Over the past few years, we've seen housing prices across the GTA skyrocket to incredible highs. And while this might have been great news for sellers, it pushed many buyers out of the market.
That said, the fire has dimmed, with prices and sales slowing down over the past few months. But could the spring season bring a spark back to Toronto's real estate market?
Here's what you can expect from Toronto's housing market this spring...
The Market Will Continue to Balance Out
After years of prices going through the roof in Toronto - and across the country - they've cooled somewhat. Based on expected market conditions, the seller’s market in Toronto isn't going to be as hot as it was months prior. And it's certainly not as strong as it currently is for other markets across the nation that are gaining steam, like Ottawa and Montreal.
Prices to Grow Slowly
In the coming months of spring and summer, prices are expected to make small gains. January prices increased from $748,325 in January to $780,397 in February, and such prices are expected to continue to creep up.
That said, the gains are modest at best compared to last year’s market.
Sales Will Trend Upwards Modestly
Sales increased from 3,993 in January to 5,025 in February. But even though the numbers are inching upwards, they're still slightly under where they were the same time last year. February 2018 saw a total of 5,149 sales, and in 2017, the number was at 7,955. And sales numbers aren't really expected to flourish any time soon.
The sales-to-new listings ratio (which is a measure of the number of homes sold compared to the number of new listings hitting the market) in February was 51 per cent, and 56 per cent for the Toronto core. Such numbers suggest that the housing market in Toronto is balancing out and is not necessarily in strong favour of either buyers or sellers.
And February's sales-to-new listings ratio suggests that we won't be seeing any repeats of skyrocketing prices over the near future as we have in the recent past.
It's highly possible that this year's particularly rough winter has had an impact on sales. With all the snow and ice creating obstacles for buyers, sellers have had to bear the brunt of it.
And it will take a string of high temperatures over the next little while to melt all those rock-hard snow banks that remain, which could continue to hinder sales, at least over the early part of spring. In any case, the weather has certainly been a factor in how the market has behaved.
Homeowners are typically hesitant to list when the weather isn't cooperating because trying to get out there is a lot more of a challenge for prospective buyers. Having said that, more listings should be popping up on the market as the snow continues to melt.
Demand For Luxury Homes and Condos Will Increase
According to a Royal LePage report, the demand for luxury homes and condos will increase. And with such demand will also come a push in prices. It's expected that the average price of a luxury house in the GTA will hit $3,691,700 by the start of 2020, with a more active spring market starting the wave.
At the same time, the average price of a luxury condo will increase to $2,390,405 over the same time frame.
Interest Rates Will Remain Steady
It's not likely that the Bank of Canada will increase rates more than once this year, though rates won't likely dip, either.
Right now, the rate for a 30-year fixed-rate mortgage is 4.375 per cent, which should remain around this mark throughout the spring season. Considering the fact that mortgage rates are a key factor in determining the affordability of a home purchase, buyers would be well-advised to keep their finger on the pulse of what happens with mortgage rates going forward.