03 Nov Toronto Real Estate Forecast 2018 – 2019
Toronto Real Estate Market Forecast/Update 2018
Momentum in the greater Toronto housing market picked up in October. The Toronto Real Estate Board’s latest news release on Nov 3rd, showed an unusually strong fall market. October’s sales were up over September’s, yet most of that rise was in the condo market.
Early stats for November show a big rise in listings, which means sales could rise again this month.
While the talk has been about rocketing house prices in Toronto, the Toronto condo market is blooming and the demand for new construction condos is brisk. Rather than a market slowdown or flat market, there also some forecasting a housing boom. In fact, Justin Trudeau just announced a program to being in 1 million new immigrants over the next 3 years.
You can view the prices for each city and MLS district below.
TD Bank senior economist Michael Dolega is quoted as saying the market looks good “after some near-term weakness, likely to last into mid-2018, activity should begin to rebound thereafter given the fundamentally supported demand related to strong job growth and strengthening wage dynamics.”
The upcoming mortgage changes in January means buyers are putting rush orders in now. Condos below $500k are selling well and will continue to do in 2018. The key for Realtors is helping buyers find an affordable condo, or a house with rental income potential.
Rental Income Investment Property
Some smart buyers are looking at financing solutions that give them a shot at rental income. Real estate investors in Toronto, Vancouver and elsewhere are focused on rental income investment properties. You should be too.
In October, home sales were down 2,000 transactions from October of 2016, while prices rose $18,000 YoY, giving us a little perspective on what is still a seller’s market here in metro Toronto. The number of listings dropped from 16,469 in September to 14,903. With the economy improving, we might already forecast higher prices in spring 2018, but nowhere near last spring’s madness.
What is the most notable change? It would have to be condos. Sales dropped by 24.9% yet condo prices rose by 21.8% across the GTA. Rental prices are skyrocketing as rental apartments dry up because of the rental price controls. How much further will Toronto condos climb in price?
“Every year we generally see a jump in sales between September and October. However, this year that increase was more pronounced than usual compared to the previous ten years.” — Tim Syrianos, President of TREB. And Jason Mercer, TREB’s Director of Market Analysis says the pschological impact of the foreign buyers tax and other government measures are beginning to wear off.
Home Prices up Year Over Year
The MLS® Home Price Index Composite benchmark price in October was up by 9.7% on a year-over-year basis in October, to $780,104 from $762,691 in October 2016.
Are you wondering if the Canadian economic forecast is strong enough to support a strong Toronto real estate market? It has its ups and downs, but the spectre of a housing crash seem low. Take a good look at the TREB market stats below. Prices are all over the place and many sellers are torn over what price to list their home or condo at.
October Sales Activity Report and Trends
Bookmark this page as it is updated very frequently.
Normally Toronto house prices slide back during the winter. That could help solve the afforable housing issue. Yet the market is 2 tiered – young buyers with limited financing and a rising group of detached houses that are well out of their reach. 2018 should be the year of the condo. Contrast the Toronto market with the Calgary Housing Forecast for greater investment insight.
October TREB Market Report with Jason Mercer
Considering buying or selling? Take a look at some of home buying tips and home pricing tips posts and this new post on the best renovations to grow the price of your house for sale. First Time buyers should remember that house prices always climb even through recessions as you’ll see in the graphics and housing data below.
Some recent reports from Toronto realtors have it that buyers are back in the market this fall, yet there aren’t enough listings. They feel Toronto House prices will rise again. However, buyers are probably gleeful at the drop in house prices over the last 5 months. If it continues, they might be able to find a great buy. The Toronto economy could boom for sometime if NAFTA is unaffected, yet CMHC beleives there are dangers lurking for this market.
New sales data from TREB’s Marketwatch report paints a telling story of what happened in Toronto Real Estate in the summer of 2017 and how 2018/2019 might look. Buyers and sellers are wondering if the Toronto housing picture will mirror the Vancouver real estate forecast where Vancouver condos are king. Vancouver seems to have held its own which means the Toronto market might be safe too. Let’s not kid ourselves. A crash or a housing slide in Toronto is still a possibility (government).
Consider this your most up to date report on the Toronto Real Estate Market – lots of food for thought below. Enjoy the monthly price charts below which may help you decide whether it’s time to sell your house. Also see the Mississauga real estate forecast if you’re out in Mississauga, Milton, Oakville or Brampton.
