For the second month in a row, the Greater Toronto Area experienced double-digit growth in home sales. A total of 9,989 homes were bought, which was an increase of 18.9% from the same time in 2018. Further, sales increased by approximately 10% from the previous month.
While the increase in sales looks promising for Toronto’s real estate market, it is important to note that sales are still below the 10-year trend for the month, which is usually over 10,000 homes sold.
Listing Shortage Influences Competitive Market
The growth in sales sheds light on another struggle for Toronto’s real estate market. The number of new listings for May 2019 is virtually unchanged from the year-over-year level. This means that new listings are not keeping pace with the number of sales generated, revealing that sellers are less compelled to list their homes on the market.
Consequently, home prices have experienced a steady year-over-year increase of 3.6% to an average price of $838,540. The Home Price Index, which indicates the overall value of homes sold, reveals that home values have also rose, reaching approximately 3.1%. As a result, TREB believes that the price increases are sustainable.
In the City of Toronto exclusively, sales increased by 13% while new listings only increased by 4% from the year-over-year level. This has put upward pressure on the prices of homes.
Home Price Increases Ahead?
TREB’s Chief Analyst, Jason Mercer, warns that the main risks to the market continues to be a lack of supply. While price growth currently stands in a stable range, he points out that consistent imbalances could promote heating prices. This may also contribute to “buyer gridlock”, as sellers refrain from listing their homes on the market because they feel that better housing options are unavailable.
The pace of sales growth was most significant for detached and semi-detached houses, with increases of 25% and 27.9%, respectively. Condo apartment sales still experienced an increase as well, but it wasn’t as dramatic, at only 6.4%.
Condos Experience Biggest Price Jump
Nonetheless, price increases were strongest for multi-family housing. This illustrates that the affordability gap is closing as demand continues for the most affordable homes in the GTA. The average condo apartment price increased by 4.9%. Detached and semi-detached houses increased by a mere 1.1% and 1.9%, providing further evidence that these home types are out of reach for many.
Check out Zoocasa’s infographics below to learn how sales and price trends have changed year-over-year in the Greater Toronto Area: