Sales plummeted 35 per cent to 5,175 properties sold this February in the Greater Toronto Area from last February’s peak of 7,955, according to the Toronto Real Estate Board (TREB).
Detached houses saw over a 40-per-cent decline in sales, with condos just over 30 per cent. Semi-detached and townhouses each declined over 25 per cent.
Last April, the Ontario provincial government, concerned over wild demand and record-breaking real estate prices, introduced the Fair Housing Plan, which included 16 measures designed to cool the housing market. Soon after, OSFI, the federal bank regulator, concerned homeowners were overextending themselves, tightened mortgage lending rules, starting this January 1.
“When TREB released its Outlook for 2018, the forecast anticipated a slow start to the year compared to the historically high sales count reported in the winter and early spring of 2017. Prospective home buyers are still coming to terms with the psychological impact of the Fair Housing Plan, and some have also had to reevaluate their plans due to the new OSFI-mandated mortgage stress test guidelines and generally higher borrowing costs,” says Tim Syrianos, president of TREB.
The two actions combined appeared to have succeeded in slowing the housing market.
Sellers, previously sitting on property, got nervous and began listing. Hence the increased amount of Toronto homes for sale. February saw 10,520 new listings, a 7.3 per cent increase from the 9,801 new listings last year.
Prospective buyers also got nervous and are likely waiting to see what happens to the housing market.
Despite falling sales, GTA properties remain expensive. Properties are still up on average 12 per cent to $767, 818 from 2016, although they have fallen from their peak of early 2017. Condos, in fact, are the only market segment which has increased in price from 2017.
Detached Toronto houses still stand at an average price of just over $1 million, while condos are now at over half a million, at $529,782.
We should see more affordable market segments, like Toronto condos and townhouses continue to show the strongest sales and price growth as we head into the busy spring and summer months.
Check out the infographic below to see the details:
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