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New Fed mortgage rules and a higher mortgage rate means buyers will need more money down and be forced to pay higher mortgage payments. The OECD and the World Bank are constantly nattering about Canada’s housing issues. What are they seeing that we don’t?
Most experts are calling for flat prices right through 2018, however there is still a lot of unsold new home inventory and governments are clear in their intent to suppress the housing market. Those considering putting up their houses for sale might be acting much sooner.
More Torontonians Putting Up their Houses for Sale
Before it was all about finding a house for sale, and now there’s lots of houses for sale. It’s almost certain you’re going to get a much lower price for your GTA house in the next 16 months. You’ll want to start reading my how to sell your home tips posts.
The Toronto situation seems to mirror the US housing forecast only with troublesome government meddling in TO. Experts suggest it is government action that causes the markets to suddenly slide out of control.
Toronto Housing Market Predictions from the Experts
Let’s start off with the Swiss Banks review.
Is BNN’s “end of the housing boom” story valid? Does real estate drive employment in Canada?
CMHC keeps the red flag hoisted on real estate
Trump and squashed Canadian exports represent a big worry.
Are you having difficulty selling your home or condo? Drop me a message
I will get a trusted and professional agent to help you. It is tough but not impossible to get a good price for your home or condo and sell sooner.
New MLS stats from TREB show sales in August dropped 34.8% year over year and the number of new listings on TREB’s MLS® System, at 11,523 which is 6.7 % lower than last year at his time. This is the fewest listings since 2010. Prices did decline yet are still higher than August of 2016, and did not decrease evenly in all TREB districts.
According to a report in the Globe and Mail, the average selling price for all homes in the GTA hit $760,356 in the first half of July compared to $707,847 in July 2016. There was a surprising drop in sales transactions : 5921 which is down 1479 solds from 7479 in June.
While some areas such as the 905 have seen big drops, (houses are sitting and have to be rented now) areas in Toronto have maintained prices. These neighbourhoods offer a more reliable bet for sustainable property investment value. Many property investors have discovered the hard way, what the word sustainable means in bottom line dollar terms. Because of demand, two hot areas right now are rental property investment and student housing investment.
Adding to the story this month is a higher loonie, higher mortgage rates, foreign buyer withdrawal, new tax on vacant homes, and homebuyers losing interest. And in response, homeowners make a desperate attempt to sell at lower home prices.
Condos are the Hot Story in Summer 2017
- condo average price up over half a million dollars
- condo prices have risen 28% from second quarter of 2016
- average condo price in Toronto rose to $566,000
- condo sales volume dropped 8%
- number of new listings grew only 1%
- condos in C09 district rose to an average selling price of $1.345 million
- Condos in C08 and C01 have the highest volume of unit sales and an average price of $603,000 and $627,000 respectively — high volume translates to more availability and lower prices
The Best Toronto Neighbouhoods are Sound for Investment
TREB stats show specific districts or neighbourhoods in Toronto have not seen a price decline and these ones below have seen price increases:
w10 – Rexdale Kipling, West Humber Claireville, Kingsview Village, Vaughan Grove
w09 – Willowridge Martingrove Richview, Humber Heights
w02 – High Park North, Junction Area, Kingsway South
c02 – Annex, University, Yonge St Clair
c04 – Bedford Park, Nortown, Lawrence Park North, Forest Hill North, Lawrence Park South
c12 – Lawrence Park North, St. Andrew Windfields
c13 – Banbury Don Mills, Parkwoods Donalda, Victoria Village
c15 – Bayview Village, Hillcrest Village, Bayview Woods Steeles, Pleasant View
e01 – South Riverdale, North Riverdale, Danforth, Woodbine Corridor
e06 – Oakride, Clarilea Birchmount, Birchcliffe, Cliffside
Many of these Toronto neighbourhoods are in such strategic locations for employment, that given the housing shortage, urban intensification, poor transit and roadways, that the condos and homes in them will never see a significant price drop. The events of the last 3 months with the Liberal’s fair housing act was an acid test. These Toronto neighbourhoods look to be the best neighbourhoods for safe real estate investment.
US investors should continue to follow the Toronto real estate market as the low Canadian dollar continues to create better real estate investment value.
