Market Report

Toronto Real Estate Market Update – May 2019

Toronto Real Estate Market Update – February 2019

February results were expected to continue what we saw in the first month of 2019 — modest growth in sales and average sale prices. That didn’t materialize. I have generally not regarded the weather as having a material impact on the residential resale market, but this February may be the exception.

This February we saw a modest decline in sales compared to February last year. This year 5,025 properties were reported sold, a small decline of 2.4 percent compared to the 5,148 properties reported sold in February 2018. The reason for this decline, particularly in the 416 regions, was simply due to a lack of inventory. Since January saw a year-over-year increase in supply, the only plausible explanation is the weather. February brought three major snow storms, and effectively paralyzing the greater Toronto area on three different occasions, with snow mounting to shocking levels. It is not surprising that properties did not come to the market.

In February only 9,828 properties came to market, 6 percent less compared to the 10,473 that became available least year. Even the 10,473 properties that became available last year were insufficient to meet demand. Consequently, as we enter March, we are marginally lower than the properties available to buyers last year, and most of the properties are in the 905 regions of the greater Toronto area. Of the 13,284 properties available for sale, 70 percent of them, or 9,352, are located in the 905 regions.

It is clear that demand is present and because of supply shortages it is beginning to pent up. In February the properties that sold caused the average sale price to increase for the second month in a row. All properties sold for $780,000 in February, almost 2 percent higher then last February’s sale price of $767,000.

In the City of Toronto, the average sale price increased dramatically to $840,000 (a price which includes all condominium apartment sales), at least 10 percent more than the average sale price in the 905 regions. The clearest example of both the supply shortages and the impact on average sale prices is February’s average sale price for semi-detached property in the City of Toronto. In February the average sale price came in at a shocking $1,087,363. Semi-detached property sales only exceeded $1 Million during the frenetic increase in prices in late 2016 and the early months of 2017.

The length of time that properties spent on the market also demonstrates how strong the City of Toronto’s resale market continues to be. In February all properties available for sale in the greater Toronto marketplace sold in only 25 days. In the City of Toronto sales happened at a lightning speed of 22 days. Semi-Detached properties both in the 905 regions and the City of Toronto sold even faster – 18 and 15 days, respectively. What is astounding and further proof that supply is insufficient to meet demand, is that all semi-detached properties sold for more than their asking price. At 102 percent in the 905 regions and at 106 percent in the City of Toronto.

It is concerning that the last truly affordable housing type, condominium apartments, is rapidly becoming unaffordable. In February all condominium apartments sold in the City of Toronto (on average) for $612,000. In Toronto’s central districts, where most condominium apartment sales take place, the average sale price came dangerously close to $700,000. With the increase in mortgage interest rates and the implementation of mortgage stress testing, these prices are making it very difficult for first time buyers to enter Toronto’s real estate market.

At the other end of the real estate spectrum, higher end property sales continue to strengthen. In February 118 properties having a sale price of $2 Million or more were reported sold. This compares favorably to the 126 sold last year. It is interesting to note that condominium apartments accounted for almost 10 percent of sales in this price category.

As we move into March and improving weather conditions, we anticipate more properties coming to the market to meet demand. It would appear that buyers have accepted higher interest rates and mortgage stress testing but are frustrated by their inability to find suitable properties for sale, especially semi-detached properties in the City of Toronto.

Collingwood Real Estate Market Update – February 2019

The average sale price for the Western Region was $508,899, up 9.3% from February 2018. With inventory across the region remaining at near historic lows, combined with the ongoing population growth in the area, prices have continued to increase over the past 10 years. New listings were down 5.1%, with 188 residential properties coming to market in February 2019 vs 198 last February. Active listings were up 16.2% year over year with 496 properties available in February 2019 vs 427 in February 2018. Sales showed a significant increase of 29.1%, with 111 sales reported in February 2019 compared to 86 last February.

February 2019 reported 4.5 Months of Inventory (MOI) down from 5.0 months for February 2018. An MOI under 5 months is considered a Seller’s market, meaning less supply available, creating tighter market conditions. With the snow and ice melting away and Spring right around the corner, more Sellers will likely be ready to bring their homes to market offering patient Buyers more choices.

