The GTA real estate market continued to experience supply and demand issues throughout June. Home sales surged while new listings brought to market remained stagnant, despite market-cooling efforts put into place in recent years.
Numbers from the Toronto Real Estate Board documented a total of 8,860 transactions in June, marking a considerable 10.4% year-over-year increase. New listings, however, were virtually unchanged, with 15,816 homes brought to market – a dip of just 0.3%.
This has prompted price increases, with listings standing at an average of $832,703, a jump of 3% from sold prices in Toronto last year. The MLS Home Price Index also reported a home value increase of 3.6%. Much of this price growth was influenced by higher-density home types such as condos, townhouses, and semi-detached houses.
Growth in the 905 Markets
A large proportion of the region’s growth occurred outside of the City of Toronto, as sales boomed by 14.3% in the 905 markets with 5,659 homes changing hands. A small 2.2% decrease in new MLS listings also helped boost prices by 2.1%, to an average of $785,879. This has tightened overall buying conditions as the sales-to-new-listings ratio (SNLR) increases to 54%. This is tighter than last year’s 46%, but still within balanced territory.
Growth was less dramatic within the 416, with sales rising a steady 4.1% and 3,201 transactions taking place. New listings also rose – by a moderate 3.4% – and the average home price climbed by 5.1% to $915,481. Overall, the market still favours sellers with an SNLR reaching 59%, up by just 1% from last year.
The total TREB area has an SNLR of 56%, up by 6% from 2018, but remains within the realm of balanced. This shows that buyers are withstanding the slowdown that was prompted by the Ontario Fair Housing Plan and the mortgage stress test.
Increased Pressure on Condo Market, TREB Reports
TREB’s market analysts remain apprehensive about the prolonged shortage of new listings, especially among the region’s medium-density homes that typically fill the gap between starter condos and detached houses.
TREB’s CEO John DiMichele explains that as buyers overcome the affordability challenges presented by the mortgage stress test, it will continue to front-load the already tight condo market since more expensive home types, like single-detached homes, are out of reach. This will further limit the number of affordable entry points into the GTA market, even after homeowners have the chance to build equity.
“While some home buyers may have adjusted to the OSFI stress test by looking to more affordable housing options, this could present an issue over the longer-term because we aren’t adding a meaningful amount of new mid-density housing supply to bridge the gap between condominium apartments and detached homes,” he explained.
“Finding ways to add more mid-density housing types to existing neighbourhoods and new developments needs to be a key component of municipal, provincial, and federal housing plans and policies moving forward.”
GTA June Sales and Price Trends
Want to learn about sales and price trends in Toronto and the overall TREB area? Check out the infographics below to observe year-over-year patterns.
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