April 2018 Market Update
March sales statistics were released this week. As predicted, they demonstrated a 13% drop in average prices (all home types) since March 2017 in Toronto.
However, March home prices were actually up 1.4% from February, making it the fourth consecutive month of increasing prices in Toronto.
The Toronto Real Estate Board (TREB) attributes part of this decline to the nature of sales today: "Detached home sales, which generally represent the highest price points in a given area, declined much more than other home types. In addition, the share of high-end detached homes selling for over $2 million in March 2018 was half of what was reported in March 2017, further impacting the average selling price."
Jason Mercer, TREB's Director of Market Analysis also made it a point to mention that "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.”
Just like Jennifer Keesmaat said at the Real Estate Round Table, there have been so many changes this year, there are simply too many factors at play to know what's having the biggest impact. We have rising interest rates, new mortgage rules, changing government policy, and all of these elements are affecting the market in different ways.
It's evident that buyers feel the same way as people continue to wait to see what happens. What's interesting is that based on RBC's annual Home Ownership Poll, Canadian's intentions to buy a home are at the highest they've been since 2010. Fifty percent of millennials reported that they plan to buy a home in the next 2 years. And 84% of young Canadians said that they believe buying a home is either a good or very good investment.
A few months ago, buyers were holding back to see if the market would stabilize, therefore regaining their confidence in the housing market. Now buyers continue to hold back, but now with the intention of waiting for a good deal.
What remains the same however, is that good properties that are well priced move off the market, and quickly. For the right properties, multiple offers are intensifying and buyers are motivated to pick up good inventory.