Last year, the Greater Toronto Area’s housing market was in recovery mode with sales activity bouncing back from a rough 2018. This year, you can expect prices to heat up even more.
According to the Toronto Real Estate Board’s latest resale housing market report, there were 4,399 home sales in the GTA in December 2019, which is a year-over-year increase of 17.4%. The total sales for 2019 came in at 87,825, a 12.6% jump from the decade-low in 2018. Last year’s sales activity was in line with the long-term median annual sales.
“We certainly saw a recovery in sales activity in 2019, particularly in the second half of the year. As anticipated, many home buyers who were initially on the sidelines moved back into the market place starting in the spring,” said TREB President Michael Collins, in a release. “Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year.”
The greatest sales growth was in the detached home market, finishing 2019 with 40,317 sales, nearly 19% higher than the previous year. Condo sales only increased by 3%, making it the only housing type with single-digit sales growth.
Sales activity may have increased, but we can’t say the same about new listings, which were down 2.4% for the year. Supply continues to be a challenge in the GTA, and it doesn’t look like there will be any immediate solutions, so buyers will have to battle it out in a seller’s market. This will drive home prices up in 2020.
“Over the last ten years, TREB has been drawing attention to the housing supply issue in the GTA,” said Jason Mercer, TREB’s Chief Market Analyst. “Increasingly, policy makers, research groups of varying scope and other interested parties have acknowledged that the lack of a diverse supply of ownership and rental housing continues to hamper housing affordability in the GTA. Taking 2019 as an example, we experienced a strong sales increase up against a decline in supply. Tighter market conditions translated into accelerating price growth. Expect further acceleration in 2020 if there is no relief on the supply front.”
The average selling price of a home in the GTA in December 2019 was $837,788, up 12% year-over-year. The average selling price for all of 2019 was $819,319, an increase of 4%.
The greatest price growth was in the resale condo market with an increase of 6.4% to $587,959. The average price of a detached home in the GTA climbed just under 1% to $1,016,776. If you were holding out for detached homes to come in under the $1 million mark, 2020 may not be the year for you.
“TREB is committed to conducting and sponsoring evidence-based, empirical research on housing market and broader regional economic issues,” said TREB CEO John DiMichele. “We share this research in order to contribute to the policy debate. On February 6, 2020, TREB will be releasing its Market Year in Review and Outlook report, which will contain consumer polling results, market overviews and forecasts, and new third-party research on housing and the economy in the GTA.”
We’re eager to see what TREB forecasts for 2020. We already heard from Zoocasa, and they believe 2020 will heat up in sales and prices. We’re curious to see if TREB feels the same way and if this strong activity will be reflected in the new home market.