It may be a good time to buy a detached house in Toronto, especially if you’re a prospective buyer who has been waiting on the sidelines for the right opportunity.
On top of the recent mortgage rate cut, detached houses sank 9.1% in the City of Toronto to $1,227,301 this July year over year, and 2.5% in the 905 to $929,633, according to the Toronto Real Estate Board (TREB). Toronto likely showed a bigger drop than the 905 because suburbs already took a nosedive last year and is close to bottoming out.
“The single-detached market segment, which has arguably been impacted most by the OSFI stress test, has experienced a slower pace of price growth, with average detached prices remaining lower than last year’s levels in some parts of the GTA,” TREB says.
Detached houses, especially those over $2 million dollars, are simply not selling like they used to. Buyers either can no longer borrow enough to cover the price of these huge mortgages, or they simply want to wait to see what happens to the market over the next few years.
Sellers of single-family homes are routinely forced to now lower their listing price, whereas two years ago they would have had multiple offers to choose from.
But areas in which detached houses remain under the $1 million mark are still posting some gains. Milton homes for sale, for example, increased 4.6% year over year to $905,180 while houses for sale in Oshawa increased 2.4% to $548,156.
In contrast, condos are selling like wildfire. These far more affordable property types have become the de-facto “starter homes” for millennials and are driving the entirety of the (3.2%) price growth we’re seeing across TREB.
Units rose 7.7% year over year to $627,927 in the City and 3.2% in the rest of TREB’s region to $476,445.
“Broadly speaking, increased competition between buyers for available properties has resulted in relatively strong price growth above the rate of inflation for semi-detached houses, townhouses and condominium apartments,” TREB says.
But the first choice for most buyers is, or will eventually be, a single-family home. The question is, will detached homes continue to drop, or will waiting price buyers out of the market? Buyers must decide for themselves.
Want to see more data on the July Toronto housing market? Check out the infographic below.
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