Listed below I have provided a detailed video explaining the results for the first quarter of the 2018 real estate market for the Greater Toronto Area, but if you don’t want to listen to me go through it and would rather read it, I have provided for your review an illustration and explanation in this blog.
The real estate market so far in 2018 is substantially different from the first quarter of 2017. Toronto locations in the 416 area have performed well whereas some 905 areas are not as hot as last year at this time. Detached home sales and average prices have decreased compared to last year, but condos are continuing to increase in value even compared to last year’s record breaking performance.
In March 2017 we saw all-time record highs in prices and sales for any previous March month in the GTA real estate market. So when we see sales down 39.5% and average prices down 14.3% we are comparing this March 2018 to a record breaking March 2017. The average price in March 2018 was $784,558 a decrease of 14.3% from the average price of $915,126.
To better understand the current real estate market conditions I have pulled the March 2016 numbers for comparison since March 2017 was an extraordinary year. The average price in March 2016 was $688,181 and increased by 33% to $915,126 in March 2017. The 33% increase last year sounded alarms and the provincial government stepped in to make some changes to cool down the market.
If we compare the average price for the month of March 2016 which was $688,181 to the average price of March 2018 which was $784,558 it has increased by 14%. If we consider March 2017 as an anomaly then we are back on track to normal levels of increases because in two years a 14% increase is a healthy average price gain. Not many other investments in two years can increase by 14% and seem to have such a negative reaction.
The average prices for all home types are lower than last March 2017 except for condos. Condo average prices in the 416 area are up 7% and in the 905 area are up 2% year over year. Condos are keeping the market stable due to their affordability.
Detached homes are doing the worst out of all home types. In the 416 area detached home average prices are down 17.1% and in the 905 area down 17.9% year over year for the month of March 2018. If you were following my previous updates we saw at the end of last year detached home average prices were the first to go in the negative compared to the previous year and the 905 area was the first followed by the 416 area.
Home listings for the month of March 2018 were on the market an average of 20 days while last March 2017 they were on the market only an average of 10 days. Homes are sitting on the market twice as long as last March. The York region has seen one of the highest average days on the market for home listings, while the area with the least average days on the market for home listings is the City of Toronto.
We have to keep monitoring the mortgage interest rates as the next announcement is scheduled for May 30th by the Bank Of Canada. There is speculation there will be at least one more interest rate increase in 2018. If there is any increase in mortgage interest rates it will make it more difficult for buyers with the already strict mortgage stress test implemented by financial institutions to buy a home.
Overall the real estate market is stable and balanced since home prices are where they should be. Home prices are not getting out of control like last March 2017. We have to remember the first quarter of 2017 was a record year and at this time last year the provincial government stepped in and implemented the Ontario Fair housing plan to settle down the market. Also the mortgage stress test implemented at the beginning of this year has played a factor along with the interest rate increase that has limited many home buyers’ choices. The city of Toronto real estate listings are selling faster than any other part of the GTA. Condos remain a great investment and are leading the pack in housing options due to affordability.
Stay tuned for my next blog to see which direction the Spring housing market is headed. If you have any questions or would like specific real estate information regarding your property and area please feel free to contact me anytime.