GTA Property Sales and Prices on the Upswing This July
After a shaky first half of the year in the Greater Toronto Area housing market, July finally saw sales activity and property prices rise.
The Toronto Real Estate Board (TREB) reported the average property price rose 4.8 per cent to $782,129 from July 2017 and a sales increase of 18.6 per cent. June to July saw the highest level of seasonally adjusted month-to-month data in 2018, with sales up 6.6 per cent and prices up 3.1 per cent.
“We have certainly experienced an increase in demand for ownership housing so far this summer,” said Jason Mercer, TREB’s director of market analysis.
Prices for detached houses, which declined in price year-over-year every month so far this year, are finally up, albeit just 0.5 per cent to $1,004,647.
Condos are on a winning streak and prices continue to grow faster than any other market segment, up 8.9 per cent to $546,984.
The slow price growth of expensive detached housing versus the rapid growth of inexpensive condo units can largely be attributed to the affordability factor.
After OSFI, the federal bank regulator, changed the lending in January 1 of this year, fewer buyers are likely able to qualify for a large enough mortgage to buy a single-family home. Borrowers must now prove their income can support a mortgage of at least 5.34 per cent, no matter their contract rate. Since detached houses are almost double the price of condos, we are likely to continue to see sustained demand for properties on the lower end of the pricing spectrum.
OSFI’s impact can also be seen across Canada. Detached housing prices are either declining or stable, a far cry from their rapid growth at the market’s peak. It’s the same even in out west, in far more affordable cities like Edmonton and Calgary. Edmonton real estate sold for an average of $370,046 this July, according to the Realtors Association of Edmonton, but single family home prices decreased 2.25 per cent year-over-year. Similarly, Calgary real estate sold for an average of $435,200 this July, according to the Calgary Real Estate Board. But, single family homes only increased 1.27 per cent year over year to $560,451.
Canadians who wish to circumspect OSFI can seek out a credit union or a private lender.
TREB expects the growth seen in July to continue throughout the second half of 2018, as the market settles and sellers and buyers regain confidence from multiple rule changes announced last year.
“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,” Mercer says.
Check out the infographic below to see all the data from July’s GTA housing market:
Zoocasa.com is a leading real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse real estate listings on the website or the free iOS app.
You may also be interested in: How Land Transfer Tax Differs Across Canada
Writer: Danielle Kubes
Disclaimer: All investing can potentially be risky. Investing or borrowing can lead into financial losses. All content on Bay Street Blog are solely for educational purposes. All other information are obtained from credible and authoritative references. Bay Street Blog is not responsible for any financial losses from the information provided. When investing or borrowing, always consult with an industry professional.