The GTA housing market experienced robust activity in July, as more prospective home buyers tapped into the market while new listings declined compared to July 2018.
The Toronto Real Estate Board (TREB) reported a total of 8,595 transactions over the course of July, marking a 24.3% year-over-year increase. Meanwhile, the number of new listings brought to market increased by a mere 3.7%. Buyers now find themselves on the edge of a sellers’ market, with a sales-to-new-listings ratio (SNLR) of 59%. This ratio, which measures the level of competition in a given market, is up by 10% from July 2018. This shows that there is an expanding supply and demand gap resulting in a 3.2% increase in average home prices, now reported at $806,755.
Undersupply Could Prompt Price Increases
John DiMichele, the CEO of TREB, voices concern over the lack of housing in Toronto. He explains that demand is high as buyers previously sidelined by the mortgage stress test are returning with renewed determination, and migration to the GTA is constant.
“While the OSFI mortgage stress test has clearly had an impact on the number of home sales over the last year and a half, for most GTA residents the goal of homeownership has not diminished,” he stated. “In fact, we’re seeing growing pent-up demand for ownership housing, especially as the number of GTA households continues to increase by 40,000 to 50,000 due to strong population growth.”
He fears that undersupply will push home values to unattainable heights, despite new initiatives from both the City of Toronto and the province to boost supply and offer relief.
Booming Sales in the 416 and 905
Increased sales activity was felt throughout the GTA, with the most notable growth experienced in the 905 markets. Transactions in these areas were up by 25% in July with 5,485 homes changing hands, outpacing a 2.8% increase in new listings, and pushing the average home price up 4% to $787,937. Buyer conditions were also reported to be balanced, with a SNLR of 56%.
In the City of Toronto proper, sales rose by 20.8% with a total of 3,110 transactions. While new listings increased by 5.5%, that’s not enough to manage the high demand. This puts the SNLR in sellers’ territory at 65%, and the average home up by 1.8% to $839,943.
Price Growth Among Condos, Townhouses, and Semis
The MLS Home Price Index, which measures the overall value of homes sold, also rose 4.4%. TREB, however, points out that the majority of price growth is happening in the multi-family segment, such as condos for sale in North York, while average prices in the area remain relatively flat. This indicates that the demand is strongest for the most affordable, entry-level home types.
TREB’s chief market analyst points out that the single-detached market segment, such as houses for sale in North York, have been impacted most by the mortgage stress test. As a result, they have been experiencing slower price growth.
Want to learn more about real estate trends in Toronto and the total TREB area? Check out the infographics below to see the year-over-year sales and price changes:
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