The Toronto price chart has become scary over time but many are still hoping it will turn the corner. Real estate investors and home buyers alike are nervous about what will happen next.
The housing and condo market hasn’t been at its best over the past few years and this year it hasn’t seen any major changes, although there may be hope. With the dizzying rate of change that took place in 2017, we’re still seeing signs of weakness in Toronto’s real estate and the overall Toronto real estate price history chart. In fact, Toronto real estate prices has seen a noticeable increase and unit sales have fallen significantly.
What’s the Issue?
The issue lies in the fact that the high-end of Toronto’s (and the rest of Canada’s) real estate market has yet to adjust to the new government imposed rules, which have: made it tougher for Canadians to qualify for mortgages, reduced interest rates, and restricted real estate purchases by non-Canadians. In addition to this, in January more stringent mortgage guidelines came into play.
Canadian government officials haven’t exactly made it easy for real estate developers to tame their absurdly growing prices. While the rules were meant to curb the ridiculous real estate prices and ultimately reduce the number of people in debt, the market is still trying to correct itself. In December, many home buyers rushed to enter the market before the rules were imposed; so as demand rose, prices skyrocketed. The market is still bearing the brunt of this event.
The Earlier Months of 2018
January did not see the housing market in a good position. It got off to a bad start as sales tumbled in January and the real estate inventory increased. The Toronto Real Estate Board (TREB) revealed that housing sales in Toronto dropped dramatically by 22 per cent this year compared to last year and home prices have become more unaffordable to Torontonians. The erratic Toronto house prices chart patterns have left many developers panicking. According to Jason Mercer, market analysis director, “”There are emerging indicators pointing toward increased competition between buyers, which generally leads to stronger price growth,” Mercer said in a statement.”
During the earlier months of 2018 Toronto price chart showed home prices falling by 4.1%, as revealed by the Real Estate Board (TREB). To be more precise, the prices for condominiums and single family residences fell, as more residents became unqualified for mortgages and real estate inventory rose.
According to Mercer, many had anticipated that homes prices on the Toronto real estate prices chart to flat-line after last year events. Last year, prices were at an all-time high due to the increase in demand and the limited number of properties that were available for sale.
Is the Toronto Real Estate Prices Chart About to Stabilize?
The lower real estate prices doesn’t necessarily mean that there is a big win for home buyers. Of course, it will eliminate some of the pressure that is usually placed on prospective buyers to enter the market before prices go out of reach, since many people are now able to purchase a home below previous asking prices. However, the issue is that real estate prices aren’t really dropping, they are flat-lining. In fact, home prices haven’t greatly improved for the average Canadian either.
The average Toronto housing prices chart is showing that the overall real estate prices index hasn’t changed much in January, despite the decline in demand as revealed by Bloomberg calculations. Since May, there as only been a 9 percent decline in home price index, primarily due to the decline in prices in single family homes in the city. However, the high-end condominium segment witnessed a double-digit annual growth. Many are optimistic that current market conditions will encourage an increase in price growth for many properties for the remainder of 2018. In fact, while the market was at its lowest in January for the last few years, new properties entering the market have increased by 17 percent from the same period during 2017. Active property listings have also increased by 136 percent from the previous years.
But is it right it be optimistic that Toronto price chart will soon stabilize? Let’s take a look at past events.
A Look into Toronto’s Past Real Estate Prices
The average Toronto housing prices graph indicates that the real estate market hasn’t necessarily been stable over the years. There have been several boom-and-bust cycles throughout the years. There are two main takeaways from the Toronto real estate prices chart above. According to the chart, real estate prices seems to have risen consistently over the years; while in the short run there can be a decline in housing prices for years, and even a decade.
Overall it’s good to assume the market has been through the worst. As we discussed earlier, the average house price in Toronto saw a noticeable decline after the central bank raised interest rates in response to new government rules. Buyers are more constrained and this has led to the decline in sales, especially for high priced luxury condos. However, Bank of Canada (in addition to many analysts) has suggested that the housing prices will begin to stabilize after the brief slump. Since April, the market has been showing signs of stabilizing, despite the fact that the house prices chart are significantly low and also the fact that property sales have been the lowest since 2009; condo and housing developers are hopeful that the market will come back.
What’s the Direction for Toronto Real Estate Prices
One of the key factors that makes investing in real estate in Toronto far more beneficial is simply the fact that overall selling prices have managed to remain considerably below the previously mentioned record price points. This is supported by reports from the Toronto Real Estate Board (TREB) — in April 2018, the selling price for the average home in the Greater Toronto Area (GTA) was valued at $804,584; this amount showed a significant reduction from the price point of $918,184 from April 2017, a 12% reduction.
Following this same trend, the average sales price was actually 0.2% lower than the amount from a month prior (March 2018). The reasoning behind this overall sales trend has been observed to be based on a flattening tendency that been observed over the past few months. This seemingly stemmed from a higher drop in prices for January and February this year, which has now been petering out.
All-in-all, these figures seemingly suggest that the recent policy changes — such as the somewhat stricter eligibility regulations for mortgages that was implemented at the start of the year — have not lead to a major decline in the local housing market and the relative impact that was observed in the past few months is expected to tail off.