The City of Toronto (area code 416) continues to strengthen, following the market declines after the province’s announcement of the Ontario Fair Market Plan and in particular a 15 percent tax imposed on foreign buyers in late April. In the City of Toronto, where generally there was much less foreign buyer activity than in the 905 region, the shock of the foreign buyers tax has been absorbed. The impact of the tax in the 905 region continues to negatively impact that residential resale market.

The only drag on the City of Toronto’s residential resale market is the sale of detached properties.

Detached property sales in the City of Toronto were off by 19 percent compared to November 2016. Sale prices faired more favorably. Compared to the same period last year they declined by only 5 percent, a clear indication that the market is further stabilizing.

Semi-detached and condominium apartments in the City of Toronto produced very strong results. Semi-detached property sales were only off by 4 percent compared to last year, and impressively prices were flat compared to November 2016. Condominium apartments provided even more remarkable results. Sales were up by almost 18 percent compared to last year, and sale prices declined by only 6 percent. This data makes it clear that the residential resale market has almost returned to where it was a year ago, which was the beginning of the irrational market runup that began in January of this year and was crushed by the provincial Fair Market Plan.

Although the market will continue to recover into 2018, it is not anticipated that it will parallel the Vancouver phenomenon after the British Colombia government promulgated a foreign buyers tax in that province in 2016. Since then we have seen two quarter point interest rate hikes by the Bank of Canada and the announcement by the Office of the Superintendent of Financial Institutions that commencing in January 2018, uninsured borrowers (borrowers who put down more than 20 percent of the purchase price of a property) will have to demonstrate that they can afford their mortgage payments at either the five-year average rate noted by the Bank of Canada or two percentage points higher than whatever rate they were able to negotiate with their bank. Simply stated, borrowers will have to show more income to qualify for a mortgage than they did in 2017.

Overall sales of residential resale properties have shown an impressive improvement compared to the months following the Fair Housing Plan announcement. There were 7,374 properties reported sold in the Greater Toronto area. This compares to 8,503 properties reported sold in November last year, a decline of only 13 percent. Notwithstanding this negative variance, it compares very favorably to the massive negative variances in June, July, August and September. Another positive sign of market recovery. Although sales were not occurring as quickly as they were last year at this time, at only 24 days on market, sales were brisk by historical standards.

The large negative variances in sales in the months mentioned above, (June, July, August and September) and an increased number of properties coming to market have increased the supply of properties available to buyers, with the exception of condominium apartments. Due to their price point, condominium apartment demand has remained strong, resulting in tight inventory. At the end of November, there were 18,197 properties of all types available to buyers in the Greater Toronto Area. This compares with only 8,639 last year, an increase of 110 percent. It should be remembered that the 8,639 properties available last year was a critically and dangerously low supply. That was made evident by the explosion of the irrational resale market that we experienced between January and April 20th of this year. In November, 14,349 new listings came to market, a 37 percent increase compared to the 10,456 new listings that came to market in 2016. There is no question that buyers have considerable choice compared to last year. This is another factor that mitigates against a repetition of what occurred in Vancouver, here in Toronto.

For the first time in years on a month-over-month, year-over-year comparison, the average sale price declined. Last year the average sale price came in at $777,091. This November it came in at $761,091, a decline of 2 percent. The decline was primarily due to the decline in the average sale price of detached properties in the 905 region. There were 2,319 detached properties sold in the 905 region in November. Their average sale price came in at only $898,605. By comparison, the average sale price of detached properties in Toronto (416 region) was a staggering $1,276,184. Unfortunately, there were only 812 properties in this category, not enough to have a significant impact on the overall average sale price.

Going forward, what we do not need is any further government intervention in the market place, unless it is designed to stimulate the supply of housing, particularly purpose built rental units. The provincial government’s politically motivated decision to move to universal rent controls in Ontario may win the liberals the next election, but it will have a devastating impact on the rental housing market and will only hurt those it was “designed” to help – tenants. The market has moved into balance, with more choice for buyers, and price increases now consistent with inflation and wage growth. A balance that will be further stabilized by the new mortgage stress testing. Government should let market forces control the residential resale market, just help with supply.

According to the Enhanced Statistics Statistical Query Report published by the Quinte Board for the wards that make up the County, 41 properties sold in November, three fewer than in October consistent with seasonal trends, and 18 fewer than the year previous, marking almost a 31% decline. Year to date sales are down only 6% given the very active market experienced earlier in the year, with 609 sales being recorded thus far compared to 651 at this time last year.