The Toronto Condo market in July on the other hand is active likely due to affordability. Condos are selling well at 2% to 6% over asking price and comprised 91% of all sales. New apartment and stacked townhouse sales grew 89% year over year, compared to a 72% drop in house sales.
I suspect 2018 will bring moderation given the rhetoric around the NAFTA deal, tighter lending rules, higher loonie, and very high home prices.
Share the August 2017 Stats and Toronto Forecast with your family and friends, as almost everyone is interested in the direction of the housing market. It affects the GTA economy, jobs and business oulook. This page is updated frequently.
A Look Back at 4 Months ago: TREB June 2017 Real Estate Report
Highlights from the June TREB market report:
- Sales dropped 37% year over year, on top of May’s whopping 50% dive
- residential listings were up 16%
- Prices rose 6.3%
- The MLS® HPI composite benchmark price up by 25.3% on a year-over-year basis in June
- Home prices are down 1.1% month to month
- apartment prices rose 1% month to month (higher rents)
What’s Compelling about the Toronto Housing Market?
Toronto is a high value housing market similar to New York City or the Bay Area of California, and TO is a city destined to be a super city. It’s unlikely that a property purchase in Toronto will be a disappointment over the long run. And detached house prices will rise much further due to a severe housing shortage, improving economy, and rising population.
Despite the Ontario government’s new foreign buyers tax threat, demand for housing won’t fall. As the loonie falls in value, Toronto home prices turn out to be reasonable internationally, and may be a worthy investment for rising wealthy Americans. Canadian real estate is still a good alternative to US Real Estate in 2018.
While many buyers would like to live in Central Toronto, Oakville and Milton the prices in these cities is prohibitive. Instead, buyers are looking north to Vaughan, Newmarket, Aurora, Bradford, Barrie, Innisfil, and East Gwillimbury.
Video: Benjamin Tal speaks with BNN about Toronto Housing Market:
Share this detailed monthly home prices report with your friends.
Toronto MLS Real EState Board Sales Stats for October
|Average Price – Detached Homes TREB – October 2017|
|City||October 2017||September 2017||August 2017||July 2017||June 2017||May 2017||April 2016||Price Change Last 17 months||Price Change Last 6 Months|
Stats above courtesy of TREB Market Watch Report
A Look at Detached House Prices in Toronto’s MLS Districts
|Toronto House Prices — MLS City Districts Home Price Comparison|
|TREB District City of Toronto||Avg Price October||Avg Price Sept||Avg Price August||Average Price April 2016||Avg Price April 2017||Avg Price Mar 2017||Avg Price Feb 2017||Price Change Since Feb 2017|
Will 2017 Sales in Toronto be a New Record?
One district in Toronto saw its prices rise $1 million since Sept! See TREB charts below.
TREB forecasted another strong year for home sales via the MLS®. Their outlook for the Toronto region was 100,000+ home sales for the third consecutive year. Between 104,500 and 115,500 home sales are expected in 2017, with a point forecast of 110,000. TREB’s districts include Mississauga, Oakville, Vaughan, Newmarket, Aurora, Richmond Hill, Markham Bradford, Scarborough, Brampton, Oshawa and Milton.
But what drives the Toronto housing market? Will it succumb to the same fate as Vancouver or worse? If you’re a buyer, you’re wondering which neighbourhoods and towns to focus on and whether this market will tank. If you’re a seller, you’re wondering if you’re going to miss the biggest payday of your life by not selling. If you’re close to retirement, you may want to carefully review your choice not to sell. 2017 is a grand time for you to sell and move onto a better life.
The 16 Key Factors Driving The 2017 Toronto Housing Market:
- severe shortage of housing stock in the GTA region
- rising demand from buyers who have been renting
- restrictions on development land for housing
- Trump and NAFTA free trade deal and implications for Toronto’s automakers
- will the low dollar continue?
- will oil prices stay at current levels?
- rising numbers of millennials hunting for a home or condo
- bank of mom and dad continues funding kids home dream
- rising interest/mortgage rates
- Toronto and Ontario land transfer taxes
- rates of employment and income
- asian and persian home buyers and investors rush over?
- will China curtail its outflow of investment money?