PEC Real Estate Market Update – February 2019

Based upon the statistics released by the Quinte & District Association of Realtors® (“the Quinte Board”), the pace of activity in the Prince Edward County (“the County”) real estate market slowed somewhat over the month of February. The potential reasons for this pause are twofold. First, the County was pounded by a series of particularly brutal storms over the last month which have made travel to and throughout the County challenging at best. Bluntly put, just about everything has been covered by a thick blanket of snow and coated by an intimidating sheet of ice, which has undoubtedly impeded the ability of potential buyers to get into and properly inspect the properties in which they may be interested. In addition to that, those actively involved in the market have been consistently frustrated by the shortage of good property stock, which has been further compounded by the limited number of new listings coming onto the market. Perhaps with the forecasted thaw, and impending spring conditions, sellers will be encouraged to put their properties on the market, and buyers will be able, and feel more inclined to venture out and see them.

Specifically, according to the Quinte Board, only 24 properties sold in the month of February across the wards that make up the County. That is over 35% fewer than sold the year previous when 37 properties were recorded as sold, and is 10 fewer than sold in January, 2019. Year to date, 58 properties have changed hands in the County, marking a 4% increase over the 56 sales logged last year by this time.

As indicated, however, the number of new listings are flat. Only 53 new properties came onto the market which is the same as the year previous when the market was already tight. Year to date new listings lag last year’s numbers by 15% with only 140 new properties being listed in total thus far in 2019 compared to 165 one year ago.

It is interesting to note that those properties that did sell in the County during the month of February, did so at a premium. The Quinte Board calculated the average sale price of properties this month at $502,953. This impressive benchmark exceeds last year’s figure ($392,059) by over $100,000 and marks a year over year increase of over 28%. As indicated in earlier reports, due to the smaller sample pool from which these figures are derived, real estate statistics for the County are subject to more volatile swings as they are inevitably more influenced by the particular cross-section of properties that sell at any particular time. Having said that, they still provide some insight into the trends and trajectory of the market, which in the case of price, has been a relentless surge upwards over the last few years. Consistent with this, the median sales price for the County came in at $512,000, which amounts to a whopping 60% year over year increase from $373,500 in February 2018.

Buyers did take longer to locate, settle on, and secure their properties of choice, as the average days on market for properties that sold in February went up from 68 to 99, which is an increase of almost 46%. This could be a factor of a number of things including: sellers being tenacious about their selling price and forcing buyers to deliberate longer before being able to confidently proceed with an offer; buyers taking longer to find exactly what they were looking for; or as stated, the particularly inclement weather confronting all players in the County real estate market in February.

And finally, while they may not necessarily reflect the properties or price points that buyers are interested in or looking for, there are in fact more properties on the market this year than last. At months end, 402 properties were listed for sale, while according to the Quinte Board, there were only 249 the year previous at that time.

The prospect of warming temperatures and the advent of spring should usher in new market conditions for the County. Hopefully, it will prompt sellers to list their properties for sale with the knowledge that the attributes of their property can be more favourably showcased, and the belief that buyers will be more inclined to venture out and appreciate them. Generally, market conditions seem to be stabilizing with a return to a more sustainable pace, but recent price trends suggest that, despite its ongoing relative competitive price advantage, the County is not immune from the affordability challenges now confronting many buyers grappling with higher debt loads, carrying costs, and the more stringent lending criteria imposed by the stress test.

Toronto Real Estate Market Update – January 2019

2019 started positively, surprising many who were anticipating the double-digit declines that the Toronto and area residential resale marketplace delivered in November and December of last year. Although moderate, January delivered increased sales volume and average sale prices compared to January 2018.

There were 4,009 sales reported in January, a less than 1 percent increase compared to 2018, but an increase nonetheless. Encouragingly, January’s positive results were due to an improvement in Toronto’s 905 region. The Greater Toronto Area was dramatically impacted by the provincial foreign buyers’ tax and has lagged behind the Toronto 416 market since the spring of 2017. In January, the 905 region’s sales were up by 2.5 percent compared to last year, while the City of Toronto’s sales declined by 3.5 percent. The decline in City of Toronto sales was not caused by a decline in demand. Rather the decline was driven by a chronic shortage of supply. At the end of January, the Greater Toronto Area had 2.7 months of inventory, whereas the City of Toronto found itself with only 1.9 months of inventory. The difference in inventory is also reflected by the fact that sales in the 905 region took place in 33 days (an average), yet it took only 29 days for all properties in the City of Toronto to sell.

