TREB: 2016 GTA Real Estate Market in Review and 2017 Market Outlook

TREB: 2016 GTA Real Estate Market in Review and 2017 Market Outlook

 

Toronto Real Estate Board released the Market Year In Review & Outlook Report 2017 On February 01, 2017. This report provides us with valuable information and deep insight of the market.

 

2016 Market Year in Review

 

HIGHLIGHTS

  • Record home sales and accelerated annual sales growth occured in 2016.

2016 PRICE GROWTH

2016 RECORD SALES

  • Key drivers of record home sales include population growth, low mortgage rates, low unemployment, and above-inflation income growth.
  • Strong demand and very low inventory resulted in robust price growth.

2016 ACTIVE LISTING

  • Record home sales in 2016 were heavily based on domestic demand.
  • Foreign buying activity in the GTA, represented a minimal 4.9 per cent of transactions. The great majority of foreign buyers were purchasing a primary residence, a property to rent out, or a property in which another family member would live.

FOREIGN BUYERS

2017 Market Outlook For Home Sales And Prices

HIGHTLIGHTS

  • The Ipsos Home Buyers Survey saw the number of likely home buyers decline in comparison to a year earlier.

2017 LIKELIHOOD TO BUY

  • Sales on TREB’s MLS® System are expected to range between 104,500 and 115,500, with a point forecast of 110,000.

2017 SALES

  • Despite the possibility of a decline in sales, first-time buyers will continue to account for more than half of home sales in the GTA. Strong first-time buyer activity points to confidence in home ownership as a quality long-term investment.
  • 2017 will still be marked by a persistent shortage of listings, especially for low-rise home types, which remain very popular with intending buyers.

2017 LIKELY HOME TYPE

  • A likely range for the average selling price in 2017 is between $800,000 and $850,000, with a point forecast of $825,000 (Chart 2.2). This suggests an approximate calendar year growth rate ranging between 10 per cent and 16 per cent.

2017 PRICE

The outlook for sales reported through TREB’s MLS® System remains positive for 2017. Looking at pure fundamentals, including a flatter unemployment trend in the GTA, coupled with the affordability impact of higher prices and borrowing costs and stricter mortgage lending guidelines, we should expect to see sales below their record high in 2016. TREB MLS® System sales are expected to range between 104,500 and 115,500, with a point forecast of 110,000.

Strong rates of price growth and a short supply of listings will continue to make headlines in 2017. Price growth is expected to remain well-above the rate of inflation in 2017. A likely range for the annual growth rate in average price is between 10 per cent and 16 per cent, with a likely range for the average selling price in 2017 between $800,000 and $850,000, with a point forecast of $825,000.

In all likelihood, year-over-year price growth will be closer to 20 per cent in the first few months of the year. Price growth may ebb in the second half of the year, if sales edge lower due to higher mortgage rates and stricter lending guidelines.

Jan Sales

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