Toronto’s real estate market has been at the epicentre of recent studies and reports regarding its overall health and what can be expected in 2019. As per several senior experts and market watchers, Toronto real estate markets have actually got off to a good start in the New Year. As per TREB President Garry Bhaura and other senior officials, the start to the year has been relatively good with prices, listing numbers and overall sales volumes all going up on the year-on-year basis. This presents positive signs, particularly if inclement weather throughout the Greater Toronto Area (GTA) has to be taken into account.
January 2019 market trends
As per reports, 4,009 homes were sold in January 2019 which was higher by 0.6% (year-on-year) while the number of listings went up by 10.5% (year-on-year). There were around 9,456 housing units listed on the TREB MLS system last month as per reports. Additionally, average selling prices increased decently by 1.7% (year-on-year) which is another good sign, indicating consistent buyer demand in the Toronto realty market. There could also be higher price growth for condo townhouses and duplexes among other low-rise high-density housing types. There will also be substantial price growth for condominium apartments according to forecasts by TREB (Toronto Real Estate Board).
With affordability based pressure impacting the overall realty market, several people who are seeking their own homes will naturally opt for housing types which are on the lower side in terms of overall pricing. A lot of the pressure from affordability in the Greater Toronto Area (GTA) as per Garry Bhaura, has been coming from the Office of the Superintendent of Financial Institutions or OFSI which has mandated the two percentage point stress test for mortgages. TREB, is already in talks with the authorities and government for reviewing this mortgage stress test with an aim towards infusing more flexibility for first-time homebuyers in the GTA realty market.
TREB has already forecasted moderate growth trends this year for the Toronto real estate market while thoroughly analysing the market findings for 2018. There were multiple surveys held by TREB for current owners of homes and also prospective buyers in a bid to forecast the scenario for 2019 in terms of price growth and sales volumes while also emphasizing on aspects like the home types that are most favoured by buyers and also the effect of the new mortgage stress test and other guidelines on buying property. TREB has also thoroughly analysed the commercial, residential, rental and land sectors.
According to Garry Bhaura, the report from the organization has emphasized on the creation of more housing options and supply for various communities along with transit-based developments and middle-housing choices. There are two instances highlighted by TREB, namely the Pickering Go and Long Branch stations which clearly indicate how housing units at only 10 minutes’ distance from the transit station have attracted buyers. Additionally, TREB has seen that areas which already have a balance in terms of employment opportunities, housing supply, services, shopping facilities and other infrastructure, have the potential to save on transportation and housing costs to the tune of 10-56% in case of families, individual residents and even those who have retired.
Bhaura has also been emphasizing on the creation of middle housing units which may be filling in a crucial market gap with regard to the home types that are catering to buyer requirements and this will also boost overall affordability levels for buyers.
What’s in store for 2019?
According to the predictions made by TREB, there are forecasts of roughly 83,000 sales transactions which will go through its own MLS system. This will represent growth of 7.2% in comparison to 2018 although it will be lower as compared to the peak levels witnessed in the years 2016 and 2017. There will be a tighter housing market overall and this will help in driving moderate price growth this year with average selling prices in the Greater Toronto Area (GTA) going up by 4.2% as per forecasts. This will take the average selling prices to anywhere around $820,000 according to the TREB forecast.
The new listing volumes are expected to be majorly flat throughout the year while the rental markets may also see some tightening as per TREB. Bhaura has also opined that while it is not possible to fully predict what’s going to happen going forward, market trends at the moment indicate growth in prices and home sales alike for the larger part of 2019. TREB is also advocating for more incentives and some relief for new home buyers via higher rebates for restoring some purchasing power which has gone down steadily over the last decade with skyrocketing growth in average property prices. TREB is also advocating an adjustment of MLTT in order to ensure that homes priced lower than the average threshold do not get higher rates imposed on them which is what is happening at the moment. The need of the hour, according to Bhaura and other experts, is more rebates and incentives for first-time home buyers along with a review of the mortgage stress test and other cooling measures. Additionally, more housing supply is need to increase affordability levels overall in the market.