Orangeville 2018 Market Recap and 2019 Outlook

Market Recap 2018

Key Stats – Orangeville

• Number of Sales – 545 (down 20.55% from 2017)
• Average Sales Price - $541,420 (up 2.89% from 2017)
• Average Days on Market – 27 Days (up 50.00% from 2017)

Despite the overall sentiment around the real estate market of a decline from the hot start to 2017 the market performed well in 2018. The average sales price increased to $541,420 in 2018 versus $526,215 in 2017 a 2.89% increase. From an activity perspective 2018 was a slow year with 545 transactions the lowest level in over a decade. The average days on market remains short with the average of 27 days, this is an increase of 50% over 2017 but that is more a statement about the market in 2017 then anything else.

The main reason for the slow down in the number of transactions is the combined impact of the introduction of the mortgage stress test and the increase in mortgage rates during 2018. These two factors caused overall activity to slow down significantly.

The increase in the average home price is a result of continued strength in home prices in 2018 after a bit of a pull back in the second half of 2017.

Market Outlook 2019

The outlook for 2019 in the GTA, according to the Toronto Real Estate Board (TREB) is for prices to rise at a rate of 4.2% which would put the average price of a home in the GTA as a whole close to the 2017 peak levels and place the average house price in Orangeville at $564,160 in 2019. The number of transactions is expected to increase by 7.2% in 2019 for the GTA and when applied to out local market, the 584 transaction would make 2019 another relatively quiet year in real estate.

Overall this forecast is driven by the expectation of continued population growth in the GTA as a whole and an expectation by TREB that borrowing costs should remain flat or slightly lower in 2019 due to weakness in the Canadian bond market and uncertainty in the national economy with fluctuations in commodity pricing.

On the interest rate front most experts think that rates should remain unchanged in early 2019. The Bank of Canada has indicated that they feel rates are at an acceptable level for continued growth in the economy right now and would like rates increase to what they consider a “neutral level”, of between 2.5 and 3.5 percent from the current level of 1.75 percent. We may see the Bank of Canada return to rate hikes later in 2019 assuming the economy stays reasonably strong as a whole but economists seem to be split on the which way rates will go this year.

What does this mean for you?

Whether you are thinking of buying or selling in 2019 the market conditions will remain similar to 2018 the homes that are priced correctly in the market will sell fast and supply should remain low. 

The mortgage stress test will continue to put pressure on buyers and their ability to qualify for a mortgage. Which will adjust buyers’ expectations about the type of home they are looking to buy and will also cause more buyers to search for homes in locations outside of Toronto and York to find more affordable pricing.

There will continue to be more interest in the condominium and townhouse segment of the market as these properties are generally at a lower price point then the semi-detached and detached homes. That competition should continue to push prices for townhouses and condos higher in 2019.

Mortgage rates should remain relatively flat during 2019 and there will likely be a continued trend of rising rates into 2020. If you are thinking that 2019 is the year to enter the housing market mortgage rates are likely to remain around the current level most of this year.

If you have any questions about the real estate market or what all of this information might mean for you I’d love to have the opportunity to sit down with you over a cup of coffee the discuss your specific situation and needs.