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For the year 2017, there were 92,394 sales through TREB’s MLS® System in 2017, which is down 18.3 per cent compared to the record set in 2016.

Record sales in Q1 were followed by a decline in Q2 and Q3 after the Ontario Fair Housing Plan (FHP) was announced. The pace of sales picked up in Q4, as the impact of the FHP started to wane, and some buyers arguably brought forward their home purchase in response to the new OSFI stress test guidelines effective January 1, 2018.

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.

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.

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Toronto area home sales rebounded by 12 per cent from September to October, pointing to a stronger fall market after a policy-driven pullback from a frenzied market that peaked earlier this year.

While the number of transactions was still down relative to last year's record pace, it certainly does appear that sales momentum is picking up.

The average selling price in October was $780,104, up less than one per cent from September but up 2.3 per cent compared with October 2016. Price growth was driven by appreciation in the townhouse and condo segments.

The average price of a townhouse in the GTA was up 7.4 per cent at $629,507, while the average condo price was $523,041 up 22 per cent year-over-year, the most of any housing type. Meanwhile, the average price of a detached home was down 2.5 per cent year-over-year at $1 million. Prices of semi-detached homes rose 6.3 per cent to $764.293.

Sales in the first 10 months of the year slipped to 80,198, down 19 per cent from the same period in 2016. Sales have dropped more than 10 per cent from the record set in March before Ontario announced its housing plan.

In addition, the Bank of Canada has raised interest rates twice in recent months to the current overnight rate of one per cent, signalling a clampdown on cheap borrowing and driving the big bank prime rates and the cost of variable-rate mortgages higher. The cost of new fixed-rate mortgages have also risen as yields on the bond market have also risen.

Meanwhile, the Office of the Superintendent of Financial Institutions will implement new lending guidelines at the beginning of next year Among the changes being considered is a requirement that homebuyers who do not require mortgage insurance still have to show they can make their payments if interest rates rise.(Buyers pls note: new mortgage stress test will be effective Jan 1, 2018)

The GTA's real estate market continued to cool off last month, with less homes selling and less homes being listed when compared with August 2016.

That decrease is only slightly less dramatic than July's numbers, which saw a 40 per cent year-over-year decrease.

Though the price is up when compared to last year, looking at the cost of homes in the last few months tells a different story, which has seen home prices in Toronto decreasing substantially beginning in the spring.

That could be related to the move taken by the Ontario government in April, when they introduced more than a dozen changes — including a 15 per cent tax on foreign buyers — in an effort to stabilize prices that were spiraling out of reach for many homebuyers.

That announcement may have had a "psychological impact" on buyers that led them to take a step back, though the expectation is that the number of people intending to buy remained high. 

Its unlikely the trend will last as more buyers jump into a market that has a smaller number of listings. 

The mechanism that could come into play is that we start to see more sales relative to listings again and that could lead to an accelerated pace of price growth.

Home prices and sales drop again in June. Although the market is still pretty hot, it is cooling down. Great news for prospective buyers, looking for valuable properties with more moderate price tags. Buyers can now breathe a sigh of relief, as it appears balance is returning to the market (at least for now). But those of you who are temporarily on the sidelines waiting to see the real impact, don't wait too long - as rates have already started to go up.

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