Home sales in the Greater Toronto Area stayed below 2017 levels by double digits in May – but there are signs the market is starting to even out from the impact of the Ontario Fair Housing Plan, reports the Toronto Real Estate Board.
Home sales throughout the region tracked by TREB clocked in at 22.2 per cent lower than last year at 7,834 transactions. However, compared to the sub-30-per-cent declines recorded in February, March, and April, it’s a substantially smaller gap.
TREB’s analysts point to a combination of seller hesitation and shrinking inventory of Toronto homes for sale as contributors to seasonally slow activity; according to a poll conducted by the board, seller intentions have declined considerably since autumn. Some sellers may be waiting out lower home prices, while others may be frustrated by a lack of “missing middle” housing.
“Unfortunately, many home buyers are still finding it difficult to find a home that meets their needs,” says TREB President Tim Syrianos, who points to Canadian Centre for Economic Analysis research that finds the majority of Ontarians are over-housed, with five million extra bedrooms throughout the province.
“These people don’t list their homes for sale, because they feel there are no alternative housing types for them to move into,” Syrianos says. “Policy makers need to focus more on the ‘missing middle’ – home types that bridge the gap between detached houses and condominium apartments.”
Higher Home Prices Could Be On the Way
However, fewer homes to choose from has in turn stoked competition among buyers, which will eventually result in rising prices, says Jason Mercer, TREB’s head of market analysis.
“Market conditions are becoming tighter in the Greater Toronto Area and this will provide support for home prices as we move through the second half of 2018 into 2019,” he says. “There are emerging indicators pointing toward increased competition between buyers, which generally leads to stronger price growth.” He adds that, in the City of Toronto, homes of all types sold either at, or above, asking throughout May.
Condos Lead Market Growth
As has been the case all year, condos were the only housing type to post annual price gains, up 5.7 per cent to an average of $562,892. Prices for detached Toronto houses, however, saw sales fall 28.5 per cent, and semi-detached homes by 29.4 per cent throughout the TREB markets.
Townhouses posted the smallest annual sales decline at -13.4 per cent, though activity was up 1 per cent from April, with prices falling 2.5 per cent to an average of $640,543 – a month-over-month decrease of 0.7 per cent.
Check out the infographic below for year-over—year and month-over-month May sales trends for the City of Toronto and Greater Toronto Area: