After a tumultuous 2018, the Toronto residential market is expected to encounter notable improvements in activity and housing value this year, according to the Toronto Real Estate Board’s 4th annual Market Year in Review and Outlook report.
“Although we won’t experience record levels, we do expect to see a better year in 2019 for sales and selling prices,” TREB president Garry Bhaura stated.
A large part of the predicted upticks will stem from the increased number of consumers intending to buy homes in Toronto.
“Many buyers who moved to the sidelines over the past year due to various government policies, including the OSFI-mandated mortgage stress test, have re-evaluated their positioning in the marketplace vis-à-vis home type, location and price point,” Bhaura noted.
Total sales volume is forecast to increase from last year’s 77,375 transactions to 83,000 deals completed in 2019. Aside from increased home-buying intentions, the growth will also be impelled by healthy employment numbers, lower average fixed-rate borrowing costs, and sustained population growth.
Prices are predicted to continue the moderate growth trend established in the second half of 2018, the TREB said. The median sales price in the GTA will reach $820,000, up from the average of $787,195 in 2018 and veering closer to 2017’s record highs.
“The condominium apartment market segment will continue to be the driver of price growth, whereas average detached home price growth will be below the average growth rate for the market as a whole,” the TREB added.
The sustained impact of the federal-level regulatory changes in recent years, especially the B-20 mandated stress testing, is expected to dominate the Toronto housing conversation this year.
“Even though we’re seeing positive government action on a number of key housing files, one area that needs to be revisited is the imposition of the OSFI-mandated two percentage point mortgage stress test,” TREB CEO John DiMichele stressed. “While we saw buyers return to the market in the second half of 2018, we have to have an honest discussion on whether or not today’s home buyers are being stress tested against rates that are realistic.”
“Home sales in the GTA, and Canada more broadly, play a huge role in economic growth, job creation and government revenues every year. Looking through this lens, policymakers need to be aware of unintended consequences the stress test could have on the housing market and broader economy.”
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