The Toronto region’s housing recovery has yet to take hold in the most of the 905-area communities surrounding the city, despite modest third-quarter gains that saw the average home price across the GTA rise 0.4 per cent year-over-year to $836,402.
A report from Royal LePage predicts a 2 per cent Toronto region gain in prices in the last quarter of 2018, compared to its national forecast of 1.5 per cent.
The report Tuesday shows that growth in prices has leapfrogged over Toronto’s suburbs to other Ontario markets such as Kingston and Windsor, which both saw near 15 per cent third-quarter growth; Niagara-St. Catharines, which was up 8.4 per cent, and London with 7.6 per cent gain.
In the City of Toronto, home prices rose 5. 2 per cent year-over-year to an average price of $883,892.
Places such as Markham and Richmond Hill, where prices were overheated — in part due to higher rates of speculation — saw near 10-per-cent declines, with prices averaging $988,630 and $1.14 million, respectively, in the third quarter.
Mississauga was the only 905 community to see a modest year-over-year price gain — 1.3 per cent or $747,808 on average. However, neighbouring Oakville and Brampton each declined 2.1 per cent — to $1.1 million and $702,851, respectively.
In some of those same 905-area neighbourhoods last year, home prices saw dramatic increases of 27 per cent over the third quarter, said LePage CEO Phil Soper. Soper downplayed the impact of the correction on most home owners, who would not have been buying or selling in that period.
“Most people haven’t made any real estate transactions in the last 12 months. They gave up between 12 and 14 weeks of 2017 appreciation this year,” he said. “It’s a really modest reset for what was a significant over-reaching in home price inflation.”
The median price of a condo, which increased 9.3 per cent year-over-year in the third quarter to $561,733, helped buoy the City of Toronto’s gains.
Because they tend to be more affordable, and the mortgage stress tests have impinged on consumers’ buying power, condos remain popular. They also attract both first-time buyers and older consumers looking for a lifestyle change.
But Soper said he expects the gap will narrow between house and condo prices in the coming month.
Two-storey home prices in the Toronto region fell 1.8 per cent year-over-year in the third quarter to $974,399, compared to an 8.3 per cent boost in the average condo price to $513,546.
That is as big a gap as the area is likely to see for some time, said Soper.
“We believe the pace of condominium price increases won’t continue to outstrip that of other classes (of homes) indefinitely,” he said, adding that calmer conditions make fairer conditions for first-time buyers.
“With a combination of savings and borrowing and assistance from family, they can get ahead of a 2 per cent price increase,” he said. “They can’t get ahead of a 20 per cent price increase.”
The Canadian Real Estate Association Monday reported the average Canadian home cost $487,000 in September, an 8.9 per cent year over year drop and a 0.4 per cent decline from August. Toronto region prices were up 2 per cent in September compared to the same month last year to $765,400 on the Home Price Index.