Photo: James Bombales
The GTA housing market has gotten off to a frosty start in 2018, with housing prices and sales falling in the first two months of the year. But as the market continues to cool, some Toronto neighbourhoods stand to lose more value than others, according to one expert.
In a recent report, CMHC deputy chief economist Aled ab Iorwerth writes that Toronto’s luxury single-family detached homes could see prices take a dive in 2018, after a red-hot 2017.
After climbing for the first nine months of 2017, sales and prices of Toronto single-family homes have been steadily dropping, as the market adjusts to the effects of new mortgage rules and an interest rate hike.
Neighbourhoods such as the Bridle Path, where the average sale price for a home in 2017 was $2.6 million, could see their value decrease as the market cools.
But not everyone thinks the luxury real estate market should brace for a price decline. According to Toronto-based realtor Ralph Fox, while sales may be slowing, prices are unlikely to significantly decrease.
“If you look at the market, prices are holding and sales are dropping,” Fox tells BuzzBuzzNews. “It’s all about the economy at this price bracket — its holding steady, so people who can afford to make this kind of investment aren’t going anywhere.”
Fox cautions against comparing year-over-year sales numbers, saying that last year’s record sales will provide a skewed comparison.
“This time last year was an outlier,” he says. “Sales volume is going to look very different in comparison, and that might seem scary. You’re going to see a huge drop. But as the year continues, things will start to balance out again.”
The GTA market — luxury detached homes included — began to balance out last April after the introduction of the province’s Fair Housing Plan. Fox predicts that year-over-year sales comparisons will start to look more normal heading into the second half of 2018.
“As long as the economy stays strong, I don’t think the luxury single-detached neighbourhoods have anything to worry about,” he says.