The Toronto Real Estate Board released its resale housing market results for March 2019, reporting steady sales and prices, though the market remained tight. TREB also continues to blame the mortgage stress test for slower sales.
There were 7,187 home sales in the Greater Toronto Area reported through the MLS system, which is nearly exactly the same as March 2018 when there were 7,188 sales. First quarter sales fell 1% year-over-year.
Resale conditions remained tight because new listings fell 5.1% for the month of March and by 1.5% for the first quarter. When listings slow down more than sales, it means there are fewer choices for buyers.
“The OSFI stress test continues to impact homebuyers’ ability to qualify for a mortgage,” says TREB President Garry Bhaura. “TREB is still arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed. The supply of listings in the GTA also remains a problem. Bringing a greater diversity of ownership and rental housing online, including ‘missing middle’ home types, should be a priority of all levels of government. TREB is happy to be taking part in the City of Toronto’s consultations for the Housing TO – 2020-2030 Action Plan, and will certainly be raising the supply issue during these discussions.”
The average price in March 2019 increased slightly by 0.5% to $788,335. For the first quarter, the average price went up 1.1% to $776,054. The only price drop in March was in the detached home market, which fell 2.1% to $984,782. Same goes for the first quarter, but when all three months are calculated, the average price of a detached home fell 2.3% to $973,400. While detached home prices have fallen slightly, sales are on the rise, increasing 2.8% for the quarter for a total of 7,085.
“Market conditions have remained tight enough to support a moderate pace of price growth,” says Jason Mercer, TREB’s Chief Market Analyst. “Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has also receded. This means that in many neighbourhoods throughout the GTA, we continue to see competition between buyers for available listings, which provides a level of support for home prices.”
The greatest price growth in March was in the condo market. The average price of a condo went up 1.6% year-over-year to $560,020, but sales dropped nearly 10% with only 1,965 units sold. This was the biggest drop in sales for all housing types. For the first quarter, the average price of a condo increased 4.5% to $557,377, and sales came in 6.8% lower than the year before with 4,731 units sold.
For the month of March, the biggest year-over-year increase in sales was in the townhome market, which spiked by 12.1% with 1,253 units sold, and the average price growth followed closely behind condos, rising 1.2% to $646,674. Clearly, some move-up buyers are choosing townhome life as opposed to unaffordable detached homes or larger condo units.
“While the City of Toronto’s recently announced Housing TO – 2020-2030 Action Plan is exciting and commendable, and TREB looks forward to contributing solutions as a Member of the External Advisory Committee, the recently proposed increase to the Municipal Land Transfer Tax on higher priced properties is problematic,” says TREB CEO, John Di Michele. “As the recent City budget process showed, the MLTT is not a sustainable revenue source from which to fund municipal programs. On top of this, additional MLTT on higher priced homes could have a trickle-down effect on the supply of homes throughout the housing price continuum.”
While sales are steady and prices increase slightly, TREB is condemning the stress test, saying resale supply is still too low, and that taxing $3 million-plus home sales is not a good idea. We’re interested to see how the typically busy spring season plays out.