Toronto-area home prices saw year-over-year drop in February, as number of sales plunged
Despite a 12.4 per cent decline in the average price of a resale home in February from the previous year, the average was still above 2016 levels, the Toronto Real Estate Board said.

TheStar.com
Tess Kalinowski
March 6, 2018

A 12.4 per cent year-over-year drop in the average selling price of a Toronto-area resale home in February is not as bleak as it seems, says the Toronto Real Estate Board (TREB).

Despite a decline of nearly $110,000 in the average price to $767,818, from $875,983 in February 2017, last month’s figure was still about 12 per cent more than homes were selling for in February 2016. Back then, the average price was $685,278.

It was also higher than January’s average of $736,783.

The average price encompasses all home categories, including detached, semi-detached, townhomes and condos.

The number of sales also plunged 34.9 per cent last month from the same month last year — only 5,175, compared to a record 7,955 transactions in February 2017. The number of sales was still down substantially from 7,621 in February 2016.

The 10,520 new listings last month represented a 7.3 per cent increase over the 9,801 listings in February 2017. That was, nevertheless, higher than the 10-year average for February, said TREB.

The sluggish start to the year — January prices were down 4.1 per cent year over year — is exactly what the real estate board was forecasting because of the extraordinarily strong growth in both the number of sales and prices in the first four months of last year, said TREB president Tim Syrianos in a press release.

“Prospective homebuyers are still coming to terms with the psychological impact of the (Ontario) Fair Housing Plan, and some have also had to re-evaluate their plans due to the new mortgage stress test guidelines and generally higher borrowing costs,” he said.

The Ontario Liberal government launched its housing policy, including a foreign buyers tax, last April — the same month the Toronto-area market peaked with a 24.5 per cent year-over-year increase in the average home price, to $920,791.

Condo prices continued to rise — up 10 per cent in February, year over year — to an average of $529,782. But the number of sales was down 30.8 per cent.

That compares to a 17.2 per cent drop in the average price of a detached house in the Toronto area and a 41.2 per cent decline in the number of detached home sales. In the 905 areas, detached home sales dropped 43.3 per cent compared to 33.6 per cent in the city of Toronto.

York Region continued to see the biggest price declines. Where the benchmark price across the region was up 3.2 per cent year over year, it was down 4.7 per cent in York, with a 7.4 per cent drop in the single detached home category, according to the Multiple Listings Service Home Price Index Composite Benchmark.

The overall benchmark increase was largely a result of the 18.8 per cent increase in condo prices and the 7.5 per cent growth in townhome prices. The trend to stronger growth in the starter-home range, which tends to be concentrated in condos and townhouses, is expected to continue, said TREB director of market analysis Jason Mercer.

The benchmark price differs from the average because it compares similarly sized, aged and located homes and isn’t as vulnerable to a particular high or low in any of the housing categories.