As we approach the winter months, the Greater Toronto Area’s resale market continues to tighten, which has led to aggressive price increases.
According to the Toronto Real Estate Board, there were 7,090 home sales reported through the MLS system, which is 14.2% higher than the same period a year ago. While sales were strong, new listings fell 17.9% and active listings came in 27.2% lower than November 2018.
“The Greater Toronto Area needs flexible housing market policies that will help sustain balanced market conditions over the long term,” said TREB CEO, John DiMichele, in a release. “All levels of government in Canada plus reputable international bodies have acknowledged that we have a housing supply problem. In 2020, policy makers need to translate their acknowledgment of supply issues into concrete solutions to bring a greater array of ownership and rental housing online. As always, TREB will be there to help policy makers in this regard.”
The strong sales activity and lower supply led to increased competition between buyers. The overall average price went up 7.1% year-over-year to $843,637.
“An increasing number of home buyers impacted by demand-side policies over the past three years, including the 2017 Ontario Fair Housing Plan and the OSFI mortgage stress test, have moved back into the market for ownership housing,” said TREB President Michael Collins. “Based on affordability and stricter mortgage qualification standards, many buyers may have likely adjusted their preferences, changing the type and/or location of home they ultimately chose to purchase.”
Though Collins points out that many buyers may have adjusted preferences, there were still 3,263 detached home sales, which is 23.8% higher than last year and nearly 50% of the total sales in the GTA for the month. The average price of a detached home in the GTA went up 3.5% in November to $1,044,138, maintaining its status as the most expensive housing type in the region.
The most affordable housing type is still a condo unit, but it experienced the strongest price growth, increasing 11.1% to an average of $617,658. The condo market was the only sector with double digit year-over-year average price growth. With 1,902 sales in November, the condo market came in a distant second behind the detached home market.
On a year-to-date basis, condos still have the strongest price growth, increasing 6.2% to $586,554. Detached home prices have barely changed this year, going up just 0.4% to $1,014,966.
“Strong population growth in the GTA coupled with declining negotiated mortgage rates resulted in sales accounting for a greater share of listings in November and throughout the second half of 2019,” said Jason Mercer, TREB’s Chief Market Analyst. “Increased competition between buyers has resulted in an acceleration in price growth. Expect the rate of price growth to increase further if we see no relief on the listings supply front.”
The City of Toronto recently announced its proposed $23.4 billion HousingTO 2020-2030 Action Plan to fight homelessness and improve housing affordability, and it looks like supply oriented solutions are in the works.