There were 7,228 home sales in the Greater Toronto Area in March 2018, a 39.5 per cent decline compared to the record 11,954 residential sales in March 2017, according to the Toronto Real Estate Board (TREB). This figure is also 17.6 per cent below the 10-year average for the month of March.
The number of new listings in March fell 12.4 per cent year-over-year to 14,866, which is also three per cent below the average for the past 10 years.
“TREB stated in its recent Market Outlook report that Q1 sales would be down from the record pace set in Q1-2017,” said Tim Syrianos, TREB president, in a press release. “The effects of the Fair Housing Plan, the new OSFI-mandated stress test and generally higher borrowing costs have prompted some buyers to put their purchasing decision on hold. Home sales are expected to be up relative to 2017 in the second half of this year.”
The MLS Home Price Index Composite Benchmark fell by 1.5 per cent compared to March 2017 for the TREB market area as a whole. The overall average selling price declined by 14.3 per cent year-over-year.
Although the change in market conditions played a role in this decline, the dip in average selling price was also compositional in nature. Detached home sales, which generally represent the highest price points in an area, fell much more than other home types. In addition, the number of high-end detached homes priced over $2 million in March 2018 was half of what was reported in March 2017, further impacting the average selling price.
“Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months. It makes sense that we haven’t seen prices climb back to last year’s peak,” said Jason Mercer, TREB’s director of market analysis. “However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings.”
TREB continues to stress that housing and housing affordability must be at the forefront of the policy debates leading into this year’s provincial and municipal elections.
“A well-functioning housing market is not only important to ensure that people have a place to live; it is also important because it supports hundreds of thousands of jobs, billions of dollars in spin-off expenditures and billions of dollars in government revenues,” added Syrianos. “Issues such as the below-average level of housing supply and often inadvisable policy ideas and negative measures such as land transfer taxes, vacancy taxes, speculation taxes and second home taxes should also be thoroughly debated by all candidates.”