Toronto Real Estate Board Director of Market Analysis Jason Mercer perhaps sums up the Q1-2018 Greater Toronto Area housing market best:
“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. 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.”
Now look at this chart, which shows those two “starkly different periods of time”. What the chart shows is the huge run up in prices in the first half of 2017, followed by a reality check, as prices declined rapidly in Q3, after the introduction of government measures to cool the market. Prices rebounded somewhat in Q4, as some buyers and sellers accelerated their property ownership decisions prior to the introduction of the more stringent lending guidelines which came into effect in January, 2018. And now, we are back to some period of relative normalcy, with modest price appreciation in Q1-2018.
So it doesn’t really matter that units sales were down by almost 40%, from 11,954 units in March, 2017 to 7,228 units in March, 2018, or that prices were down on average by 14.3%, from $915,126 to $784,558 because these results cover two starkly different periods of time, and are, therefore, not comparable.
What is meaningful, however, is that the number of active listings in March, 2018 was 103% higher than the level in March, 2017 and that the average time it took to sell a home in March, 2018, at 20 days, was roughly the same amount of time it took back before the market went crazy in Q1-2017, when the average time it took to sell a home in the GTA was below 10 days. And the average selling price has actually increased in each of the last 3 months. I’ve said it before and it bears repeating that we are in a balanced market, one which TREB believes is poised for stronger growth later in 2018, particularly in the condominium market where prices have been steadily on the rise and inventories have become ever more scarce.
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