New Report Suggest Homebuyers Might be in Trouble in Brampton
If you're hoping to purchase a home in Brampton, you might want to brace yourself or wait out the holiday season, as the market isn't in the buyer's favour right this moment.
Although recent data indicated that Brampton is neither a buyers' nor a sellers' market, November's market proved to be a tough one for those looking to purchase a home in Canada's ninth largest city.
The Toronto Real Estate Board (TREB) recently announced that the market continued to experience moderate price growth in November 2018.
The average selling price was up by 3.5 per cent year-over-year to $788,345.
In terms of sales, GTA realtors reported 6,251 residential transactions last month—that's down by 14.7 per cent compared to November 2017. However, TREB says the market experienced a surge of buyers attempting to get in before the implementation of the OSFI stress test in 2017 (a test that now requires buyers to qualify at higher rates than they'll ultimately be paying).
It looks like, as of now, there is a dearth of housing inventory on the market (a GTA-wide problem that's certainly not new).
“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," says Garry Bhaura, president, TREB.
"Relatively tight market conditions over the past few months have provided the foundation for renewed price growth."
Home sales in Brampton were slow last month—and prices are higher as a result.
"November has been slower overall for home sales in the Halton, Mississauga, and Brampton markets, but you wouldn't know it from the price growth that took place over the course of the month - as the supply of newly-listed homes has dropped year over year in each region, conditions have become more competitive for buyers, driving home values higher," says Penelope Graham, managing editor at the real estate brokerage Zoocasa.
Graham says that while much of this shrinking inventory is due to typically slower seasonal factors (we are closing in on Christmas, after all), the face of the housing market appears much different than it did in 2017, when the province's Fair Housing Plan and the OSFI stress test prompted buyers and sellers to act quickly.
"With less urgency to buy or sell a home this autumn, those looking to make a move are likely to put those ambitions on hold until after the holiday season," says Graham,
Graham says there's been a significant shift in market conditions in Brampton, which is now in firm sellers' territory after lingering at the lower end of balanced last year.
According to Graham, this is mainly due to a sharp decline in newly listed homes, down 31 per cent with 929 coming to market. That's effectively limited choice for buyers and has put upward pressure on prices. In fact, prices are up 4.5 per cent to an average of $685,812, despite a 17 per cent drop in home sales, with only 592 changing hands over the course of November.
The story on month-over-month prices is a little different in the 905 overall.
In terms of numbers specific to the entire GTA, a detached house in the 905 currently costs about $903,517 (down from $914,179 in October). A semi costs about $655,504 (a little down from last month's average price of $659,622), towns are selling for $613,846 (down from $621,564) and condos are costing buyers about $454,288 (down from $461,013 in September).
TREB says that on a preliminary seasonally adjusted basis, sales were down by 3.4 per cent compared to October 2018.
The downturn also affected prices across the entire region.
The average selling price after preliminary seasonal adjustment was down by 0.8 per cent compared to October 2018.
“Home types with lower average price points have been associated with stronger rates of price growth over the past few months," says Jason Mercer, TREB’s director of market analysis.
"Given the impact of the OSFI-mandated mortgage stress test and higher borrowing costs on affordability, it makes sense that the condo apartment and semi-detached market segments experienced relatively stronger rates of price growth in November, as market conditions in these segments remained tight or tightened respectively over the past year."
So, will there be more housing inventory going forward?
TREB says it's encouraged with the provincial government’s housing supply action plan.
“Housing supply remains a key issue in the GTA market. More specifically, an adequate supply and appropriate mix of housing types must be part of the conversation, as has been recognized by the provincial government in their consultation documents," says John Di Michele, CEO, TREB.
"Transit supportive and gentle density ‘missing middle’ housing should be a priority."
Di Michele is also pleased about the province's suggestion that Ontario extend the TTC subway system into the suburbs.
“TREB is also encouraged that the provincial government remains committed to public transit expansion. TREB has long advocated for improvements to the Greater Golden Horseshoe transit and transportation network, and feels the time is right to have a conversation about the level of provincial and municipal responsibility that would be the most efficient arrangement to realize subway expansion sooner in Toronto, and the GTA, as this will impact the housing market."