The City of Toronto housing market finally rebounded this July after experiencing a rocky first half of 2018, with all market segments increasing in price from July 2017, reports the Toronto Real Estate Board (TREB).
Yet, condos in the 416 still show the fastest price growth, up 9.2 per cent to about $582,550. (The average price of a condo in central Toronto is even higher at $653,137.)
Semi-detached houses are the next fastest-growing property type, up 7.4 per cent to $935,300. Detached houses, which have posted year-over-year losses in 2018 thus far, are finally gaining and are now up 3.6 per cent to $1,350,700. Townhouses for sale in Toronto are mostly stable, gaining just 1.5 per cent to $718,698
“We have certainly experienced an increase in demand for ownership housing so far this summer,” says Jason Mercer, TREB’s director of market analysis. “It appears that some people who initially moved to the sidelines due to the psychological impact of the Fair Housing Plan and changes to mortgage lending guidelines have re-entered the market.”
Condos continue to post the most rapid gains likely because they remain the least expensive market segment. This January the federal bank regulator, OSFI, tightened mortgage lending rules. Prospective buyers must now have income to support a mortgage at at least 5.34 per cent, which likely severely reduced the amount many Torontonians were able to borrow. Those who could have borrowed enough to buy a house before the rule change, may now only be able for afford condos, which are less than half the price. Prospective buyers may also be searching for alternative lenders not under OSFI regulations, such as credit unions and private lenders.
Another major change this July in the Toronto housing market is the surprise increase in sales. The first half of 2018 experienced a sales plunge compared to last year, even for condos, so it was unclear how robust the summer market would be. All property types this year were selling less units than in 2017, often in the double digits. Properties were also taking much longer to sell, often twice the amount of time than in 2017.
That’s all turned around now.
Sales data from MLS listings in Toronto shows that 1,415 condo units were sold, 5.8 per cent more than last year’s 1,345. The average time spend on market is consistent at 20 days.
Similarly, sales for all property types are up: semi-detached up 16.9 per cent, detached up 22 per cent and townhouses up 30.8 per cent.
TREB is optimistic about prices continuing to increase in the second half of the year, reporting that “the annual growth rate looks to be trending toward positive territory in the near future”. Check out our infographic below to see all the details:
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