17 December 2018

CREA believes this year’s prices decline was caused by a 2.6% annual drop in Ontario as fewer expensive properties were listed in Toronto, especially in spring when prices tend to go up sharply.

In case of Toronto, the drop in prices was particularly noticeable, as the real estate market in Canada’s largest city was unusually strong last year.

For example, the housing market in Ontario’s medium-sized cities kept showing strong activity, with London and Windsor reporting double-digit gains in 2018. Meanwhile, smaller cities in Ontario, Quebec and Maritimes saw price gains of a healthy balanced market.

In a separate report, CREA said that home sales showed a third consecutive monthly decline in November, as the Greater Toronto Area and the Greater Vancouver Area saw weaker activity.

Home sales through MLS were down by 2.3% in November compared to the previous month, with the number of transactions dropping in more than half of all the local markets.

The average home price fell by 2.9% annually and reached $488,000. If we exclude the Greater Toronto Area and the Greater Vancouver area, the price will be below $378,000.

“The deterioration of housing affordability, caused by the new mortgage stress test, still hasn’t been solved,” – noted Gregory Klump, CREA’s chief economist.

“In spite of supportive economic and demographic fundamentals, the national home sales started going down. Although home sales were expected to rebound following a sharp activity decline, caused by the new stress test, it seems the rebound took its own turn”.