Another positive aspect of January’s performance is the supply of new properties that came to market. In January, 9,456 new properties became available to buyers. This is a favourable 10.5 percent increase compared to the 8,561 new listings that became available last year. Entering February, active listings were slightly higher than last year. February began with 11,962 active listings compared to the 11,894 available last year. The bulk of these listings are located in the 905 region. OF the 11,962 active listings, 8,387, or more than 70 percent, are located in the 905 region.

January’s average sale price came in at $748,328, an increase of almost 2 percent compared to last year’s average sale price of $735,874. This is exactly the kind of increase that reflects a stable and sound market, not the double-digit monthly increases that became commonplace in 2016 and early 2017. Double-digit increases in average sale prices become unsustainable and unfortunately can lead to painful corrections.

In this regard, Toronto’s high-end residential market continues to adjust. In January, 76 properties having a sale price of $2 million or more were reported sold. This compared to 90 reported sold during the same period last year. The adjustment is also evident in the sale price to listing ratio witnessed in January. Detached properties in Toronto’s central districts are the most expensive properties in the Greater Toronto Area. All detached properties in these districts sold for 95 percent of their asking price. This ratio was much lower than the detached properties in other trading districts. For example, all detached properties in Toronto’s eastern districts sold for 100 percent of their asking price. The fact that the average sale price in the eastern districts is half ($916,588) that of the central districts ($1,938,617) is no doubt responsible for this divergence. Higher-end properties accelerated more dramatically during the pre-2017 introduction of the Ontario Fair Housing Plan and are retracting proportionally, especially with the introduction of the 15 percent foreign buyers’ tax.

Condominium apartments continue to be the most affordable housing form, but again, because of supply, average prices continue to increase. In January, the average sale price in the City of Toronto increased by almost 9 percent to $591,444. In Toronto’s central districts, where most condominium apartment sales are located, the average sale price came in at $677,997, a 10 percent increase compared to last year’s prices. In January, there were only 1,738 condominium apartments for sale in the City of Toronto and only 1,093 in Toronto’s central districts where most sales take place. This shortage of supply will continue to put upward pressure on prices, constrained only by affordability.

Although it is a little early in the year to be forecasting for 2019, January’s results – sales volumes, price increases and increases in supply – all point to a healthy 2019. Last year only 77,375 residential properties were reported sold, the lowest number since the recession of 2008. Barring any unexpected economic events this year, we should see between 83,000 and 85,000 reported sales, with average sale prices increasing by about 2-3 percent. January’s average sale price came in at $748,328. Last year’s annual average sale price was $787,000. By year-end, Toronto and area’s average sale price should be approximately $800,000. From a long-term sustainability prospect, we should be thrilled with this number.

Collingwood Real Estate Market Update – January 2019

January 2019 market conditions in the Western Region of Southern Georgian Bay reflected the more moderate and balanced pace experienced throughout the last portion of 2018 compared to what Buyers and Sellers had experienced over the past few years. Looking back, the Fair Housing Plan was introduced by the Ontario government in April of 2017 to quiet the market frenzy that began in 2016. New mortgage rules were introduced in 2018 that required all Canadian home buyers to undergo a mortgage stress test, even with a down payment of 20% or more. These measures were intended to cool overheated markets and curb risky lending. Many Buyers have been faced with difficulties qualifying for loans under the stress test that ensures Buyers could still afford their mortgage if interest rates were two percentage points higher than the rate they negotiated with their bank.

It’s not surprising that with interest rate hikes implemented in 2018 along with government measures and ongoing supply issues that the number of sales in the Western Region of Southern Georgian Bay in January 2019 were down 16.5% from one year ago.

With the ongoing scarcity of listings and continued demand driving prices upward, the average sale price in the Western Region reported a 29.7% increase from last January, reflecting similar activity reported across the region where the average sale price was up in all areas except Meaford, which reported a modest decline of 3.3%.

