How to Make Sense of all of the Toronto Real Estate Market Predictions for 2018


Depending on which real estate article you read real estate prices are going up, down or staying the same…someone has to be correct!

2017 saw a bit of a roller coaster ride in the Toronto market with prices starting off strong at the beginning of the year, flattening in the summer months with the market anticipating reaction to the Foreign Buyers Tax and a slow increase in December’s activity. Everyone seems to agree that the first part of 2018 is likely to see a cooling of the market as the new rules (the new stress test for uninsured mortgage borrowers) come into effect along with the anticipated hike in the overnight lending rate by the Bank of Canada. What is going to happen afterwards is where opinions differ…

  • Royal Lepage is forecasting a 6.8% increase in Toronto area housing prices next year with starter homes – particularly condos – expected to be in high demand again.
  • Re/Max forecasts no change in home prices in the GTA in 2018 compared with 2017 and Bullpen Research and Consulting president Ben Myers says that he feels the resale market is going to be fairly flat overall.
  • Interestingly, the Canadian Real Estate Association predicts that prices in Ontario will drop by 2.2% in 2018.

There are a number of factors that will affect home prices in the GTA for 2018:

  • The lack of housing supply given the pent up demand by buyers waiting on the sidelines to see how the market is moving…millennials reaching home buying age, immigration into the city (there are 150,000 to 200,000 people moving to Toronto annually), downsizers – in less than 20 years 1 out of every 4 people will be over 65 in the city of Toronto and many of them are choosing to move to a smaller home. Tight supply will force prices up over the long run.
  • New financial regulations and rising interest rates – the new regulations affect both move up buyers who can’t qualify for the financing to purchase the housing that they want and delay putting their existing house on the market and first time home buyers who may have to wait a little longer to save for a larger down payment or wait until their income increases. Rising interest rates pose a higher risk with household debt as a share of income hitting a record highs, some economists and consumer advocates are worried we will find it hard to shoulder debt at a higher cost. This will put a downward pressure on property prices.
  • Our strong healthy economy, political and financial stability make Toronto and Canada in general interesting to global investors driving prices up here.

My feeling is that the fundamentals are there for strong price growth for real estate overall in the GTA for 2018. The market will start out slow as buyers respond to the impact of the higher stress-test hurdle to qualify for mortgages but the economy and buyer demand will push up prices in the long run.

If you would like more information, please contact me at 416-834-3688 or

Leave a Reply

Your email address will not be published