|2019 Outlook Summary for Toronto Housing Market
The following points summarize TREB’s outlook for 2019 and results of the Ipsos Home Owners and Home Buyers surveys:
• 83,000 sales are forecast to be reported through TREB’s MLS® System in 2019 – a moderate increase compared to 77,375 sales in 2018. This moderate increase will be underpinned by an uptick in the number of people considering a home purchase, as reported by Ipsos, which will be supported by continued population growth, low unemployment rate and lower average fixed-rate borrowing costs compared to 2018.
• Slightly tighter market conditions, similar to those observed in the second half of 2018, will support a moderate pace of price growth in 2019. The average selling price in the Greater Toronto Area will increase to $820,000 – close to the peak reached in 2017 and up from an average of $787,195 in 2018. The condominium apartment market segment will continue to be the driver of price growth, whereas average detached home price growth will be below the average growth rate for the market as a whole.
• Ipsos results confirm that the OSFI-mandated mortgage stress test has negatively impacted affordability. TREB analysis found that, on average, home buyers had to qualify for monthly mortgage payments almost $700 above what they will actually pay. In order to account for the higher qualification standard, intending home buyers have adjusted their preferences, including the type of home they intend on purchasing. The Ipsos Home Buyers Survey found that the share of buyers intending to purchase a detached home is at the lowest level since the fall survey was introduced in 2015. Higher density home types, which have a lower price point on average, have become more popular with intending buyers.
• Notwithstanding the brief spike in 2017, new listings entered into TREB’s MLS® System receded back to the post-recession norm in 2018, hovering between 155,000 and 156,000. The expectation is that the new listing trend will remain relatively flat in 2019. The Ipsos Home Owners Survey pointed to a slight dip in listing intentions this year.
• The rental market in the GTA is expected to remain tight in 2019, with low vacancies underpinning annual average rates of rent growth in the high single-digits or even low double-digits for one-bedroom and two-bedroom condominium apartments leased through TREB’s MLS® System. The supply of rental units could continue to be problematic in 2019. The Ipsos Home Owners Survey found that almost two thirds of investor-owners are thinking about selling one or more of their units over the next year. The existence of rent controls on these units could arguably be prompting this thought process.
“Despite some uncertainty regarding economic growth over the next year, many traditional housing market drivers remain in place. The GTA population will continue to grow over the next year, as people are attracted to the GTA by the region’s diversity of job opportunities. Unemployment is expected to remain very low and home buyers are expected to benefit from lower fixed mortgage rates, on average, compared to 2018,” said Jason Mercer, TREB’s Director of Market Analysis and Service Channels.
“Ipsos surveys consistently find housing to be top of mind for Canadians. In the fourth quarter of 2018, housing was ranked as the third most important issue Canada-wide and second most important issue in Ontario. This suggests that housing policy should also be top of mind for both the relatively new provincial government in Ontario and federal party leaders who have an election on the near horizon,” said Sean Simpson, Vice President at Ipsos.
Source: Toronto Real Estate Board
Sanjeev Manocha, MBA
Real Estate Sales Representative
Accredited Buyer Representative (ABR)
Re/Max West Realty Inc, Brokerage
96, Rexdale Blvd., Toronto