2018 Mid-Year GTA Market Update
Finally! The reports of “Sales Down 22-44%!” are over. June marks the month where GTA sales and average resale price are actually higher from this time last year. The increases are moderate but great for the fact that it indicates the market has been mostly consistent and balanced for 2018.
It’s funny. Barring anything to impact the market out of the ordinary, if this pace is kept for the next couple months, the year-over-year numbers will indicate quite a significant % increase from 2017. In reality, 2018 has been largely consistent but I eagerly await to see what will happen if the media mass reports the pendulum swing in the other direction. If the media reports next month that “Sales and average price up x% from July 2017”, will that spark another frenzy by playing with buyer and seller psychology again? Perhaps. It was the same sources that I largely blame for the “crash” last year. The overuse of the word “crash” itself caused people to react when the biggest factor to spark the media attention, the Fair Housing Plan, actually had little effect on the market. It was the misinterpretation and fear that caused such a significant impact. If the opposite is reported next month, could it ignite the now stable and healthy market? Possibly, but hopefully not.
2018 Mid-Year Review
If you follow this chart, you’ll see that sales and prices for 2018 (Orange) are moderately increasing. 2017 (Yellow) is behind us and largely irrelevant but will always be used for comparison sake.
If the 2018 Sales continue to increase at this same rate, there will be a significant increase from the 2017 figure and that is what could grab the media attention. We’ve had slow and stable growth this year, with wild figures reported (44% drop, 34% drop, 22% drop- last 3 months) when compared to the anomaly that was 2017. It is these numbers that usually grab media headlines and start conversations. If sales continue to increase at this same, stable rate, July numbers could indicate around a 20% increase, possibly higher. This should not have any impact or elicit any drastic changes but if it is misinterpreted again, there is a possibility of people thinking the market is super hot again and it could ramp things up a bit.
The average resale price has also surpassed 2017 for the first time. This does not mean that prices are higher than the peak of 2017. It’s still quite far under the peak prices in April. It does, however, show more stability in the market as prices have grown modestly month over month since December 2017. Hopefully everything stays on pace and we can enjoy a balanced market for a while longer.
Now the variables…
These are the same as always. There will forever be external factors that could impact our market. Nothing has yet to come from Premier Doug Ford on his plans to address housing. The trade war saga still exists between the States and Canada and the mortgage stress test is still in full effect. Last I’ve heard, there is a 50/50 chance interest rates will increase in July so we’ll just have to wait and see how everything plays out.
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