Toronto home prices rise for third straight month, showing signs of rebound
House prices in the Toronto area continued to show signs of stabilizing in March, fuelling predictions the city will see stronger growth in the second half of 2018.
The Toronto Real Estate Board (TREB) said the average home in the Greater Toronto Area sold for $784,558 in March, down 14 per cent from record levels in March last year prior to a steep drop that began last May.
However, the average sales price in March was up 2.2 per cent compared with February this year, buoyed by modest growth in detached home prices. It is the third consecutive month that average sales prices have risen in the GTA from the prior month, although the monthly sales numbers are not adjusted for seasonal variations.
Toronto real estate agent John Pasalis, president of Realosphy Realty Inc., said the Toronto market was expected to take a hit from the introduction of tougher new mortgage qualification rules on Jan. 1, but the change does not appear to have had a major impact on average monthly prices in the first three months this year.
“When you look at it year-over-year, it looks terrible – the numbers certainly don’t look like a stable market,” he said.
“But when you look at prices, they are actually pretty stable. They’ve bounced between about $730,000 and $780,000 or so since July. They’ve been trending up the past few months, which is probably more seasonal, but they’ve been pretty stable.”
TREB said the 14-per-cent drop in average prices from last year was partly a result of a different composition of sales in 2018 compared with 2017; there were fewer detached homes selling in the first quarter this year and sales of high-end homes priced above $2-million fell by half compared with last year.
While prices have remained relatively stable in recent months, sales volumes continue to be weak as many buyers and sellers remain on the sidelines.
TREB said 7,228 homes sold in March, a drop of 40 per cent from 11,954 sales in the same month last year. Detached home sales fell 46 per cent, while condo sales dropped 33 per cent.
Toronto-Dominion Bank economist Michael Dolega said the number of homes sold in the GTA fell 6.8 per cent in March compared with February based on his own seasonal adjustment of the data, and is down 35 per cent from December. He said the average sales price rose 1.1 per cent in March over February on a seasonally adjusted basis, which is the first price increase in three months.
