What is The State of Toronto Residential Real Estate Market in 2019?
This is the question on everyone’s mind. And while we’re certainly not still living in the outrageousness that was the market of 2017, you’d be hard pressed to find enough evidence to support a projection of a total crash any time soon. It appears as though most experts are saying 2019 will be a sluggish year – nothing more, nothing less.
The first quarter
Overall, the first quarter of 2019 was relatively steady. Sales went down by only 1% in comparison to the first quarter of 2018 (which may not be saying much since the first part of 2018 was very slow), the number of new listings went down by 1.5% and the average sale price went up by 1.1%.
While there was a continued decline in new development launches and sales, construction in the GTA reached record highs! It’s ironic to see that during the first quarter of 2019, pre-sale launches were lower than they’ve been in 10 years, growth in sale prices has slowed down considerably and yet the number of construction projects hit record-breaking numbers. This is attributed to the 2017 spike in new openings, which are now developments that have reached their construction phase.
Condominium prices still rose, but increases were less substantial than those we saw in the period from 2016 to 2018.
What’s happening right now
In April of 2019, the GTA saw a substantial year-over-year increase in home sales. Transaction numbers jumped up by 16.8% and sales were up 11.3%, compared to March. It appears as though April acted as a “catch-up month” for the GTA residential real estate market after a slow start to the year in Q1. Price growth was driven by the condo market and the higher-density low-rise market segment, whereas the price for detached homes has fallen year-over-year. This indicates that the OSFI stress test has hit the detached housing market the hardest, probably due to the fact that this segment has the highest price point on average.
And don’t get your hopes up too high about April’s rebound because even though sales were up, they still remain well below the levels April has seen for the majority of the last decade.
In May, we see another element come into play. The Ontario government finally released new numbers that reflect the number of non-resident, foreign-buyer home purchases in the GTA since the implementation of the foreign buyers tax. The tax appears to be having the intended effect since foreign buyers made up 5-10% of the market prior to the tax and only 4.7% in the month following the tax implementation. Now, two years later, the foreign buyer market has slowed to a mere trickle.
But don’t get discouraged!
Those hot April numbers have many realtors expecting May and June to be hectic months in comparison to this year’s slow first quarter. Not only is the number of new listings poised to surge, but the quality of those listings also appears to be rising. And if that proves to be true, this could take those buyers sitting on the sidelines and bring them to the signing table.
What to expect in the months ahead
As always, there are many factors at play that ultimately dictate the state of Toronto’s real estate market. The forecast coming from most key industry players is that the market will remain on the slower end, but steady.
Did you know?
A recent study by the Government of Ontario says that Toronto will grow to a population of over 9 million by the year 2041.
Over the last 10 years, Toronto real estate has gone up 131%.
Prices remain strong – regardless of a dwindling market and condos pushing down the average home sale price.
Crash? Not likely. And from a long-term standpoint, these are just a few of the factors that indicate Toronto’s status as a world-class city, which in turn, supports a strong real estate market.