It appears that some people who initially moved to the sidelines due to the psychological impact of the Fair Housing Plan and changes to mortgage lending guidelines have re-entered the market. Home buyers in the GTA recognize that home ownership is a quality long-term investment and have pushed prices up year over year for the second consecutive month. Prices are also up for 5 of the past 7 months.
They have also 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
July was the second consecutive month with year over year price increases and the 6th monthly price increase since December of 2017. Prices in July 2018 rose 10% to $707,017 compared to July of 2017. July average prices are 9% higher than December of 2017. This was driven by strong increases in detached homes. The July 2018 average price is down by only 8% from the all-time high set in March of 2017.
Supply remains tight at just 2.4 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 22, which represents a significant improvement from the beginning of the year, when days on market reached 31.
July posted the second consecutive month of year over year sales increases, rising a dramatic 16% compared to the same month in 2017 to 668 homes. The current level of sales is consistent with the strong, yet more balanced activity experienced in 2013 and 2014.
Mississauga
July was the second consecutive month of the year over year prices increases and the 5th monthly price increase since December of 2017. Prices in July 2018 rose 1% to $706,570 compared to July of 2017. July average prices are 5% higher than December of 2017. This was driven by increases in the condo market. The July average price is down by 12% from the all-time high set in March of 2017.
Supply remains tight at just over 2 months of inventory. This supply will continue to create upward pressure on average price moving forward.
Days on market are at 24, and represents a significant improvement from the 32 days on market experienced earlier in the year.
For the first time this year, sales are up year over year at 729 homes. The current level of sales is consistent with the strong, yet more balanced activity experienced in 2013 and 2014.
Caledon
Year over year sales increased for 2 consecutive months, rising 6% over July of 2017.
The average price in July of $904,223 is down 6% from July 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 in the fall.
Supply eased up to 4.1 months and remains consistent with the beginning of the year.
Days on market eased up to 36 and remains consistent with the beginning of the year.
Milton
July was the first month this year, with year over year price increase and the 4th monthly price increase since December of 2017. Prices in July 2018 rose 5% to $711,394 compared to July of 2017. July average prices are 3% higher than December of 2017. This was driven by similar increases in detached homes. The July 2018 average price is down by 12% from the all-time high set in April of 2017.
Supply remains tight at just 2.2 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 23 which represents a significant improvement from the beginning of the year, when days on market reached 30.
July was the first time this year with year over year sales increases. Sales rose a dramatic 23% compared to the same month in 2017 to 184 homes. The current level of sales is consistent with the strong, yet more balanced activity experienced in 2013 and 2014.
Oakville
Year over year sales increased for 2 consecutive months, rising a very dramatic 51% over July of 2017 to 286 homes.
There have been 5 monthly price increases since December of 2017. Prices in July 2018 decreased 4% to $1,018,108 compared to July of 2017. July average prices are 2% higher than December of 2017. This was driven by strong increases in the condo market. The July 2018 average price is down by 22% from the all-time high set in March of 2017.
Supply tightened for the first time in 3 months to 3.2 months of inventory on hand. This tightening of supply should create upward pressure on average prices moving forward.
Days on market have eased up slightly to 30, which represents a significant improvement from the beginning of the year, when days on market reached 38.
Burlington
Year over year sales increased for 2 consecutive months, rising 13% over July of 2017 to 189 homes.
July was the second consecutive month of the year with year over year prices increases and the 4th monthly price increase since December of 2017. Prices in July 2018 rose 6% to $791,712 compared to July of 2017. July average prices are 9% higher than December of 2017. This was driven by strong increases in the condo market. The July 2018 average price is down by only 10% from the all-time high set in May of 2017.
Supply eased to 2.8 months of inventory on hand.
Days on market have eased up slightly to 30, which represents a significant improvement from the beginning of the year, when days on market reached 38.
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 neighbourhoods in the Peel and Halton, 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 July 2018 https://www150.statcan.gc.ca/n1/daily-quotidien/180810/dq180810a-eng.htm
Interest rates increase slightly in July https://globalnews.ca/news/4324879/bank-of-canada-interest-rate-hike-july-2018/
Key economic indicators – Statistics Canada https://www.statcan.gc.ca/eng/start
Consumer confidence index https://www.conference-board.org/data/consumerconfidence.cfm