Greater Toronto Area home prices dropped 12.4 per cent to an average selling price of $767,818 this February from February 2017, according to the Toronto Real Estate Board (TREB).
Prices likely peaked in February 2017, as home prices are still up 12 per cent from two years ago, in February 2016.
Detached houses have seen the biggest decline at 17.2 per cent and are now going for an average of just over a million at $1,00,736. Condos, on the other hand, are bucking the trend and have climbed 10.1 per cent to $529,782.
The difference in demand between condos and detached houses for sale in Toronto is likely one of affordability. Most prospective home buyers either can’t stomach paying over $1 million for a detached house in a market where they are still highly unlikely to get their first choice, or can’t pass the new OSFI stress test.
The new OSFI stress test which tightened mortgage lending rules starting January 1, has also made it tougher for many buyers to qualify. To borrow, buyers now have to earn income that can support a monthly mortgage rate of at least 5.45 per cent. That’s extremely difficult for many, and especially so for first-time and single-income potential buyers.
As a result, lower-priced Toronto condos, are expected to continue their rise into the busier spring and summer months.
The fate of detached housing is uncertain, as buyers and sellers remain cautious.
This caution is demonstrated as all properties are taking almost twice as long to sell. The average time it takes a property to sell is 25 days, compared to last year’s 13.
Still, as long demand remains high and supply low, so it’s highly likely that prices will rise.
Inventory, although higher than last year’s record low, is still tight. New listings totalled 10,520 in February, compared to 9,801 last year. Active listings increased a whopping 147.4 per cent, from 13,362 from 5,400. Despite its increase to levels not seen since 2012, is still far, far below demand and thus will do little to ease pressure on prospective buyers.
Check out the infographic and draw your own conclusions:
About the Author: Zoocasa.com is a leading real estate resource that combines online search tools and a full-service brokerage to help Canadians to buy or sell their homes faster and more successfully. Home buyers can browse condos, houses and townhouses for sale on the website or the free mobile app.