E.B.Dungey Realty Ltd. Brokerage

TORONTO, January 30, 2018 —
The Toronto Real Estate Board will release its annual Market Year in Review Outlook Report today at the Board’s Economic Summit.

This report captures statistics recorded through TREB’s MLS® System for 2017 and provides a market outlook for 2018, as well results from Ipsos consumer surveys and an economic impact analysis conducted by Altus. This information will help readers better understand our marketplace and the policy issues that inform it. Specifically, this edition focuses on questions of transportation and housing diversity in the broader Greater Golden Horseshoe Region and also shares some new research on how the real estate industry contributes to our economic engine.

Economic Impact

“On average, each residential transaction reported through TREB’s MLS® System in the GTA generates $68,275 in spin-off expenditures, according to recent analysis conducted by Altus Group. The real estate industry is a key contributor to our economy, with total annual spin-off expenditures close to $7 billion.  From the economic impact of TREB MLS® System transactions, to government revenues associated with residential sales, to the impact of the new construction sector, this new Altus research included in this report highlights the depth to which transactions involving GTA REALTORS positively impact our economy,” said TREB President Tim Syrianos.

2017 Year in Review

In 2017, annual residential sales were down compared to the record level set in 2016.  Total sales reported through TREB’s MLS® System amounted to 92,394 – down by 18 per cent compared to over 113,000 transactions in 2016.

Record sales in Q1 2017 were followed by a decline in Q2 and Q3 after the Ontario Fair Housing Plan (FHP) announcement and the associated psychological impacts.  The pace of sales picked up in Q4, as the impact of the FHP started to wane and some buyers arguably brought forward their home purchase in response to the new Office of the Superintendent of Financial Institutions (OSFI) stress test guidelines effective January 1, 2018.

Home prices and home price growth also differed throughout 2017.  Year-over-year average price growth of over 30 per cent was reported in the first quarter.  This was arguably one of the triggers that prompted the announcement of the FHP. Following the onset of the FHP, sales declining and listings increasing, market conditions started to balance out, with the annual rate of price growth moderating in the second half of the year.

The calendar year 2017 average selling price was up by 12.7 per cent annually to $822,681.  Although annual growth in the average price was generally positive on a year-over-basis throughout the year, the overall annual rate of growth was underpinned by pre-FHP transactions.

2018 Outlook

Looking forward, the forecast range for TREB MLS® sales in 2018 is between 85,000 and 95,000. The midpoint of this range suggests an annual sales count slightly lower than the 2017 total.  It is anticipated that year-over-year declines will be more pronounced in the first four months of 2018, as comparisons are made to the record pace of sales at the beginning of 2017.  Conversely, sales are expected to be up on a year-over-year basis as we move through the late spring and summer months.

Ipsos polling of intending buyers supports a flatter sales trend in 2018, with buying intentions lower compared to a year ago.  Of particular note is the dip in first-time buying intentions over the past year.  There remains a degree of uncertainty in the marketplace due to the psychological impact of the Ontario Fair Housing Plan and changes to mortgage lending guidelines.  First-time buyers are flexible – they can continue to rent or live with family, for example, while they decide when, where and what type of home they intend to purchase.

Changes to mortgage lending guidelines, including the OSFI-mandated stress test, will affect home buyers.  The Ipsos survey of intending buyers found that 26 per cent of intending buyers felt that they wouldn’t qualify for a mortgage two percentage points higher than the current market rate on their home of choice.  However, in response to the stress test, many intending buyers will change the type and/or location of home they are looking to purchase or potentially tap other down payment sources, rather than simply deciding not to purchase a home.

The forecast range for the average selling price in 2018 is between $800,000 and 850,000.  The midpoint of that range suggests a slight increase in the average selling price this year.  Similar to sales, year-over-year declines in the average selling price will likely be reported in some months during the first half of the year, as comparisons are made to the high price levels reported at the beginning of 2017.  During the second half of 2018, annual rates of price growth will be in the mid-single digits, with enough competition between buyers to see rates of growth above the rate of inflation.

The pace of home price growth will not be uniform across market segments in 2018.  Expect tight market conditions for condominium apartments to underpin continued double-digit rates of price growth in this market segment.  Conversely, the pace of growth for more expensive detached homes will be less brisk.

“Fundamental demand drivers promoting housing demand will remain in place in 2018, including immigration-driven population growth, job creation and low unemployment across a diversity of economic sectors.  However, we must be cognizant of the fact that, in the short term, higher borrowing costs and the effects of federal and provincial policy decisions will act as a drag on demand for ownership housing.  It is also probable that provincial rent control legislation will stunt the supply of available rental units, resulting in a continuation of average rent growth well-above the rate of inflation,” said Jason Mercer, TREB’s Director of Market Analysis.

Housing and Transportation Diversity Research

In addition to analyzing how market fundamentals influence demand, supply, and price growth, the report also includes several sections with new research focused on improving our regional transportation network. Studies from the C.D. Howe Institute and the Toronto Region Board of Trade, as well as submissions from government policymakers, including Toronto Mayor John  Tory and other GTA Regional Chairs and mayors, all serve to identify the main issues with, and present innovative, evidence-based approaches to, solving these problems.

“The transportation infrastructure in the Greater Golden Horseshoe needs improvement, especially if we’re to keep up with the demographic changes that continue to shape our region. This report is full of evidence-based research and data that can help to serve as the basis for implementing innovative and practical solutions to many of the transportation and transportation infrastructure problems we face today, which is critical, because waiting to solve these issues is not an option,” said TREB CEO John DiMichele. 

