Toronto Real Estate Market Update - October 2018
Friday Nov 09th, 2018
Market conditions in the GTA became tighter in October 2018 resulting in a positive impact on average selling prices in comparison to October 2017 and September 2018. Home sales were up 6% and average selling prices were up 3.5% in October 2018 compared to October 2017. Certain asset classes and neighbourhoods continue to outperform while others do not. Buyers and sellers should seek the advice of a professional REALTOR®️before making any decisions in the present market.
Condominiums across the GTA, and especially in Toronto, continue to show strength as buyers priced out of the freehold market settle for condos, millennials step up to purchase their first home, and downsizers seek smaller spaces close to amenities. A strong local economy, foreign investment, and immigration also continue to drive sales and price growth. A pullback in condo strength may be likely heading into 2019 due to rising interest rates and a higher rate of new condo completions increasing market supply.
The new US-Mexico-Canada Agreement (USMCA) reached at the beginning of October seems not only to have eased concerns for the Bank of Canada, but has also positively impacted market psychology.
The Bank of Canada is expected to continue raising interest rates to 2020 bringing us back to a neutral overnight rate of 3% (we are currently at 1.75%). Rate increases are expected to be gradual and based on economic data. Some economists believe that Canadians should be able to absorb rate increases with relative ease using amortization periods as one method to mitigate increased monthly mortgage payments. Rising rates may impact purchasing power and market demand, but should serve to bring real estate market fundamentals back into more balanced conditions - a breath of fresh are from the real estate frenzy of early 2017.
Toronto Real Estate Board (TREB) Market Watch Report
Below is a market snapshot of single family and condominium apartment price growth by municipality as of October 31, 2018.
The figures cited in this note are an average. Please contact us for neighbourhood specific information so you can make an informed decision if you are thinking about making a move.
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Single Family Home Price Index
Toronto: +0.58% (1 Month), -0.04% (3 Month), +0.31% (6 Month), +2.86% (1 Year)
Mississauga: +1.97% (1 Month), +1.22% (3 Month), +0.61% (6 Month), +2.47% (1 Year)
Brampton: 0.00% (1 Month), -0.85% (3 Month), +1.49% (6 Month), +3.58% (1 Year)
Vaughan: +0.35% (1 Month), -1.20% (3 Month), -2.34% (6 Month), -3.56% (1 Year)
Richmond Hill: -1.25% (1 Month), -3.03% (3 Month), -3.36% (6 Month), -7.32% (1 Year)
Markham: -1.03% (1 Month), -1.10% (3 Month), -1.91% (6 Month), -4.54% (1 Year)
Condominium Apartment Home Price Index
Toronto: +0.50% (1 Month), +1.47% (3 Month), +2.86% (6 Month), +10.92% (1 Year)
Mississauga: +0.21% (1 Month), +0.45% (3 Month), +1.46% (6 Month), +10.05% (1 Year)
Brampton: -0.38% (1 Month), +1.91% (3 Month), +3.17% (6 Month), +8.46% (1 Year)
Vaughan: +0.73% (1 Month), -0.36% (3 Month), -0.27% (6 Month), +2.73% (1 Year)
Richmond Hill: -0.31% (1 Month), -2.24% (3 Month), -0.36% (6 Month), +3.01% (1 Year)
Markham: 0.00% (1 Month), +5.31% (3 Month), +3.44% (6 Month), +7.94% (1 Year)
*How to use these numbers: If on October 1, 2018 the price of a condo in Toronto was $500,000, it would be worth $502,500 on October 31, 2018 based on the home price index (HPI). That $500,000 condo in Toronto appreciated $2,500 in October or $80.65 per day.
Prepared by Michael De Luca, Real Estate Sales Representative at Private Service Realty (PSR), Brokerage