New listings were up 13% year over year and even though active listings were up 29.8% to 471 in January 2019, inventory remained at near historic lows.

The Sales-to-New-Listings Ratio indicates the ratio between the number of homes sold and the number of new listings entering the market. With the Sales-to-New-Listings Ratio down from 60.9% last January to 45%, the Western Region is clearly heading out of a long-running Seller’s market into a balanced market. A higher ratio implies a Seller’s market, while a lower ratio implies a Buyer’s market.

With interest rates unlikely to climb significantly in 2019, affordable housing options and strong demand for the vibrant lifestyle offered in the area, the Western Region is poised to perform well throughout the coming year.

PEC Real Estate Market Update – January 2019

You would think that with the January we just had, complete with bone-chilling temperatures, mountains of snow, and treacherous roads, that most right minded people would stay safely cocooned in their homes, taking shelter from the elements, and waiting for some sign of a break in the frigid weather before venturing forth and thinking about real estate. According to the Quinte and District Association of REALTORS®, (“the Quinte Board”) however, that does not appear to be the case in Prince Edward County (“the County”). Rather, despite the fact that the County was particularly buffeted by winter storms, and a Polar Vortex that would not quit, the property was listed and sold in impressive numbers, highlighting once again what a robust market the County is, and how well positioned it is moving into 2019 to sustain steady and stable growth.

Specifically, 34 properties sold in January across the wards that comprise the County. That is just shy of 80% more sales that occurred last year when only 19 properties changed hands in January. Sales did not appear to be restricted to any one demographic or price group but rather reflected the diversity of both the market as well as buyers interested in investing in the County. This appears to be consistent with market trends and forecasts which give secondary markets the edge in performance for 2019 given their comparative affordability advantage (compounded by the challenge of higher debt loads, interest rates and the stress test), and the fact buyers are able to be more creative inflexible in their chosen domiciles be they primary, recreational or something in between with the advent of technology and more flexible working and living arrangements.

Due in part to a somewhat calmer market overall, inventory is up with 395 properties available for sale at month’s end compared to only 243 one year ago, but the number of new listings was down by almost 20% with 87 properties coming onto the market compared with 108 in January 2018. Accordingly, at this pace, it is likely that the market will tighten up even further unless there is a sudden increase in the number of properties coming onto the market.

Prices year over year, given the particular cross-section of sales recorded for January came in virtually on par with last year’s numbers, just under $400,000 ($397,734) compared to just over that threshold last year when it was recorded at $405,711, marking a negligible decline of under 2%. Interestingly, and consistent with these figures, the median price for properties selling in January in the County came in identical to last year with both being calculated at $365,000.

Potentially with a few more properties on the market and a slightly less frenetic pace which gave buyers more of a chance to consider their options and arrange for acceptable financing where appropriate, or potentially for no other reason than it was harder to get to properties while hurdling snow banks or contending with the bitter cold, the properties that did sell took on average 10% longer to sell, enduring 86 days on the market over the holiday and afterwards, as compared to 78 days on average the year previous.

Generally speaking, commentators are calling for a calmer, steadier year with consistent but more rational activity now that both buyers and sellers have had the opportunity to adjust to conditions that are less frantic than the roller coaster they have been riding over the last couple of years. The dominant challenge for the real estate market will continue to be affordability with buyers struggling with the challenge of balancing debt with higher carrying costs due to increasing interest rates and the effects of the stress test. As mentioned, however, the County is well placed to take advantage of steady demand and the desirable profile that it continues to enjoy, and the fact that the spotlight for 2019 continues to focus on secondary real estate markets as the top performers to watch.

Muskoka Real Estate Market Update – Year End 2018

It became obvious as 2018 wound down that the recreational market place was not immune to what was happening on the broader economic front. Throughout 2018 borrowers in the Toronto and area market place were reluctantly pulling in their horns, forced to do so by rising interest rates and borrowing costs, mortgage stress testing, and a 15 percent foreign buyers tax. By the end of the year Toronto and area sales had (on a year-over-year basis) declined by approximately 15 percent and average sale prices were off by more than 4 percent. It is anticipated that 2019 will be a year of sluggish sales and some moderation in average sale prices, particularly for higher priced homes. The same market scenario will likely play out in recreational property markets as well.

