by J.S. Yao
on Friday, December 7th, 2018 at 4:35pm.
The month of November TREB Market Stats
The number of sales dropped by 14.7% compared to November 2017, why?
Last October (2017), OFSI announced a new stressed test that will take effect on January 1, 2018.
It means that after January 1, 2018, getting a mortgage approved will be a lot harder than before.
This drove up the demand for buying a home before the end of the year.
Now, with stress test already taking place and interest rate going up, the number of sales in November 2018 is 14.7% less from the previous year.
But, the average home price went up by 3.5% compared to November 2017, why?
There are less active listings compared with November 2017, which is down by 9.8%. Active listings = Listings on the market
More significantly, the number of new listings dropped by 26.1%, 14260 new listings to 10534 new listings in the month of November 2018 compared with 2017.
It simply means there are fewer properties listed, less to choose from for buyers. Why?
The new stress test is making mortgages harder to get approved for everyone including homeowners, led to homeowners who wanted to upgrade change their plans.
Also, there are short-term investors who bought their properties within the last two years can no longer make a profit from selling today (the current average price is about the same as October/November 2016).
What is the biggest change to the market after the stress test?
Rent for condos went up a lot
Bachelor/studio rent surged 10.9% from Nov 2017 to Nov 2018 ($1672 -> $1854)
One bedroom rent surged 9.5% from Nov 2017 to Nov 2018 ($1976 -> $2163)
Two bedrooms rent surged 8.3% from Nov 2017 to Nov 2018 ($2607 -> $2822)