If it wasn’t for a shortage of listings, we’d be in big trouble in the latter part of 2018. The first several months saw a big drop in sales because of the new mortgage qualification rules but this was combined with a flood of listings hitting the market. As we neared the end of the year, the trend was reversed with a reduced listing inventory combined with slower sales.
For the first time since 2008, the year-over-year appreciation level was a negative number… -4.3%. Keep in mind that we’ve only had TWO years with negative appreciation in the last TWENTY years and the other one was in 2008 when the mortgage/financial meltdown in the US-dominated economic news.
The total volume of sales in 2018 was at a 10-year low with 77,426 houses and condominiums being sold. This was down 16.1% from 2017 and the lowest total annual sales number since 2008. Condominium sales took 37% of the market… the highest percentage ever and up from 30% back in 2000.
There’s a crisis of confidence in the market right now. First, we had the new ’stress test’ rules for mortgage qualification, then came along some mortgage interest rate increases and finally, late in the year, the news of a massive shutdown at the GM plants in Oshawa. Combine this with higher average sale prices for semi- and detached houses and we get a population of condo owners with pent-up demand for larger housing and with nowhere to go because of affordability issues.
Rental properties were in the news this year as well with higher rents for 1- and 2-bedroom suites and a just-above-zero vacancy rate in the GTA. This may be alleviated somewhat by new condo suites that will be completed and available for occupancy during 2019 but not by enough to lower rental rates.
While single-family houses and condos in the close-to-downtown neighbourhoods stretching east to Victoria Park and west past Dufferin have been selling consistently well and remained a seller’s market, this has not been the same for those 905 areas surrounding Toronto. In York region, they’ve seen negative appreciation numbers and either a neutral or buyer’s market situation. In Durham, they’ve again seen negative average sale price appreciation numbers but a little more market activity since their price points are lower than York Region.
In the near-east, Riverdale, the Beaches and East York all continued to show positive, although low, appreciation numbers (2-3.7%) with vigorous sales activity and a seller’s market showing that there still is demand for houses close to the core.
Downtown condominium suites continued their appreciation rampage with 11-12% year-over-year appreciation in December and an 11.4% average appreciation for the entire 2018. Overall sales were down 18% from 2017 but that didn’t stop condo prices from rising approximately $70,000 east and west of Yonge Street.
What’s my prediction for 2019? I expect we’ll see a continued lower volume of sales across the board and a near-zero or very low overall appreciation rate during the year. I expect that home sales in the 905 will continue to languish while house and condo sales close to the core stay busy with 2-4% appreciation for houses and a lower appreciation rate (likely in the 5-8% range) for downtown condo suites.
Curious about what your condo or house is worth in today’s market? For a condo valuation, go to DowntownTorontoCondoValues.com and for houses, click on DowntownTorontoHouseValues.com.
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Watch the video or read the DECEMBER 2018 & Year-End Market Report Analysis and please keep me in mind when any of your friends are talking about buying or selling real estate in Toronto.
Worst Annual Sales Numbers In A Decade... [VIDEO]
Sales were down 22.5% for December compared to last year with 3,781 houses and condominiums changing hands in all the districts. This was the lowest number of sales for the month since 2012.
Condo townhouse and high-rise suites took a significant 39.4% share of the market with 1,489 units being sold.
The December average sale price for all GTA homes came in at $750,180 – this was a very modest 2.1% increase from one year ago. This was just fractionally above the average two years ago in December.
The active listing inventory is one of the strongest indicators of how slow or fast the market has been moving. The inventory average for the month of December compared to historical numbers and compared to last year at this time were both down almost 12%.
This is actually a good sign since we’re not being overwhelmed with high inventory levels and probably keeping us from seeing a slump in prices in some GTA locations.
The sales-to-listings OR percent-chance-of-selling ratio is how we determine what type of market we’re actually in. 24-28% is a neutral market, below 24% is a buyer’s market and above 28% is a seller’s market.
In December, that ratio finished at 33.1% - 4 percent below last year – and just slightly above the low point that we hit in September. The GTA overall is barely into seller market territory so sellers may need to adjust their pricing expectations if they want to make a move.
The days-on-market average for GTA / Toronto homes was 31 days, 4 days slower than in November.
Watch the video to get the complete December 2018 Market Report details.
If you'd prefer to read the full market report details, click here.
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