Interestingly sales volumes will to some extent by impacted by declining inventory levels. For example, in 2018, 1110 waterfront properties came to market in the combined Townships of Muskoka lakes, Bracebridge, Gravenhurst, Lake of Bays and Huntsville, almost a 10 percent decline from the 1224 properties that became available in these regions in 2017. It is even more concerning when 2018 inventory levels are compared to 2016 and 2015. During these years 1419 and 1594 recreational properties respectively came to market. Between 2015 and 2018 inventory levels have decreased by more than 30 percent.

On Muskoka’s big Lakes (Lakes Joseph, Rosseau and Muskoka) the same pattern has emerged. In 2015 there were 515 properties listed for sale on the big Lakes. This year that number tumbled to 332, a decline of over 35 percent. The same is true for Lake of Bays and the big Huntsville Lakes, although that decline has not been as dramatic.

Its not surprising that with declining inventories, sales have also declined. Combined in the Township of Muskoka Lakes, Bracebridge, Gravenhurst, Lake of Bays and Huntsville there were 684 recreational properties reported sold in 2017. In 2018 that number dropped to 565, a decline of more than 17 percent.

There was a similar decline in sales on Muskoka’s big Lakes. In 2017 there were 220 recreational properties reported sold, a number that declined to 165 in 2018. This represents a 25 percent drop in sales, which is consistent with the decline in inventory over the same period. On the basis of percentages, the decline in sales of properties having a sale price of $3,000,000 or more was greater than properties having sale prices lower than that.

It is interesting to note that not only were there few higher priced properties that sold in 2018, but it took longer for these properties to sell in 2018. In 2018 all properties in this category sold in 66 days. In 2017, which was a record year for the market, all recreation properties sold in only 59 days. Between 2014 and 2016, recreational properties in this price point sold, on average, in 73 days. Days on market in 2018, therefore, were consistent with historical norms. Although days on market increased between 2017 and 2018, there was no difference in the ratio between sale price and list price. In both 2017 and 2018 all properties sold at 95 percent of their original sale price.

The Muskoka and area recreational market place is varied and not homogeneous. As a result, it is difficult to determine what happened to average sale prices in 2018 with any accuracy, especially given the categories of properties that have sold and the numerous recreational locations. But evidence indicates that the average sale price for properties reported sold on Lakes Muskoka, Rosseau and Lake Joseph declined by 6.5 percent, from $2,211, 372 in 2017 to $2,069, 142 in 2018. If we include sales of properties (over $500,000) in the Lakes of Bays and Huntsville region, the decline in the average sale price is approximately 7.5 percent, from $1,994,810 in 2017 to $1, 843, 627. Interestingly, sales data of all recreational properties combined, which includes lower priced properties, indicates a substantial increase in the average sale price year-over-year. In 2017 the average sale price was $450,000, in 2018 the average sale price climbed to $650,000, an eye-opening increase of 38 percent.

What does all this market information tell us? It appears to be giving us the same signals that the market is projecting in the greater Toronto area. Lower priced properties are very much in demand and when available are selling briskly, putting upward pressure on prices. The urban equivalent would be condominium apartments. In the greater Toronto area average sale prices for condominium apartments increased by 11 percent. They are in demand primarily because they are affordable, even with the market pressures of increased borrowing costs and mortgage stress testing.

Under the prevailing economic landscape, the upper end of the market in the greater Toronto area has seen a considerable pull back, both in terms of sales volumes and average prices. The most recent data indicates a considerable decline in the sale of properties having a sale price of $2 million or more. In 2017, 3,435 properties were reported sold in this category. In 2018 only 2077 properties sold at this price point, a decline of almost 40 percent.  Average sale prices for this category of properties declined by 8%. Although property sales in recreational markets in this price point are discretional to a greater degree than urban markets, they will not be entirely immune to these market pressures.

Notwithstanding these turbulent conditions, Chestnut Park’s Port Carling office managed to beat market expectations by exceeding the next closest competitor brokerage office by more than 50 percent in dollar volume sales. Chestnut Park’s sales representatives were responsible for more than $250 Million in recreational property sales. Given the lack of inventory and the market pressures that have been discussed in this Report, this is a sterling performance.

