The busy spring market ended on a high note with Greater Toronto Area home sales increasing 10.4% in June 2019 compared to the same period last year.
The Toronto Real Estate Board released its monthly resale housing market figures, announcing that 8,860 sales were reported through the MLS system. When looking at the first half of the year, home sales are up 8.5% and new listings increased by less than 1%. That means buyer competition heated up in the first two quarters, which led to strong price growth.
“Buyers started moving off the sidelines in the spring, as evidenced by strong year-over-year price growth throughout the second quarter,” says Jason Mercer, TREB’s Chief Market Analyst. “However, because we saw virtually no change in the number of new listings, market conditions tightened and price growth picked up, especially for more higher density home types, which, on average, are less-expensive than traditional detached houses and therefore provide more affordable housing options under the new OSFI stress test regime.”
The average selling price in June 2019 was $832,703, which is a 3% year-over-year increase. The price growth is attributed to semis, townhomes, and condo apartments. Semis and condos in particular had the greatest price growth, increasing 5.3% to $830,015 and 5.2% to $590,274, respectively. Looking at the first six months of 2019, the average home price was $810,661, an increase of 2.4% year-over-year.
“While some home buyers may have adjusted to the OSFI stress test by looking to more affordable housing options, this could present an issue over the longer term because we aren’t adding a meaningful amount of new mid-density housing supply to bridge the gap between condominium apartments and detached houses,” says TREB CEO John DiMichele. “Finding ways to add more mid-density housing types to existing neighbourhoods and new developments needs to be a key component of municipal, provincial and federal housing plans and policies moving forward.”
While the average price of a detached home in the GTA fell 1.4% to $1,018,987, this housing type had the greatest sales growth, climbing 18.6% year-over-year with 4,225 sales in June. Though sales were up and the price fell slightly, detached homes are still well out of reach for many families in the GTA with an average price hovering above $1 million.
“As I start my term as President of the Toronto Real Estate Board, I am proud to say that the Greater Toronto Area continues to grow, in terms of employment, population and overall diversity,” says TREB President Michael Collins. “As people are attracted to our region from all around the world, they obviously need a place to live. Over the next year, as demand for ownership and rental housing continues to grow, my hope is that we will see more movement from policy makers on two fronts: alleviating the constrained supply of housing and providing more flexibility around demand-side policies, including the OSFI two percentage point mortgage stress test and allowable amortization periods on insured mortgages.”