The national sales cycle in January was the slowest since 2015, but, in Toronto’s case, that doesn’t tell the whole story.
“Inventory in Toronto was extremely low in January,” said Tom Storey, a Royal LePage Signature Realty sales agent. “We can blame snow storms and things like that, but in terms of actual sales, it was just over 20 more than January 2018.”
One reason for the low inventory is that the market is finally balanced. Now that people aren’t cashing in on bidding wars, they can scarcely think of reasons to move. It certainly doesn’t help that the housing market has become a favourite target of regulators.
“It’s also expensive to move,” said Storey. “When you look at the peak of the market in 2017, people would cash out on their houses, but now people aren’t moving because they can’t get the same money they could a few years ago. Now people move because of lifestyle.
“People are also no longer being approved for the same amount of money they used to be, so they’re staying in their homes longer before upsizing or downsizing.”
Low inventory could also explain the Canadian Real Estate Association’s price index for the Greater Toronto Area rising 2.7%.
January was chilly nationwide
Nationally, transactions declined 4% over January 2018, with 23,968 sales going through the Multiple Listing Service this year. Last January—the beginning of a chill that permeated housing markets across Canada—there were 24,977 sales.
The national sale price for all housing types sold last month was $455,000, which fell 5.5% over January 2018, marking the most significant year-over-year decline since May 2018.
However, the MLS Home Price Index was up 0.8% year-over-year, but that is also the smallest boost since May 2018.
“Sales, market balance and home price trends are out of synch among major Canadian cities that have the greatest impact on national results,” said Gregory Klump, CREA’s chief economist. “It’s clear that housing market conditions remain weaker in the prairie region and the Lower Mainland of British Columbia. Notwithstanding the intended consequences, tighter mortgage regulations that took effect in 2018, combined with previous tightening will weigh on economic growth this year.”