As we go forward into 2019 the market challenges that have been discussed will continue to be at play. Next year will be a transitional year when less foreign capital, increased borrowing costs and stricter financing qualifications will impact the decision making of buyers and sellers. Added to these factors is the lack of inventory and supply in all price points, but especially properties having a value of less than $1.5 Million. As the year unfolds pricing will be the key to sales in the new normal that buyers and sellers of recreational properties will be adjusting to.

Toronto Real Estate Market Update – Year End 2018

There were no surprises in December. The year came to an end as expected. Higher borrowing costs and the new stress testing measures implemented at the beginning of the year are now a driving force in the Toronto housing landscape. The landscape is now one of moderating sales volumes and average sale prices, as was made evident in December’s resale data.

In December sales declined by more than 22 percent compared to last year. Last December 4,876 properties were reported sold by Toronto and area realtors. This year that number shrank to 3,781, the lowest number of December sales since the 2008 recession. December’s sales brought total sales for 2018 to 77,426, a decline of 16 percent from the 92,000 plus sales recorded in 2017, and more than 30 percent fewer than the 113,000 sales reported in 2016. In 2016 mortgage interest rates were half of what they are today, and borrowers did not have to qualify subject to rigid stress testing rules.

In December the average sale price for all properties reported sold in the greater Toronto area held up well, coming in at $750,180, 2.1 percent higher than the $734,847 average sale price achieved last December. On an annualized basis, however, Toronto’s average sale price declined by slightly more than 4 percent, from $822,000 last year to $787,000 in 2018.

The decline in overall average sale prices was driven primarily by the decline in sales and sale prices for Toronto and area’s more expensive properties. In December only 82 properties having a sale price of $2 Million or more were reported. Last December 116 were reported sold. In December 2016, 140 properties were reported sold in this price category. On a year-to-date basis, 2,077 $2 Million plus properties were reported sold. In 2017, 3,435 properties in this price category changed hands, an eye-popping 40 percent decline. It should be noted that the bulk of these sales took place in the first 4 months of the year before the Ontario Fair Housing Plan and increased interest rates took effect.

Notwithstanding these negative figures, the landscape for resale housing remains fractured. It could be argued that these negative numbers are due not only to higher borrowing costs and the stress testing measures but to a lack of supply. In December only 4,308 new listings came to market. Last December 6,289 new listings came to market, a decline of over 30 percent. Heading into 2019 there were only 11,431 properties in the greater Toronto area available for buyers, a decline of more than 11 percent compared to the almost 13,000 available properties last year at this time. Most of the available properties are located in the 905 regions of the greater Toronto area. In the City of Toronto, there are only 3,270 properties available to buyers. In fact, 72 percent of all available inventory is located in the 905 regions.

These inventory levels mean that there will be neighbourhoods, particularity in the City of Toronto, where demand far outstrips supply. This was evident in Toronto’s eastern neighbourhoods, (Riverdale, Leslieville, Beaches), were even in December all properties reported sold generated sale prices exceeding their asking price by more than 100 percent. Semi-detached properties in these neighbourhoods sold for more than 105 percent of their asking prices, and in just 11 days or faster.

The inventory shortage can be dramatically illustrated by looking at detached and semi-detached properties available for sale in the City of Toronto. At the end of December, only 377 new detached properties came to market, not many more than the 340 that sold in the month. The situation for semi-detached properties is even more severe. At the beginning of this year, there were only 154 active listings in the entire City of Toronto, only 38 more properties than the 116 semi-detached properties that sold in December. The situation for condominium apartments parallels the shortage of semi-detached properties.

These property shortages would normally result in substantial price appreciation. Normal however is no longer 2.5 percent ve-year fixed mortgage interest rates. Bank posted rates are currently 5.59 percent, and even if that isn’t the rate borrowers will have to pay, the buyers will, because of stress testing, be required to qualify at that rate. The disappearance of cheap and easy money is now driving the Toronto and area market place.

