Nobody can deny that 2018 has been an unusual year for real estate. Home sales and prices declined after a meteoric rise, which made some Torontonians feel as though they were losing confidence in the market. But how will the market fair coming into the fall and winter markets?
Fortunately, there have been some recent signs of recovery. But what do they mean for the future of the housing sector in the city? And how long will the psychological impacts of falling demand, the Fair Housing Plan, and other recent factors last?
In this post, I’ll look at developments that have impacted the market over the last year. I’ll also delve into more recent shifts—and make some Toronto real estate predictions of my own.
What happened in 2018
Not long ago, home prices in Toronto were surging. Sellers were receiving tidy sums for their houses and condos, and (seeing an opportunity), many new investors also entered the market. The peak came in early 2017, followed by a drop that led many Torontonians to wonder: what happened?
Two of the biggest factors were rising mortgage interest rates and the introduction of the Fair Housing Plan. The new rules caused foreign purchases to drop. And many would-be buyers here in the province found that they no longer qualified for mortgage financing.
These developments have been making headlines for months coming into the fall and winter real estate market, but the question on the minds of investors and sellers is whether the market is recovering.
On the road to recovery
Recent numbers from the Toronto Real Estate Board (TREB) represented some positive news. There’s been strong growth in the number of sales and average selling prices in Toronto’s housing market.
This June, home sales in the city jumped the highest they had in over a decade. And in July, they were up 18.6 per cent from the same month last year.
There was also a marked increase in selling prices. The average price this July was 4.8 per cent higher than it had been during July of last year. This increase included modest price growth for detached homes, the housing type that was hit hardest by recent market changes.
In short: buyers are reentering the market. Their confidence is good not only for the housing sector, but for Toronto’s economy in general.
Predicting the future in 2019
Making Toronto real estate predictions for 2019 is tricky. Unfortunately, no agent has a crystal ball. But here’s what we can say. On the whole, recent changes to Toronto’s market have been positive. And there’s no reason why we shouldn’t expect continued, moderate growth.
That said, low housing inventory is an issue. According to TREB’s numbers, July listings were down by 1.8 per cent year-over-year. What that means is, fewer homes went on the market this July than in July of last year. So while there seems to be an uptick in interest in homeownership, there aren’t quite as many homes available.
In a recent statement, TREB president Garry Bhaura discussed housing supply. In Bhaura’s opinion, provincial and municipal governments need to “concentrate on policies focused on enhancing the supply of housing and reducing the tax burden represented by land transfer taxes, province-wide and additionally in the City of Toronto.”
Whether policymakers decide to make these changes remains to be seen. But one thing is certain: there’s plenty of reason to feel optimistic about Toronto’s real estate market in 2019. Right now—and in the months and years ahead—working with an experienced agent can help buyers and sellers meet their real estate goals.
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