- business investment in Ontario continues falling
- consumer debt loads and credit ratings
- further federal restrictions on first time buyers/downpayments
- commuting distances and new construction in York region and Vaughan
Toronto Home Prices for June 2017
This graphic courtesy of TREBhome.com illustrates how hot Toronto homes prices have been or each type of housing. Despite Liberal policy changes, GTA properties have increased their value overall. (See the Toronto Condo market outlook too).
Sharing is Good for Your Social Health!
The Toronto real estate market is in a precarious state. Help your friends and contacts who may be wondering if now is the right time to sell, before the housing crash. You can get your price in 2018.
And from this telling graphic above, the shocking rise and fall of detached home prices tells us something is wrong with the Toronto real estate market. Could a Toronto housing crash occur? The renegotiation of the NAFTA deal may be the factor that starts the slide. President Trump’s goal is US jobs and economic health and he’s already stated he wants a better deal with Canada. It makes sense that he would want auto makers and parts manufacturing to be done in the US. The Canadian dairy and lumber industries are just a distraction.
If there was ever a time to sell your home, this is it. Some have sold $1 Million over Asking.
Investment Rentals are Big Money — How About Rental Income Property?
Are you going to buy rental income property as an investment in 2018? Check out cities in the US where there is a much better upside in profit. The US economy and housing market will be the top performer in 2017/18.
What do your realtor and local politicians say is happening in your local market in Toronto, Mississauga, Vaughan, Oakville, and York Region? What’s their forecast? I’d like to know. As we progress to 2018, emotions are going to run high as the critical factors you can read about below become intense. Could the Toronto economy collapse if home prices fall 20% (loss of taxes for governments among other fallout).
Below is an updated look at the March real estate market in the GTA. Recent trends show home prices are rising faster than any experts predicted. Will this be the excuse the government is looking for to upend the market? Or is demand for single detached homes simply too strong?
Government Values at Odds with the People and their Pocketbooks
Are the all too predictable actions of governments in Vancouver and Toronto foretelling what may happen in US markets such as Los Angeles, New York, Miami, and San Francisco? Is the battle over and treatment of land in all major urban areas simply an artificial means of inflating real estate prices or is there actually a land crisis?
If the Ontario government decreases available land for development, drives prices way up causing public furor thereby requiring draconian measures, will it end in a crash in late 2017? Will someone create a crisis to force a crash? We should be asking these questions if we’re investing or buying.
Scarcity of land is the primary driver of high prices in the Toronto real estate market. The biggest threat is unwise government manipulation.
BMO’s senior economist Benjamin Tal said in a Toronto Star report on October 14th, the Ontario Government’s Places to Grow program was primarily responsible for the fast rising prices in the GTA market. He also suggests other red tape factors worsened the situation. Prices in Newmarket, Markham, Mississauga, Richmond Hill, Bradford East Gwillimbury and Aurora have definitly crashed.
If land scarcity is driving prices up, then even a 15% foreign buyers tax and new mortgage rules for millennial buyers may not be enough to cool demand for housing or condos. The real factor may be the next recession, fueled by housing market mismanagement.
Please send this blog post onto your friends and neighbours because they should know as much about the Toronto area forecast factors as possible before they buy or sell. It’s good to be helpful. Mistakes are painful.
What are the Causes of High Home Prices in Toronto?
The major factors that drive housing demand growth to Toronto: immigrant investors, better economy, low interest rates, increasing numbers of buyers in their home home buying years (millennials), and optimism all look on the upswing. As mentioned in the Los Angeles Real Estate forecast post, here are the key factors that affect home prices:
Housing Demand – High overall demand – “all cash bidding wars” in some cases
Housing Supply – Throttled, supply is far from what’s needed
Developable Land – Throttled by government which is the single biggest factor
Builder Red Tape – Builders can’t build even if they have funding – high exposure to financial loss
Mortgage Rates – Continuing Low, especially in light of global economic slackening and with recent tightened lending rules
Down Payment and mortgage rules – these are being tightened this taking some pressure off of the purchase market and re-routing it to the rental market (people have to live somewhere)
Toronto Region Employment – moderate and remaining moderate despite Federal infrastructure
Taxes – rising quickly due to Ontario government and federal government spending
Buyer Income – moderate and not rising much
Home or Condo Prices – High and rising fast – out of reach for most buyers
Demographics – Millennials coming into family and home buying years and must begin to acquire their own living space
Number of Renters – increasing fast because of tight mortgage lending rules
New Home Construction: limited because of Green Spaces Act, but is a source of supply
Economic-Foreign Trade – Canada struggling and Free Trade agreements now being scrutinized because they don’t see to be working like they used to
Taxes on Sale of Home – huge tax burden for those selling in the city of Toronto
Some point to the Ontario government’s Places to Grow intensification plan as the major culprit in skyrocketing single detached home prices. Toronto condo prices haven’t risen like house prices have, yet condo demand is usually not spoken much about. It does look like a growing population want house to live in. A growing millennial family would certainly find it tough to live in highrise condos designed for adult living.
