Market Update

Market Watch - March 2019

TORONTO, ONTARIO, April 3, 2019 – Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported 7,187 residential sales through TREB’s MLS® System in March 2019. This result was inline with 7,188 sales reported in March 2018. For the first quarter of 2019, sales were down by one per cent compared to Q1 2018.

While March and Q1 sales remained relatively flat compared to last year, new listings have declined more so than sales. March new listings were down by 5.1 per cent year-over-year and Q1 new listings were down by 1.5 per cent.

“The OSFI stress test continues to impact home buyers’ ability to qualify for a mortgage. TREB is still arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed. The supply of listings in the GTA also remains a problem. Bringing a greater diversity of ownership and rental housing online, including ‘missing middle’ home types, should be a priority of all levels of government. TREB is happy to be taking part in the City of Toronto’s consultations for the Housing TO – 2020-2030 Action Plan, and will certainly be raising the supply issue during these discussions,” said Mr. Bhaura.

“While the City of Toronto’s recently announced Housing TO – 2020-2030 Action Plan is exciting and commendable and TREB looks forward to contributing solutions as a Member of the External Advisory Committee, the recently proposed increase to the Municipal Land Transfer Tax on higher priced properties is problematic. As the recent City budget process showed, the MLTT is not a sustainable revenue source from which to fund municipal programs. On top of this, additional MLTT on higher priced homes could have a trickle-down effect on the supply of homes throughout the housing price continuum,” said TREB CEO John Di Michele.

The MLS® Home Price Index Composite Benchmark was up by 2.6 per cent year-over-year in March, while the average price for March sales was up by a lesser annual rate of 0.5 per cent to $788,335. The average selling price for Q1 2019 was up by 1.1 per cent year-over-year.

“Market conditions have remained tight enough to support a moderate pace of price growth. Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has also receded. This means that in many neighbourhoods throughout the GTA, we continue to see competition between buyers for available listings, which provides a level of support for home prices,” said Jason Mercer, TREB’s Chief Market Analyst.

Market Watch - February 2019

Greater Toronto, March 5, 2019 – Toronto Real Estate Board President Gurcharan (Garry) Bhaura announced that Greater Toronto Area REALTORS® reported 5,025 homes sold through TREB’s MLS® System in February 2019. This sales total was down by 2.4 per cent on a year- over-year basis. Sales were also down compared to January 2019 following preliminary seasonal adjustment.

“The OSFI mandated mortgage stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy. The stress test should be reviewed and consideration should be given to bringing back 30 year amortizations for federally insured mortgages. There is a federal budget and election on the horizon. It will be interesting to see what policy measures are announced to help with home ownership affordability,” said Mr. Bhaura.

Despite sales being down year-over-year, new listings actually declined by a greater annual rate. This suggests that market conditions became tighter compared to last year. Tighter market conditions continued to support year-over-year average price growth.

Both the MLS® Home Price Index Composite Benchmark and the average selling price were up modestly on a year-over-year basis in February 2019. The MLS® HPI Composite Benchmark was up by 2.4 per cent year-over-year. The average selling price for all home types combined was up by 1.6 per cent over the same period. Price growth was driven by the condominium apartment segment and higher density low-rise home types. On a preliminary seasonally adjusted basis the average selling price was down compared to January 2019.

“Home sales reported through TREB’s MLS® System have a substantial impact on the Canadian economy. A study conducted by Altus for TREB found that, on average, each home sale reported through TREB resulted in $68,000 in spin-off expenditures accruing to the economy. With sales substantially lower than the 2016 record peak over the last two years, we have experienced a hit to the economy in the billions of dollars, in the GTA alone. This hit has also translated into lower government revenues and, if sustained, could impact the employment picture as well,” said Jason Mercer, TREB’s Director of Market Analysis and Service Channels.

Real Estate Sold Prices Made Public

In a historical move, the Supreme Court of Canada has refused to hear an appeal from the country’s largest real estate board. Up until this week, the Toronto Real Estate Board (TREB) has had a ban on publishing real estate numbers and home sales data online.

Beginning the fight in 2011, the TREB appealed the Competition Bureau’s request to have said data published, claiming publication would violate individual consumers’ privacy and copyright. The battle originally started with TREB taking it to the Competition Tribunal and later the Federal Court of Appeal. When both of these organizations sided with the Competition Bureau, the TREB went to the Supreme Court.

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It didn’t end well for the TREB however, an organization that represents more than 50,000 agents across Ontario. On August 23rd, the court refused to hear the case, and dismissed it, ending a battle that has carried on for several years.

The move was significant, because it likely marks the end of the road for TREB’s efforts to prevent the data from being published, and now paves the way for increased transparency in the housing market. More than that though, it sets a precedent for other real estate boards.

Queen’s University professor, John Andrew, denotes that “a lot of local real estate boards were waiting to see what happened with this decision,” and now that it is known, the outcome will impact other boards across Canada. Boards, indicates Andrew, will “no longer try to resist this kind of demand from their own members,” affording individual agents and firms the opportunity to publish and release this kind of information should they choose to.

And for consumers, the choice is beneficial as well. With an increased level of transparency and honesty towards housing prices, sales figures, and market trends, future buyers and sellers can have a more accurate picture of the market and where it is and where it is going. This bodes well for individuals in the throes of deciding to sell or buy, as well as those with investment properties that may or may not be having the revenue turnover they expect.

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Dubbed as a ‘hugely important’ real estate data battle, experts predict that realtors will at quickly, with large numbers of agents posting data in the next 60 days, as required by the Competition Tribunals order. This will mean buyers and sellers have access to the information and can educate themselves on how to best price their home, how to negotiate through sale prices and what buyers should be expecting to pay.

While up until now, consumers would require the services of an agent or broker who could access the Multiple Listing Service database for relevant selling and buying information, this move by the Supreme Court opens up a level playing field for agents and buyers. And while some agents are concerned that consumers having access to this information will jeopardize the need for an agent, I disagree.

And RE/MAX director Christopher Alexander concurs: “good, experienced realtors are a lot more valuable” than simply the information itself.

If you want to learn more about how this decision impacts you as a buyer, seller or home owner, please reach out to me. I would love to help and offer further insight or answer your questions.