‘Toronto home prices finally inch up in June’, said a headline in the Star last week.   ‘Toronto's housing market is finally starting to bounce back’ was another headline this week in another media outlet. Although it is great to see the media report the real news about the market, they are just now reporting what we have reported for months – namely that home prices started increasing in January of 2018.

In fact, prices have increased five out of the past six months.  Prospective home buyers have come to terms with the changing market.  They have come to the realization that waiting any longer creates a two-pronged challenge – increasing home prices and increasing borrowing costs.  As a result, many understand that now is the time to buy. 

The key factors leading to the increasing prices continues to be the combination of strong employment growth, historically low interest rates, and strong population growth*.

Brampton

June was the first month of the year where prices increased over the same month of the prior year, rising approximately 10,000 or 1% to $695,904 compared to June of 2017.   Averages prices have been on the rise 5 of the past 6 months.  June average prices are 7.2% higher than December of 2017. This was driven by strong increases in detached homes.  The June 2018 average price is down by only 9.1% from the all-time high set in March of 2017.   

Supply remains tight at just 2 months of inventory on hand.  This tight supply will continue to create upward pressure on average prices moving forward. Days on market have remained low at 20 which represents a significant improvement from the beginning of the year, when days on market reached 31.

Sales in June are up for the first time this year, rising 4% compared to the same month in 2017 to 771 homes.  The current level of sales is consistent with the strong, yet more balanced activity experienced in 2013 and 2014.

Mississauga

The average price in June was up for the first time compared to last year, rising 4% to $726,211.  This was driven by a similar increase in condo’s.  Prices have been on the rise 5 out of the past 6 months.  The June average price is down by 9% from the all-time high set in March of 2017. 

Supply remains tight at just under 2 months of inventory. This supply will continue to create upward pressure on average price moving forward. Days on market are at 20, which was a significant improvement from the 32 days on market experienced earlier in the year.  

For the first time this year, sales are not down double digits and were basically even with June of 2017 at 833 homes.  The current level of sales is consistent with the strong, yet more balanced activity experienced in 2013 and 2014.

Caledon

The average price in June of $874,690 is down approximately 12% from June of 2017.  As there are relatively very few transactions that occur in Caledon on a monthly basis, the average price is significantly swayed by the mix of properties as opposed to a reflection of the trending of price.  A clearer picture of Caledon’s market will appear over the upcoming months.

Supply eased up a little to 3.4 months but represents a slight tightening from the 4 months of inventory at the end of January.  This tightening of supply should create upward pressure on average price moving forward. Days on market eased up a little to 24, however, this represents a significant improvement from the 38 days on market experienced at the beginning of the year. 

Sales are up for the first time this year, rising 9% compared to June of 2017. 

Conclusion 

As we move further into the year, growth in sales and selling prices is expected to continue.  Expect stronger price growth in the comparatively more affordable townhouse and condominium apartment segments.  This being said, listings supply will likely remain below historical average in many neighborhoods in the Peel, which, over the long-term, could put more upward pressure on prices across all market segments.

 *Some Key Economic indicators for a healthy real estate forecast: 

Peel Region expected to grow by 500,000 people in next 2 decades https://www.insauga.com/500000-new-residents-expected-in-mississauga-and-surrounding-cities-over-next-two-decades

Employment in June 2018 https://www150.statcan.gc.ca/n1/daily-quotidien/180706/dq180706a-eng.htm

Interest rates unchanged in May https://globalnews.ca/news/4241700/bank-of-canada-interest-rate-announcement-may-30-2018/

Key economic indicators – Statistics Canada https://www.statcan.gc.ca/eng/start

Consumer confidence index https://www.conference-board.org/data/consumerconfidence.cfm