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The year 2018 saw a significant increase in the demand and price of condos in Toronto. The increase was largely due to a lack of affordability on single-family homes and townhouses. With prices as high as they have been over the recent past, condo prices certainly seemed much more attractive — and more attainable — to prospective homebuyers.
The average sale price of a home in the GTA in 2018 was $787,300. And, even though it was lower than the previous year's average of $822,681, that's still a hefty price for consumers to pay, especially first-time homebuyers.
Even though condos were certainly more affordable, their prices were also inflated at $554,497.
But, what will Toronto's housing market look this year? Below, are four Toronto real estate market predictions we'd be willing to bet on in 2019.
Condo Sales May Level Out
As hot as condo sales were in 2018, it's expected that this type of housing demand will slow down in 2019. That said, condos will still be a major player in the Toronto real estate market this year.
Plenty of new condo developments are nearing completion, and many more projects are on the way. With so many new units on the market, condo sales are likely to level off this year.
Home Sale Prices May See A Slower Climb
As interest rates start to climb and mortgage qualification criteria – including the new mortgage stress test – continues to tighten, home prices are expected to increase at a slower pace this year, likely below the 5 per cent mark.
In fact, real estate brokerage RE/MAX is anticipating a mere 2 per cent increase in housing prices in Toronto in 2019, according to the firm's 2019 Housing Market Outlook report.
Sale of Homes In The $1 Million + Range Will Soften
According to the same RE/MAX report, it's expected that homes priced over the $1.5 million mark will decrease this year. As homebuyers feel the pinch of rising rates as well as the challenge of passing the recently introduced mortgage stress test, sales of homes in this price bracket will weaken.
Rent Prices May Increase
Housing affordability has been a major issue for many Torontonians. Not only have many been turning to condos as a way to get into the market, but many others continue to rent because of high prices, stringent mortgage requirements, and rising mortgage rates. Unfortunately, rent prices haven't exactly been cheap, either, and they're expected to increase in 2019.
In 2018, the average rent for a 2-bedroom unit was $1,426.
Real estate investors who are paying more for real estate themselves are setting their rent prices to be more in line with what their properties are currently valued at, and that means renters can expect to pay more. In fact, Toronto could see rent hikes as high as 11 per cent. And with continued demand for rental units, landlords can get away with asking for more.
Things may have slowed in 2018 in terms of the number of home sales with a 16.1 per cent decline from the year before, but prices still continued on their upward climb last year.
If any of the above predictions ring true, homebuyers may see some relief this year with softening housing prices. Though, the rising interest rates and tougher mortgage requirements are still obstacles homebuyers will need to overcome.