The report also features sections on the New Homes and Commercial market segments, and presents exciting research on the “Missing Middle” in housing from the Canadian Centre for Economic Analysis (CANCEA), which seeks to provide a new solution to address ongoing housing supply pressures in the region.

The complete report will be released publicly at 12:00 p.m. on January 30, 2018 on TREBhome.com.

Article source: http://www.trebhome.com/market_news/release_market_updates/news2018/nr_outlook_report_2018.htm

TORONTO, January 22, 2018 — Toronto Real Estate Board President Tim Syrianos announced that average rents for one-bedroom and two-bedroom condominium apartment rents were up very strongly on a year-over-year basis in the fourth quarter of 2017, based on transactions reported by Greater Toronto REALTORS® through TREB’s MLS® System.

The average rent for one-bedroom condominium apartments in the TREB market area was up by 10.9 per cent on an annual basis to $1,970 in Q4 2017. The average two-bedroom condominium apartment rent was up by 8.8 per cent over the same period to $2,627.

“As the population in the GTA continues to grow, so too does the demand for rental accommodation. The problem is that rental supply has not kept up with the increase in demand in recent years. The result has been low vacancy rates and intense competition between renters for available units. This competition has underpinned very strong growth in average rents,” said Mr. Syrianos.

The number of condominium apartments listed during the fourth quarter was down by 3.4 per cent compared to Q4 2016. The number of units leased was down by 0.7 per cent. Because the vacancy rate was less than one per cent for condominium apartments in the fall of 2017, a dip in the number of apartments listed for rent translated through into a dip in the number of lease agreements signed.

“Looking forward, we continue to have concerns that rent control legislation announced in conjunction with the Ontario Fair Housing Plan will preclude additional rental supply coming on stream, both in the purpose-built and investor-held condominium apartment segments. Going further, it is possible that current owners of condominium apartments could choose to list their units for sale to take advantage of recent price gains rather than rent their units to tenants under the new rent control regime,” said Jason Mercer, TREB’s Director of Market Analysis.

Article source: http://www.trebhome.com/market_news/release_market_updates/news2017/nr_rental_report_Q4-2017.htm

TORONTO, January 22, 2018 — Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 5,773 condominium apartment sales through TREB’s MLS® System in the fourth quarter of 2017.  This result was down by 15.4 per cent compared to the last three months of 2016.

Over the same period, new condominium apartment listings were up by 9.8 per cent to 8,186.  While sales were down relative to listings, market conditions still remained tight, with a sales-to-new listings ratio of 70 per cent.

“Demand for condominium apartments remained strong relative to listings in the fourth quarter.  Even with the uptick in listings, which was certainly welcome, there was enough competition between buyers to prompt double-digit annual rates of price growth.  This points to the fact that we still do have a supply problem in the GTA that needs to be addressed to ensure the long term sustainability of the marketplace,” said Mr. Syrianos.

The average selling price for condominium apartments was up by 17.9 per cent year-over-year in the fourth quarter to $515,816.  While this annual rate of growth was down from earlier in 2017, the condominium apartment segment was still the leader in terms of price growth in the second half of the year.

“Seller’s market conditions remained in place for the condominium apartment market segment in the fourth quarter.  Based on price point, this housing type remains top of mind for many first-time buyers.  In addition, as home prices have grown year-over-year some buyers who initially may have considered the purchase of a low-rise home have chosen to purchase a condo apartment as well,” said Jason Mercer, TREB’s Director of Market Analysis.

Article source: http://www.trebhome.com/market_news/release_market_updates/news2017/nr_condo_report_Q4-2017.htm

TORONTO, January 4, 2018 — Toronto Real Estate Board President Tim Syrianos announced commercial leasing and sales statistics reported through TREB’s MLS® System for the fourth quarter of 2017.

TREB Commercial Network Members reported 5,985,841 square feet of combined industrial, commercial/retail and office space leased through TREB’s MLS® System.  This result was up from 5,824,485 square feet leased during the last three months of 2016.

The great majority of leased square footage was accounted for by the industrial market segment, at 75 per cent of the total, or approximately 4.5 million square feet.  This result was down slightly compared to Q4 2016.

Average lease rates reported on a per square foot net basis for transactions with pricing disclosed were up for all major market segments.  The average industrial and commercial/retail lease rates remained at similar levels to last year, whereas the average office lease rate was up by a more substantial annual rate.  Much of the growth in the office lease rate was accounted for by a different mix of space leasing in larger size categories compared to 2016.

“The fact that Q4 2017 leasing activity was up compared to last year is a positive sign and is in line with the consensus view that economic growth in Canada will remain relatively strong in the coming year with business investment intentions remaining positive.   Businesses take on new space when they are confident that their business will expand in the future,” said Mr. Syrianos.

Combined industrial, commercial/retail and office sales reported by TREB Commercial Network Members amounted to 211 in Q4 2017 – down from a total of 366 sales reported in Q4 2016. Average sale prices on a per square foot basis for transactions with pricing disclosed were up for the industrial and office market segments and down for the commercial/retail segment.  Year-over-year changes in selling prices were due to both market conditions and changes in the mix of properties sold.  For office properties in particular, a change in the mix of properties sold between Q4 2016 and Q4 2017 was a major factor.

Article source: http://www.trebhome.com/market_news/release_market_updates/news2017/nr_comm_watch_1217.htm