November 2018 charts: A Nov/Dec sales slide

Here's your Toronto real estate market report for November. Condos in the 416 remained strong and houses seemed to pick-up with a few indicators as well.

Here's this month's Always-a-Bull-Market Corner, the always-bullish point of view of the TREB President, currently Garry Bhaura:

"New listings were actually down more than sales on a year-over-year basis in November. This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth."

TREB was calling it "moderate price growth," as the average GTA price was up 3.5% YoY and the HPI Composite Benchmark was up 2.7%. Fair enough. It's interesting that prices have remained afloat despite a big drop-off in volume this year (416 freeholds and condos combined are down 14.5% YTD).

Below is what I saw in November. As always, these are just selected highlights. The full set of market charts is available on SlideShare.

1) Big sales drop versus last November

The below chart measures 416 monthly sales versus the same month in the prior year. You can see there was quite a run from July 2013 to March 2018. In those 45 months, 44 of them were higher than the previous year. Then the Ontario Fair Housing Plan (and some common sense) happened in April 2017, and 15 months in a row were lower than the prior year. That streak ended in July with a +12.1% and for the 5 months of June to October, volumes were actually +2.4% over 2017. Then look at November's -13.4% (red below):

What gives? Well you can tell in the Seasonally Adjusted numbers below. (Read my explanation of what the seasonal adjustment is about here.) Note these are for the whole GTA, not just the 416. See how the November and December numbers last year are the highest sales numbers shown? That means they were REALLY GOOD for those months. Why so hot last year? Because buyers were tripping over themselves to get deals done to beat the OSFI mortgage stress tests that kicked in January 1st of this year. This year there's no rush, so the numbers are back down to middle of the pack (5th of 11 months this year on the adjusted basis).

But you also will notice (in the yellow shaded area) that the last three months have been getting worse compared to the prior month, and a little deeper each time, so that bears some watching.

2) Freehold market worst since 2008

On a couple of important measures, freehold (i.e. non-condo) sales are the worst in 10 years. I've been discussing weak sales in the freehold market for a lot of this year. Here's how each November looks since 1996:

The average November sales are 1,253 (median is 1,247). This is the worst November since the 754 back in 2008 and it was the second worst in the 23 year span shown. It's a similar story with Months Of Inventory:

It's the highest/worst since 2008, though not too crazy high above the average of 2.2 (median 2.0) and it's "only" the 6th worst November mark in the 23 year span. But as noted before, prices have remained fairly stable.

3) Same old same old

The overall story has remained so consistent this year. Key points:
- 416 recovering better than 905 (mostly dragged down by York Region, which is about 25% to 30% of 905 sales volume)
- Condo prices doing well, driven by low supply (on many measures is 3rd best condo year ever)
- Freehold volumes are bad (as shown below), but other stats are in line with normal recent seasonal ranges


As always, you will find the full set of market charts (for this month and prior) on my SlideShare.



► To share this post or to add your comments, scroll down a bit below.


About Scott Ingram CPA, CA, MBA

Would you like to make better-informed real estate decisions? I believe knowledge is power. For that reason, I invest a lot of time researching and analyzing data and trends in the Toronto real estate market. My Chartered Accountant (CPA, CA) side also compels me to dig a lot deeper into the numbers on individual properties my clients are interested in. The better the information you have, the better decisions you will make. If you're interested in talking about your real estate situation, call me or reach out via the Contact Me section of my homepage.

Your home is the single largest investment you'll make—trust it with an accountant.

There are no comments

Thank you! Your comment has been submitted and is awaiting approval.

Scott Ingram

Scott Ingram

CENTURY 21 Regal Realty Inc., Brokerage*
Contact Me