Spring is typically a busy season for the housing market, and unlike last year, it looks like activity in the resale market is actually heating up.
The Toronto Real Estate Board released its resale housing market figures for April 2019, reporting a significant increase in year-over-year sales. In April, there were 9,042 home sales in the Greater Toronto Area reported through the MLS system, which is 16.8% higher than the same period last year. This is also 11.3% higher than the amount of sales in March 2019.
The majority of the sales in April were of detached homes, amounting to 4,173 transactions, which is a 21.9% year-over-year increase. Semi-detached and townhome sales activity increased by more than 20%, and there were 2,357 condo sales (up 6.7% from last year).
“The strong year-over-year growth in sales is obviously a good news story and likely represents some catch-up from a slow start to the year,” says TREB President Garry Bhaura. “TREB’s sales outlook for 2019 anticipates an increase relative to 2018. It should be noted, however, that growth in new listings is not keeping pace with sales. This points to the ongoing housing supply issue in the GTA. In this regard TREB welcomes the provincial government’s Housing Supply Action Plan announced last week to reduce red tape and improve the mix of housing types. TREB provided input on the Plan through submissions and participation on working groups.”
New listings were also up 8% year-over-year, but the rate of growth was slower than sales growth, so tight conditions remain in the GTA housing market.
The overall average selling price increased 1.9% year-over-year to $820,148. This is the strongest annual price growth recorded this year. April’s average price is also 1.1% higher than the average home price in March 2019.
The strong price growth was largely driven by the condo market, which spiked by 5.1% to $588,168. The only housing type to see a decrease in average selling price was detached homes, falling 1.3% to $1,018,147. Despite the price drop, the average price of a detached home is still much higher than many families in the GTA can afford.
“While sales were up year-over-year in April, it is important to note that they remain well-below April levels for much of the past decade,” says Jason Mercer, TREB’s Chief Market Analyst. “Many potential home buyers arguably remain on the sidelines as they reassess their options in light of the OSFI-mandated two percentage point stress test on mortgages. Longer term borrowing costs have trended lower this year and the outlook for short-term rates, for which the Bank of Canada holds the lever, is flat to down this year. Unfortunately, against this backdrop, we have seen no movement toward flexibility in the OSFI stress test.”
The condo market was busy on the rental side too. Year-to-date condo apartment leases of one-bedrooms increased 10.2%, while leases of two-bedrooms went up 9.7%. The average YTD rent for a one-bedroom increased 7.3% to $2,150 and went up 4.1% to $2,815 for a two-bedroom unit.