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Market Update for December 2017
Durham Region Association of REALTORS® (DRAR) President Dennis Roberts stated that the 2017 year-to-date value of all home sales in Durham Region totalled over $6.9 billion in dollar volume, a 3 per cent increase from 2016. “This is a direct reflection on Durham Region’s economy today,” said Roberts. Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 92,394 sales through TREB's MLS® System in 2017. This total was down 18.3 per cent compared to the record set in 2016.
The average selling price as we finished the year in December is $575,064, a 3 per cent increase from the $574.901 average selling price in November. December also saw a slight increase over the average of $570,957 during the same period in 2016. The market remained balanced in Q4, as it had corrected itself out in Q2 (April 2017) with the average selling price of $702,768. “Durham finished year end with a balanced market, which is good for both buyers and sellers,” said Roberts.
According to Syrianos, the average selling price for 2017 as a whole was $822,681 – up 12.7 per cent compared to 2016. This annual growth was driven more so by extremely tight market conditions during the first four months of the year. In the latter two-thirds of 2017, fewer sales combined with increased listings resulted in slower price growth. In December, the MLS® Home Price Index (HPI) Composite Benchmark was up by 7.2 per cent year over year, and the overall average selling price was up by 0.7 per cent year over year.
Inventory of new listings in Durham increased to 711 in December 2017; this represents a 73 per cent increase from the 411 in December 2016. Roberts also reported 545 residential transactions in December 2017, up slightly from 528 in December 2016.
"It is interesting to note that home price growth in the second half of 2017 differed substantially depending on market segment. The detached market segment – the most expensive on average – experienced the slowest pace of growth as many buyers looked to less expensive options. Conversely, the condominium apartment segment experienced double-digit growth, as condos accounted for a growing share of transactions," said Jason Mercer, TREB's Director of Market Analysis.
As of January 1, 2018 the new rule of the mortgage stress test will take effect and be applied to new uninsured and insured mortgages. This stress test has been put into place to ensure that the borrower will be able to pay the loan, especially if interest rates become higher. “We are waiting to see how this test will impact buyers in the market.” Stated Roberts.
"Much of the sales volatility in 2017 was brought about by government policy decisions. Research from TREB, the provincial government and Statistics Canada showed that foreign home buying was not a major driver of sales in the GTA. However, the Ontario Fair Housing Plan, which included a foreign buyer tax, had a marked psychological impact on the marketplace. Looking forward, government policy could continue to influence consumer behavior in 2018, as changes to federal mortgage lending guidelines come into effect," said Mr. Syrianos.