2016 saw the largest increase to residential home prices since 1988 when the price increased from $189,105 to $229,635 (18% increase). The average price for a residential home in the Greater Toronto Area (GTA) increased by 17% to $725,857. A large portion of this demand came from foreign buyers entering the market for the first time. It is anticipated that this trend will continue in 2017 as foreign buyers continue to be more active in the GTA and surrounding areas. In addition to this, move-up buyers looking for single-family detached homes in Toronto, Markham, Unionville, Stouffville and surrounding areas have also contributed to the increase.
With approximately 99,354 real estate transactions between January and October this year we saw the average home staying on the market for 1.1 months. This is considerably lower than the 15-year average of 2 – 3 months in the GTA. Policies around building on the Ontario Greenbelt continue to effect these inventory numbers as developers are not able to meet the demands of the market.
First time buyers continue to play an important role in York Region and the GTA. Most are young professionals or young families looking to enter the market by purchasing a condo, where they can find affordability and maintain a reasonable commute by staying close to the city. Because of this, demand remains highest for 2 bedroom condos near transit, particularly within older developments that offer over 1,000 square feet of space.
The luxury homes market performed very well in 2016 with single-family detached homes being sought after, particularly from foreign buyers. With the Baby Boomers looking to down size, the upper end of the market will be more readily available in 2017 due to added inventory.
What does this all mean?
RE/MAX has forecasted that the average price of a residential home in the GTA is expected to rise by 8% in 2017. This is Great News! We are bullish on the 2017 market here at Benczik Team Realty and we are looking forward to a very strong market place. Markham, Unionville, Stouffville and surrounding areas will be in high demand and we are expecting inventory levels to remain low. With foreign buyers, low interest rates and a relatively stable economy we expect multiple offers on home sales to be par for the course in 2017. Another variable to consider is our neighbours south of the border. It has been noted that the United States plans on increasing its interest rates 3x in 2017. This should have a moderate effect on interest rates in Canada, however it will not be enough to cause the market to shift from a strong seller’s standpoint. In fact, we expect pressure on the Canadian dollar to cause foreign buyers to have even easier access to Canadian real estate.