6 March 2018

Home prices were still 12% higher than in February 2016 when the average cost reached $685,278. It also exceeded January’s average of $736,783 by a 4.1%.

Such a weak beginning of the year wasn’t unexpected for TREB, as it predicted this change after the abnormally high activity in the first four months of 2017. Last April, we saw housing prices reaching the average level of $920,791 and exceeding the previous year’s results by 24.5%.

Since that moment, home sales have been declining because the Ontario government introduced Fair Housing Policy with a foreign buyers tax, aimed at cooling the market, says Jason Mercer, TREB director of market analysis. Prices started falling some time later with the first drop reported only in November.

“Prices will likely go up in spring and later in summer,” – he noted.

“The deal is that when sales go down like these days, it hides the issue of a restrained market supply in the GTA. But when the demand recovers, and it will definitely happen, we’ll still have to deal with the lack of supply in certain segments of the market,” – Mercer added.

It’s already quite obvious in case of the condo market where sales fell by 31% annually last month, but prices went up by 10% to $529,782.

Meanwhile, downtown homes are selling very quickly. For instance, a house was listed on Monday for about $995,000, and it received eight offers. In the end, it was sold for about $230,000 over the asking price.

There’s a different situation in Newmarket and Aurora where sellers are still facing weak demand.