Looking forward, certainly, in the short term, there is nothing on the horizon that will see any dramatic changes to the current Toronto real estate market. Sales volumes will be lower than historic norms, and average prices will continue to moderate. Currently, unemployment numbers are at a 40-year low. Subject to stability in the mortgage markets, wages should start to rise beyond inflationary levels which with time will ease our prevailing affordability problems, which in turn should see moderate increases in sales volumes and to some extent in average sale prices. The process will be slow with both buyers and sellers at times adjusting painfully to the new resale landscape.

Prince Edward County Real Estate Market Update – Year End 2018

With the first few days of 2019 under our belt, we can now look back and see what an interesting and tumultuous year 2018 has been for the real estate market in Prince Edward County (“the County”). There is no question that this last year has definitely been a year of adjustment following the correction that occurred in the spring and summer of 2017 with the introduction of the Ontario Fair Housing Plan and related messaging from the provincial government that the overheated real estate market needed to be reined in. Moreover, subsequent contributing factors including a series of successive interest rate hikes and the imposition of the stress test which significantly tightened qualification requirements for financing had a marked impact on affordability, and combined to throw cold water onto the market, and restore a sober sense of reality to both buyers and sellers. Having said that, while sales are down across the County, much like most other real estate markets in Southern Ontario, the intricacies of the market are a little more complex and nuanced as buyer demand has remained remarkably strong and steadfast in the County as reflected by the impressively robust sale price trajectory that has continued to break new bounds and set new thresholds throughout the year.

The statistics published by the Quinte & District Association of REALTORS® (“the Quinte Board”) for December are further confirmation that 2018 marked a return to reality from the frenzied market experienced the preceding year, and to some extent can be characterized by regrouping, adjustment and taking stock. Sales were down over 46% from last year with only 15 properties changing hands compared to 28 in December 2017. With the year at an end, a compilation of the sales numbers for each month as reported by the Quinte Board shows that sales of properties across the County for all of 2018 totalled 532 which is 19% fewer than sold in 2017, the year previous. Clearly, that demonstrates a moderation in the market year over year, and is confirmation that the market correction that occurred in urban centres such as the Greater Toronto Area and neighbouring markets clearly had an impact on the County, but interestingly as suggested other market indicators qualify this conclusion or are evidence of ongoing strength and sustainability in the area.

Listings, for instance, remained in relatively short supply and there was little sign of distress selling in the market, or a rush to unload real estate in the County. Despite a year-end boost in listings with 60 properties coming onto the market in December compared to 35 last year in the same month, year over year there was only a 5% increase in new listings in 2018 with a total of 1240 compared to 1181 in 2017 when supply and inventory were remarkably tight. With the decline in sales, however, year-end inventory was up with 382 properties in the County available for sale compared to 207 last year at this time.

But price is probably one of the most interesting indicators as to the state of the County real estate market and stands as confirmation of stable interest and demand in the County. There was a dip in the average sale price in December coming in at $282,800 compared to $418,996 last year, constituting a drop of over 32%, but as discussed in previous market reports, in a smaller market like the County where only 15 properties changed hands, the particular cross-section of properties that sold in a given month inevitably has a disproportionate impact on the numbers, and results in larger statistical swings. When spread over the entire year, however, a clearer picture comes into focus. Despite a slower start to the year when three out of the four months of the first quarter registered a negative year over year price differential, each of the successive months for the rest of the year, (with the exception of December), racked up impressive price gains. This contributed to a boost in the annual average sale price of over 11%. Specifically, the average sale price for properties in the County for 2018, calculated on the basis of the average sale price reported for each month by the Quinte Board, came in at $422,732 compared to $379,445 for 2017.

Finally, those properties that did sell took only three days longer on average to sell (70 compared to 67) than they did last year when market conditions were much more heated and frenetic, and supply was even tighter.

All of these indicators taken together suggest that despite some calming and moderation over the last year, the County real estate market is stable and has legs going into 2019. Broader economic conditions continue to be generally favourable with positive economic output and job creation over the end of last year and extending into the new one. While the cost of borrowing is likely to continue to increase over the long term, (though potentially not as quickly as earlier anticipated), the County is well positioned to weather potential market upheaval given its relative affordability, and its status as a preferred destination to live and invest.