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2017 was a relatively strong year for home sales in the Greater Toronto Area (GTA), with 92,394 sales recorded through the Toronto Real Estate Board (TREB) MLS System in 2017. The year started off hot with a record-breaking first quarter, though sales declined in Q2 and Q3, which TREB attributes to the introduction of the Ontario Fair Housing Plan. The greatest effects seem to have been relatively short-lived though, as sales picked up in the year’s fourth quarter, with TREB citing the new OSFI stress test guidelines (effective since January 1, 2018) as an inducement to buy in advance of that. All added up, the 2017 sales number reflects an 18.3% decline from the record figures witnessed in 2016.
“Much of the sales volatility in 2017 was brought about by government policy decisions" reads a prepared statement from TREB President Tim Syrianos. "Research from TREB, the provincial government, and Statistics Canada showed that foreign home buying was not a major driver of sales in the GTA. However, the Ontario Fair Housing Plan, which included a foreign buyer tax, had a marked psychological impact on the marketplace. Looking forward, government policy could continue to influence consumer behaviour in 2018, as changes to federal mortgage lending guidelines come into effect,” continued Mr. Syrianos.
A 12.7% increase in the average selling price of a home was recorded in 2017, rising to $822,681. Extremely tight market conditions during the first four months of the year increased demand before subsiding during the last two thirds of 2017, with fewer sales and an increase in listings coming together to slow down overall price growth. This drop was quite noticeable in the detached house market segment, while other market segments weren't as hard hit.
“It is interesting to note that home price growth in the second half of 2017 differed substantially depending on market segment," said Jason Mercer, TREB’s Director of Market Analysis. "The detached market segment—the most expensive on average—experienced the slowest pace of growth, as many buyers looked to less expensive options. Conversely, the condominium apartment segment experienced double-digit growth, as condos accounted for a growing share of transactions,” continued Mr. Mercer.
TREB will be releasing their third annual Market Year in Review and Outlook Report at the end of the month, set to add more information to the commentary, including an outlook for home sales and prices, as well as research on housing supply options relating to the ‘missing middle’ housing category.
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