House Prices are Rising Again in Mississauga
After a few months of small but steady month over month decreases in low-rise home prices, the market appears to be showing signs of strengthening.
According to data recently released by the Toronto Real Estate Board (TREB), houses prices in the 905 increased slightly in December while sales remained down compared to 2016.
TREB president Tim Syrianos recently announced that GTA realtors reported 92,394 sales through TREB’s MLS System in 2017—down 18.3 per cent compared to the record set in 2016.
According to TREB, record sales in 2017’s first quarter were followed by subsequent declines after the Ontario Fair Housing Plan was announced. That said, sales picked up in the fourth quarter as the impact of the plan (which proposed to implement a 15 per cent tax on foreign buyers and speculators) started to wane.
TREB also suggests that some buyers entered the market swiftly to beat the upcoming OSFI stress test guidelines (which went into effect Jan. 1).
“Much of the sales volatility in 2017 was brought about by government policy decisions. Research from TREB, the provincial government and Statistics Canada showed that foreign home buying was not a major driver of sales in the GTA. However, the Ontario Fair Housing Plan, which included a foreign buyer tax, had a marked psychological impact on the marketplace,” says Syrianos. “Looking forward, government policy could continue to influence consumer behavior in 2018, as changes to federal mortgage lending guidelines come into effect.”
TREB says the average selling price for 2017 as a whole was $822,681 - up 12.7 per cent compared to 2016. That growth can be attributed to the intense price increases that dominated the market during the first few months of 2017—increases that levelled off in the spring.
In December, the MLS Home Price Index (HPI) composite benchmark was up by 7.2 per cent year over year, and the overall average selling price was up by 0.7 per cent year over year.
“It is interesting to note that home price growth in the second half of 2017 differed substantially depending on market segment. The detached market segment - the most expensive on average - experienced the slowest pace of growth as many buyers looked to less expensive options. Conversely, the condominium apartment segment experienced double-digit growth, as condos accounted for a growing share of transactions,” said Jason Mercer, TREB’s director of market analysis.
As for numbers, a detached house in the 905 currently costs about $910,216 (up a little from $898,605 in November). A semi costs about $635,999 (up from $632,631), towns are selling for $575,894 (down from $586,601) and condos are costing buyers about $430,001 (up quite a bit from $414,782 in November).
Syrianos says TREB will have more to say about 2018’s market in the coming weeks.