The Toronto Real Estate Board released its monthly resale housing market figures for June 2018, reporting some positive signs for the Greater Toronto Area.
In June 2017, the GTA’s housing market was heavily impacted by the province’s Fair Housing Plan, which caused sales to drop. Last month, TREB saw 8,082 sales reported through the MLS system, which is 2.4% higher than the same period the year prior. This is also a 17.6% increase from May 2018 to June 2018.
“Homeownership has proven to be a positive long-term investment,” says new TREB president Garry Bhaura. “After some adjustment to the Fair Housing Plan, the new Office of The Superintendent of Financial Institutions (OSFI) stress test requirement and generally higher borrowing costs, homebuyers are starting to move back into the market, with sales trending up from last year’s lows. Market conditions appear to be tightening, with sales accounting for a greater share of listings, as new listings have dropped compared to last year.”
The average selling price also went up, increasing 2% to $807,871. This is a 3.3% month-to-month increase. While the average price increased overall, the average price of a detached home fell 1.9% to $1,033,574, but sales increased by 5.5% to 3,589.
The housing type with the greatest year-over-year average price increase were condos, jumping 7.9% to $561,097. The price was high but sales actually dropped 5.3%, finishing the month with 2,234.
“The expectation is to see improvement in sales over the next year,” says Jason Mercer, TREB’s Director of Market Analysis and Service Channels. “Over the same period, however, it is likely that issues surrounding the supply of listings will persist. This suggests that competition between buyers could increase, exerting increased upward pressure on home prices. With a new provincial government in place and municipal elections on the horizon, housing supply should be top-of-mind for policy makers.”
Now that there’s a new provincial government and the municipal campaigns are heating up, TREB is stressing that housing affordability issues must be a high priority for all levels of government.
TREB states that one of the most pressing issues is the threat of new municipal land transfer taxes. Ipsos conducted a poll of 1,200 GTA residents recently and found that 77% support reducing the provincial land transfer tax and 68% support repealing it. 76% support reducing the Toronto municipal land transfer tax and 69% support repealing it.
“We look forward to working with the provincial and Greater Toronto Area municipal governments on effective ways to address housing affordability, namely increasing housing supply, especially ‘missing middle’ housing options (home types that bridge the gap between detached houses and condominium apartments), and reducing tax burdens like land transfer taxes,” says Bhaura.