As we enter the third quarter of pandemic activity in the city, one thing is becoming abundantly clear – houses are in high demand… and condos, not so much!
The average price in the city hit a new all-time high of $968,318 – largely thanks to the surge of prices in both the detached and semi-detached house markets. Condos continued to trend down in price with an average price of $668,161 nearly unchanged from last year’s monthly average.
As rent prices continue to decline for condos (down 15 – 20%), and supply continues to increase, buyers have ample options to choose from. With the holidays around the corner, we’ve advised many clients to hold off on plans to sell (if possible), and revisit listing in the second quarter of 2021.
Three Trends to Watch
a second lockdown may be looming in the city, and with it could come a further hit to consumer confidence. Could this impact all housing styles?
with rent continuing to decline, will condo prices continue to soften?
What impact, if any, will this have on the pre-construction market?
1,228 sales took place 67 more homes than the previous month (5.77% increase in sales) 194 more homes than the last year (18.76% increase in sales) The average price of a detached home was $1,470,857 A decrease of $16,265 compared to the previous month (1.09% decrease in price) An increase of $147,842 compared to last year (11.17% increase in price)
416 sales took place 5 fewer homes than the previous month (1.19% decrease in sales) 94 more than the last year (29.19% increase in sales) The average price was $1,154,087 An increase of $8,528 compared to the previous month (.74% increase in price) An increase of $54,285 compared to last year (4.94% increase in price)
409 sales took place 7 more homes than the previous month (1.74% increase in sales) 69 more homes than the previous year (20.29% increase in sales) The average price was $828,090 A decrease of $39,915 compared to the previous month (4.60% decrease in price) An increase of $32,975 compared to the previous year (4.15% increase in price)
1,438 sales took place 111 fewer condos than the previous month (7.17% decrease in sales) 137 fewer condos than the previous year (8.7% decrease in sales) The average price was $668,161 A decrease of $18,030 compared to the previous month (2.63% decrease in price) A decrease of $5,530 compared to the previous year (.83% decrease in price)
How Did the Toronto Real Estate Market Perform in 2018?
2018 wasn’t much of a record-shattering year, and I don’t think anyone should be very surprised by the outcome! As we forecasted at the start of it, 2017 hit new heights in the city – and keeping on pace in 2018 would be nearly impossible. But that doesn’t make 2018 a disaster either. In fact, 2018 was a more balanced and easier to navigate market than in years past… so with that being said, let’s take a closer look at what happened!
Average Prices in Toronto for 2018
The average price of real estate in Toronto for 2018 was $783,082! There was a two-way tie for the highest average price with June and October both clearing $807,000. $736,783 marked the lowest average price and was set in January. Compared to 2017, the overall average price in Toronto declined by 2.85% or $23,000.
Total Number of Listings In Toronto for 2018
The busiest month of 2018 was May with more than 19,000 properties coming to market. As impressive as the number sounds, we were still 6,000 properties short of the 25,000 listings reached in May 2017. The slowest month for new listings was December with only 4,300 coming to market and was expected with the seasonal slowdown during the holidays.
Total Number of Sales
In total, we had 77,909 sales in 2018. That represented a sharp drop of 15,249 fewer sales (16%) compared to the 93,158 sales in 2017.
Days On Market In Toronto for 2018
It took 25 days (on average) for properties to sell in Toronto. From March to June that number went down to just 20 days, and in January and December, it went up to 30 days.
A Summary of 2018
To better understand 2018, we have to start back in 2017!
2017 was a pivotal year in the city, reaching historical highs for both prices and the number of properties sold. The driving source of the price appreciation in the market was the soaring prices for detached homes throughout the first part of the year. At its height, detached homes were selling for more than $1,500,000. Affordability coupled with buyer fatigue, government intervention and changes to mortgage lending resulted in a swift cool down from May to August. We saw prices start to pick back up from September to year end, but never quite reaching the highs we saw earlier in the year.
At the beginning of 2018, we cautioned that the media would focus solely on “Year over Year” comparisons. We also forecasted that the numbers wouldn’t be as strong as in 2017, and to expect sharp contrasts between the two years. It’s hard to get a real sense of where the market is at if you’re only comparing against a record-breaking year (and the same is true if we were to compare it with a less than stellar year). For this reason, we also added analysis of the three-month trend for each segment and gained a more accurate look at the direction of the market!
Prices of detached homes proved to be a double-edged sword. As they cut through the headlines of 2017 and boosted the monthly averages – they did the opposite in 2018, performing like more of an anchor bringing prices and overall averages down.
Detached homes experienced the biggest price decline in 2018. Prices were down by $76,000 on average (a 5.5% decrease year over year) to just $1,307,604.
On the other side of the scale, condo prices helped the market maintain its pace and took the top awards in several categories.
Condos represented the best-performing segment of the year – up 9.4% (from January-December 2018), they had the highest year over year appreciation – up 9% (or $49,900) and also recorded the highest number of sales at 16,348!
Townhouses started off strong, nearly tieing the 2017 record-setting price of $793,129 by recording a high of $792,180 in April of 2018. But from there on out, prices started shifting down with prices ending the year at $714,456.
In 2018, the Semi-Detached market caught our attention the most… and we think they’re going to continue to be the segment to watch in 2019! From January to November, prices have gone up by over 13% (even higher than condos). There are two main reasons for the sharp appreciation: Price Point and Housing style.
1. Price Point – semis have been hovering around the million dollar mark throughout the year. In many parts of the city, you can still buy a semi for less than a million dollars. This gives buyers the flexibility to purchase with less than 20% down (something that can’t be done with houses priced over a million). Even at the million dollar mark, semi’s represent a housing style (with land and a backyard) for much less than the detached average of $1.3 million!
2. Housing Style – Most people start the property ladder single, and in a condo. As they partner up and move up the ladder, a house is typically the next step. We think that as more condo owners trade up, demand for houses will increase (as we partially saw in 2017). The semi represents a more affordable option and smaller price gap when compared to a detached home. Most semi’s also come with 3 or more bedrooms. Bungalows (at times can be priced in the same range as semis) often times only offer 2 bedrooms. For those who want the space and style of a house but without the higher price found in the detached market – the semi is our pick best-appreciating segment in 2019!
Individual Market Performance by Segment
Average Price: $1,307,604 Yearly Percent Change: -5.51% Yearly Dollar Amount Change: -76,207.58
Yearly High: May $1,426,094 Yearly Low: December $1,145,892
Average Price: $991,105 Yearly Percent Change: +1.75% Yearly Dollar Amount Change: +$17,081.50
Yearly High: May $1,067,128 Yearly Low: August $891,208
Average Price: $738,458 Yearly Percent Change: +3.56% Yearly Dollar Amount Change: +$25,407.17
Yearly High: April $792,180 Yearly Low: January $712,186
Average Price: $590,832 Yearly Percent Change: +9.03% Yearly Dollar Amount Change: +$48,936.67
Yearly High: September $615,582 Yearly Low: January $543,279