Against a backdrop of sliding home sales in the Greater Toronto Area (GTA), the average price of detached homes continued to rise in 40% of Toronto Real Estate Board (TREB) districts in the second quarter of 2017. We examined 65 neighbourhoods in the Greater Toronto Area in the first six months of the year, comparing first quarter performance to that in the second quarter.
So what did the numbers tell us?
Statistics show that affordability played a significant role in price growth, with half of TREB districts in the 905 reporting an upswing in the average price of a detached home in the second quarter, compared to the first quarter of 2017, while just over 34% of communities in the 416 experienced an increase. The vast majority of upward trending markets in the 905 were priced under $1,000,000, while in the 416 area code, increases were reported at price points ranging from under $1 million to over $4 million.
“Homebuying activity in the GTA has been a tale of two markets– a tight, record-breaking first quarter and a softer second quarter, characterized by easing sales and overall average price — a result of the introduction of the provincial government’s Fair Housing Plan,” says Christopher Alexander, Regional Director, RE/MAX INTEGRA, Ontario-Atlantic Region.
“The first quarter of 2017 shattered all existing TREB records for Q1 dating back to 2007, with over 25,000 residential unit sales reported, an increase of 12 per cent over Q1 of the previous year, and average price appreciation of 29 per cent during the same time period. Given current conditions, it’s really quite remarkable that, against the unprecedented strength of the first quarter, we still saw 40% of GTA neighbourhoods outperform Q1 price appreciation. ”
The top 5 communities that saw the greatest increases in average price of a detached home were:
- Brock, with an 11.73% upswing between first and second quarters ($562,711 vs. $503,630)
- Caledon is up 8.61% over the first quarter, rising from $1,037,997 to $1,127,414
- Halton Hills climbed 7.75% to $841,155 in the second quarter, up over the $780,644 reported in Q1.
- Riverdale, Greenwood-Coxwell, Blake-Jones (E01), rising 7.59 per cent to $1,298,439
- Dovercourt-Wallace Emerson – Junction, Junction Area, High Park North, Runnymede-Bloor West Village, and Lambton-Baby Point (W02) appreciated 6.91 per cent to $1,390,342, up from $1,300,518 in the first quarter
Click the heat map below to enlarge!
“The resilience in housing values may help to explain why homes sell faster here than in any other Canadian centre,” says Alexander, noting that days on market in the GTA sat at 15 in June, a figure on par with healthy year-ago levels. “The current lull may represent the best buying opportunity in recent years, with more than 19,000 properties available for sale. Buyers waiting on the sidelines for a better deal may not find it in the GTA’s hot pocket areas, but they may come across attractive options in neighbouring communities.”
Demand for homes in the third quarter will likely reflect the softening that typically occurs over the summer months, followed by renewed strength in the final quarter of the year.
“As stability returns to the market, strong underlying economic fundamentals in the Greater Toronto Area and the province of Ontario are predicted to bolster activity, particularly in Q4,” says Alexander. “Unemployment in the GTA hovers at 6.8 per cent, corporate profits are up, with more employers investing in new equipment and hires, and consumer confidence is rising, albeit slowly. The slight uptick in interest rates may also propel some buyers into the market in anticipation of higher rates down the road.”
Density will also play a key role in the GTA moving forward, explains Alexander. “As long as development of single-family homes is stifled, solid demand will exist for this type of product, keeping the outlook for price growth on an upward trajectory.”