January Housing Numbers

The table was set. Bad housing news had been pouring in for weeks. First, we learned that national home prices were down 5% in 2018, then new build sales in the GTA were way down and finally Vancouver’s housing data proved the city is in a full housing recession. All that was left was for TREB’s January housing information to show Toronto was also caught up in the housing downturn and the bubble had officially popped. Instead, Toronto showed its market still had some life. As our analysis will show, many warning signs remain from the January data, but overall, Toronto’s market managed to hold on for another month.

Perhaps the most interesting stat from the January information was how the sales were divided. The city of Toronto saw sales drop 6% year-over-year, while the rest of TREB saw sales increase 3.5%. The balance meant that total sales increased by 22 (4,009 to 3,987) over January 2018; however, this did shift the position of the stronger sales performer from the city to the suburbs.

Prices were interesting, as they offered mixed results across TREB and depending on whether you were looking at average prices or the benchmark price. The average price of a home increased by 1.7% to $748,328; however, this gain was not realized by all regions and housing types. The average price of a detached home fell 3% year-over-year, with Toronto leading the way with a 9% drop. Whereas the average condo price was up 8%, despite Halton region condos falling 1%.

The benchmark composite price was up 2.7% to $761,800. In comparison though, the benchmark price for a detached house was essentially flat for TREB as a whole (falling 0.04%), with the regions ranging from 3% gains in Halton to 5% losses in York. But in the condo market, despite an 8% gain by TREB, Halton saw a 5% decrease while Peel led the way with 13% benchmark price gains.

Jan Condo S2NLSource: TREB, Six Housing Sense

For indications as to where the market may be heading for the rest of the year, the most important information came from the sales to new listings and active listings ratios. For the first time since January 2016, Toronto’s condo market saw a sales to new listings ratio fall below 50%, granted it was 49%. As a one off, this does not hold much weight; however, given that the ratio has not fallen below 55% in the last three years it is worth wondering if condo inventory levels will start to rise moving forward.

Jan det S2ALSource: TREB, Six Housing Sense

In Toronto’s detached market, the sales to active listings ratio held for the second straight month at the low mark of 26%. Since 2013, the ratio has only been below 30% on four occasions, and three of those have been in the past five months. The other month was July 2017, as the market was flooded with inventory following the massive price gains of that spring. Unlike the one off in the condo market, this ratio is starting to show a trend in Toronto’s detached market where inventory is building, and sales are not keeping pace.

As mentioned at the beginning of this article, if you were hoping January’s housing data would show that the GTA is joining the nation’s housing struggles, you did not get your wish. However, there are warning signs that need to be monitored. Sales levels did hold, but they held against a very weak January 2018. Prices did improve marginally, but they too improved over a comparison still below the peak prices of 2017. And inventory levels are growing, but slowly. As 2019 unfolds, there will be many important things to track to understand where the market may head. The finance minister announcing a review of the 25 year amortize period has only added to that mix.

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