The Toronto Real Estate Board reports that prices rose just above inflation this May, 3.5 per cent to $838,540 year over year.
“We are experiencing annual rates of price growth that are largely sustainable right now in the GTA,” says Jason Mercer, market analyst at TREB.
TREB President Garry Bhaura adds, “After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing. Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors.”
As has been the case for about two years, apartment prices are outstripping single-family home prices. Condo apartment prices climbed 5 per cent to $590,876, while detached houses remained stable, edging up just 1 per cent to $1,042,218.
Meanwhile, in other parts of Ontario the housing markets remain uneven.
Waterloo prices, unlike Toronto, are soaring in the double digits.
Waterloo homes for sale increased 10.5 per cent year over year to $534,350.
In contrast, Hamilton prices barely budged, with properties on the Hamilton MLS increasing just under 1 per cent to $593,702. It’s unclear why some smaller cities near Toronto are experiencing such different scenarios regarding price growth. It’s likely that cities with stronger price growth also have a stronger job landscape.
Home prices in Toronto are unlikely to post such significant year over year gains as Waterloo, but are likely to increase somewhat due to a tightening of new listings. New MLS listings in Toronto increased just .8 per cent year over year, while sales skyrocketed almost 19 per cent. As long there are fewer sellers listing their homes than prospective buyers, prices are likely to accelerate.
TREB blames the snail pace of new listings on the fact that sellers feel there are few housing options available to meet their needs. Toronto has mostly small condo units or large detached homes, with a serious undersupply of “middle” housing. Boomers may be unwilling to downsize into a condo, but would be happy to move into a duplex or townhouse. Unfortunately, there’s a lack of diverse housing inventory. Until this issue is resolved, TREB says low supply will continue to underpin price growth in Toronto.
Check out the infographic below for more details on the May housing market.
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