There was only one more new listing in November 2017 than one year ago when 66 properties came onto the market. Year to date, the County still trails last year’s numbers marginally with 1158 new listings compared to 1186 by this time in 2016. Where the difference is felt, however is in active listings. At month’s end, the Quinte Board reported 300 listings as being available for sale which is 24% more than last year when only 242 were available.

Despite that however, those properties that come onto the market for sale continue to be bought up at a faster pace than last year, continuing a trend that has been established over the last several months in the County. Specifically, properties recorded as sold were only on the market 74 days on average, 4% less time than last year when the average days on market was listed as being 77.

In addition, and as stated, prices just keep going up in the County. The average sale price of properties sold in the month of November came in at $317,461, 7% higher than the same month last year when the average sale price was calculated to be $297,735, a clear indication that demand for property in the County remains strong and that the area continues to benefit from its accessible price point, consistent with the stronger performance of more affordable properties across markets generally, most particularly condominium apartments, in urban centres.

Indeed, as we approach the end of the year and look forward to 2018, affordability will likely be an increasingly influential factor in the performance of the real estate market, particularly as the average Canadian household debt to income ratio sets new records, and is potentially exacerbated by the threat of higher interest rates and ever tightening lending rules imposed by both the government and financial institutions. Rising rates, however, are due in large to the recent strong performance of many of the Canadian economic indicators including job growth and a positive trajectory for the GDP generally, all of which also contribute to inflationary pressures. While instability and uncertainty in the political and economic climate south of the border as well as globally continue to be complicating factors for real estate market forecasting, the economic fundamentals are generally strong and in place for ongoing stability and sustainability in the County real estate market for the end of the year and looking forward to the next.

The scarcity of new listings has certainly been the trend throughout most of 2017 and November was no exception. 191 new listings were reported in November 2017 versus 210 in November 2016 showing a 9% decline year over year. Year to Date (“YTD”) new listings were down 11% year over year with 3385 new listings reported by the end of November 2017 compared with 3802 that same time last year.

With a number of forces at play including lack of inventory and rising prices, the total number of sales for the month of November were down 23% from last November with 144 sales reported in November 2017 compared to 186 sales reported in November 2016. YTD sales were down 13% with 2279 sales reported by the end of November 2017 compared to 2623 in November 2016.

And despite fewer sales reported year over year, the average price of a single family residential home in the Western Region showed an increase of 7.8% from $500,091 in November 2016 to $539,505 in November 2017 likely due in part to increased or equal activity in sales of properties between $600,000 and $999,999. The Total Sales Dollar Volume for November 2017 was down 15% from November 2016. However, given the strong market performance throughout the year, the Total Sales Dollar Volume YTD was up 6% year over year.

Consistent with November statistics contained in this report, it’s not surprising to note that the average price of a residential single-family home in all municipalities across the Western Region was up year over year and the number of sales were down in all municipalities. The YTD average sale price in Collingwood in November 2017 was up 17.0%, $513,845 vs $439,052 in November 2016. The number of sales in Collingwood YTD was down 16.7% year over year. The Blue Mountains saw a 23.8% increase in average sale price YTD, $819,872 vs $662,292 year over year, making it the highest average sale price in the Western Region for the month of November. The Blue Mountains showed a slight 0.5% decrease in the number of homes sold in November 2017 vs November 2016. YTD, prices were up 24.4% in The Municipality of Meaford with November 2017 reporting an average sale price of $432,104 vs $347,289 in November 2016. The number of sales decreased 26.8% year over year. Grey Highlands reported a whopping 32.5% jump year over year, with the November 2017 price coming in at $631,374 vs $476,551 in November 2016. Sales were down 7.2%. Clearview saw a 13% increase in the average price, $558,899 over $494,741 year over year with a 28.9% decrease in the number of homes sold 2017 vs 2016. YTD, Wasaga Beach was up 22.4%, with the average sales price reported at $428,527 over $350,227 for November 2016. Sales were down 22.7% year over year.

The Sales-To-Listings Ratio is an important measure of the overall health of the real estate market and the balance between housing supply and demand. In November 2017, the ratio between the number of sales and new listings coming onto the market was 75.39, indicating that the SGBAR Western Region remained a tight Seller’s market. Notwithstanding that, this figure still marks a drop from the 88.57 sales to new listings ratio recorded in November 2016, a testament to the hectic market of one year ago and confirming that conditions have cooled from last November.

The pace of the November market was as moderate as the November temperatures were in the Western Region of Southern Georgian Bay. Inventory remained at record lows and a strong Sellers market prevailed. Overall most Buyers were more reserved than they were earlier in the year. However, with new lending guidelines effective January 1st, 2018 that will require borrowers who do not require mortgage insurance to qualify at a higher interest rate, Buyers may be motivated to act before the New Year.