and some have also had to reevaluate their plans due to the new OFSI-mandated mortgage stress test guidelines and generally higher borrowing costs.
On the pricing front, The MLS® Home Price Index Composite Benchmark was up by 3.2 percent on a year-over-year basis for the TREB market area as a whole. Meanwhile, the overall average selling price for all home types in February was down 12.4% year-over-year to $767,818.
In terms of home types, the largest annual rate of price growth was experienced in the condominium market segment with a 10.1 percent year-over-year increase, while single-family detached and attached GTA-wide average prices were down compared to February 2017.
New listings also climbed slightly in February to 10,520, a 7.3 percent increase from the same time last year. However, despite the increase in the number of properties on the market, the level of new listings still remained below the 10-year average for the month of February.
When putting aside the price spike recorded in the first quarter of 2017, it is important to note that February’s average price remained 12 percent higher than the average reported for February 2016, which represents an annualized increase well above the rate of inflation for the past two years.
As we move into the months ahead, growth in sales and selling prices is expected to pick up relative to last year. In particular, expect stronger price growth in the comparatively more affordable townhouse and condominium apartment segments.
Watch the video below to hear TREB’s Director of Market Analysis and Service Channels, Jason Mercer, discuss February’s Market Watch report.