2018 was always going to be an interesting year for the GTA housing market. The beginning of the year would be competing against the massive price gains of early 2017, while the second half of the year would be compared to lower prices and lower sales. Then there was the conflicting sector performances of detached homes and condos. Condos lost a little bit of ground during the summer months of 2017 but came right back to life in the fall. On the other hand, the detach market limped into 2018 and it was hard to forecast what might happen next. Coupled with the new stress test, all of these factors set the stage for an interesting year ahead.
The predictions for 2018 were planned according to 2017’s performance. The market would show poorly in relation to the first five months of 2017 but make up ground during the remainder of the year. The thought was that by the end of 2018, sales would be just under the previous year’s total, while prices would gain comfortably in the single digits. How 2018 actually played out had elements of these predictions, but not all of them, and not equally across all sectors.
|Price Comparison||2017||2018||% Percentage Change|
Source: TREB, Six Housing Sense
Starting with prices, the benchmark composite price for Toronto ended the year 6% higher than its 2017 close, while the GTA only increased by 3%. The suburbs saw a range of performances from an average 4% growth throughout Halton to a 3% loss in York Region. Toronto’s 6% overall price gain hid the conflicting performances seen between the housing sectors in the city. The benchmark price for a detached house increased by just 1% (less than inflation); however, condos continued their successful run increasing by 10%.
Sales down 13%, New Listings down 12%
By the end of 2017, TREB had seen total sales drop nearly 20% from the peak sales achieved the year before. The forecast for 2018 was a small slip in sales from the 2017 numbers; however, what happened instead was a drop of another 13% and the worst sales numbers in a decade. This coupled with the final month of the year seeing sales drop by 23% year-over-year, was not the annual performance the industry was looking for. The saving grace to the low sales was almost equally low new listings. New listings dropped by 12% year-over-year, which helped to maintain similar active listing totals in the GTA, and thus, keep prices stable.
Sales by Population
Source: TREB, Six Housing Sense
Further dissecting the sales total, we see that while 2018 had the lowest annual sales since 2008, if we adjust for population size, it had the lowest sales total since 2000. Sales per 1,000 people in the GTA plateaued in 2016 at 18 and has since fallen to just 12. Sales by population has not been this low since 2000, when the GTA saw only 58,343 total sales.
Following the wild ride that 2017 brought to the Toronto housing market, it can be said that 2018 offered far greater stability, as well as the rise of the condo market as the top performing sector. However, it also continued the downward trend of slowing sales, and offered little hope that 2019 would correct that. Considering this, the 2018 market can not truly be called a success, but it was far from a failure. Certainly anyone in the condo market should have been happy, even if Toronto’s detached home owners were frustrated and the suburbs stalled.
Moving into the new year, the relationship between sales and prices will be the trend to watch. Can prices continue to hold while sales decline or will the two stats begin to move in parallel?