Share this post with your friends and clients. Everyone should know about the housing crisis factors and the economic spinoff from the Toronto Real Estate Market. It’s good and bad, but they should know the factors and help in the solution.
News posts in the Financial Post, Toronto Star, Globe & Mail, CTV, CBC etc, is often based on varied expert opinions and a few isolated market factors. Why don’t we look at all the factors that comprise a realistic Toronto housing market outlook for 2017.
What are the Trends in Toronto Real Estate and New Housing?
I’ve heard a number of convincing arguments for both a bubble and an extended period of growth in new housing development and resale housing price growth in Toronto. And I’ve heard before that money from China has no effect on the market, and from others, that today’s real estate market is driven by Chinese money. The banks and CREA just can’t get their stories straight and the media doesn’t report on how badly their forecasts were off the mark in previous years.
Was it All Driven by Chinese Buyers?
Fully 10% of new condominiums being built in central Toronto are now going to foreign buyers, according to a survey released in April by the Canada Mortgage and Housing Corporation (CMHC); veterans of the city’s rough-and-tumble real estate market believe the vast majority are mainland Chinese investors 10% doesn’t seem like a big number and we’re told that Chinese buyers are only interested in luxury priced properties.
Strangely, CREA is forecasting a marked slowdown in housing start for 2017 to a flat market for Toronto, Mississauga and Vancouver. But they admit the market is still very intense. In fact, in my town, sold over-asking price stickers are on almost every sold sign. There’s not just a few bids on these homes, sometimes there are a lot. It would take a serious economic recession or government action to get rid of all those buyers. Given how troubled our economy still is, in Ontario, it’s unlikely any government would push it into recession.
If you can sell a new house for $600,000 or a Condo for $300,000, why wouldn’t developers be building as many as they can? With economic factors supporting growth, the problem must be political. A quick look at Ontario’s urban intensification plan might show us where the real core of the housing availability crisis and fueling high rent and housing prices.
In a low oil price world, the Toronto and Vancouver economies have benefited and that has to be the key factor. And we haven’t benefited much because manufacturing jobs didn’t come back. In fact, even with the low loonie, jobs still moved to Mexico and China.
Expert Asks; Can You Believe Anything from Anyone Anymore?
We were told by the experts that the boom is only being experienced in Vancouver and Toronto, but the graph below tells a different story. If the US economy picks up, we could see all Canadian cities heating up.
The Usual Suspects? Government
The upcoming jump in downpayment for mortgages will only hurt first time buyers who will still have to rent a condo or home somewhere, if they can afford it. There’s word the BC government may levy taxes against unoccupied homes and they’ve talked about harassing investors (background checks). Of course, BC just levied the 15% foreign buyer tax and caught many unwary buyers offguard, resulting in extra costs of over $100,000 for some. That’s what happens when government starts meddling in markets – they don’t work anymore.
Ontario’s Urban Intensification Act appears to be colliding head on with the Greenbelt expansion plans by intensifying growth near the greenbelt areas and at the same time shrinking available land. Is this a wise move at a time of fragile yet positive economic growth?
Houses for Sale in the Sizzling Hot GTA Market
Housing markets such as Vaughan, York Region, and Central Toronto heated up considerably in 2017 and more people moving to these municipalities. No one looked at Aurora real estate in past years, but new housing developments, great lifestyle, along with a very limited supply of land within the town means speculators will be jumping on the bandwagon. Days on market for Aurora homes was down to 10 last spring — only Oshawa homes sold that fast, and for over asking price.
Homebuyers are willing to look beyond the green spaces belt, but they’ll look at Aurora, Bradford, Stouffville, and Newmarket first before heading north. The pressure from Toronto, Chinese, and Mississauga buyers should put much upward pressure on these regions.
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