The GTA real estate market continued to experience supply and demand issues throughout the month of June. Home sales surpassed new listings brought to market despite recent policies to cool things off, leading to hotter competition among home buyers.
Recent numbers from the Toronto Real Estate Board reported a substantial year-over-year increase in sales of 10.4%, with 8,860 homes changing hands last month. However, new listings of houses, condos, and townhouses for sale in Toronto have remained stagnant with 15,816 homes brought to market, a slight drop of 0.3%.
This has put pressure on prices, with average home prices reaching an average of $832,703, a jump of 3% from 2018. The value of homes, measured by the MLS home price index, followed a similar pattern as it rose by 3.6%.
Growth in the 905 Markets
A significant portion of the region’s growth occurred outside of the City of Toronto. In the 905 markets, sales experienced a 14.3% jump with 5,659 transactions taking place. A 2.2% decrease in new listings also caused average prices to increase by 2.1%, to $785,879. This pushed the sales-to-new-listings ratio (SNLR) to 54%, which is tighter than last year’s 46%, but still within a balanced range.
Growth within the 416 proved to be steady, as sales rose by 4.1% with 3,201 transactions taking place in June. New listings increased by a steady 3.4%, and average home prices jumped by 5.1% to $915,481. Market conditions remain roughly on par with last year as the SNLR clocked in at 59%, a mere 1% higher than 2018. This keeps it within the territory of a sellers’ market.
The total TREB area remains on the tighter end of balanced with a ratio of 56%, up by 6% from last year. This indicates that buyers are withstanding the policy-induced slowdown that resulted from the Ontario Fair Housing Plan and nationally mandated mortgage stress test.
Listing Shortage Tightens Market, says TREB
The board remains concerned about the lack of new home listings, especially among the region’s medium-density homes that usually fill the gap between entry condos and detached homes.
“Buyers started moving off the sidelines in the spring, as evidenced by strong year-over-year price growth throughout the second quarter” stated TREB’s chief market analyst, Jason Mercer. “However, because we saw virtually no change in the number of new listings, market conditions tightened and price growth picked up, especially for more higher-density home types, which, on average, are less expensive than traditional detached houses and therefore provide more affordable housing options under the new stress test regime”.
TREB’s CEO, John DiMichele, adds that as buyers absorb the impacts of the mortgage stress test, it will put pressure on the already tight condo market segment as they remain blocked financially from more expensive home types.
“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,” he suggests as a potential solution.
Sales and Price Trends for the GTA
Want to learn more about sales and price trends? Check out the infographics below which compare numbers among Toronto houses, townhouses, and condos:
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