The Toronto Real Estate Board (TREB) released its monthly resale housing figures for October 2016, announcing a record high number of sales and that we should all expect prices to continue to grow in the Greater Toronto Area (GTA).
There were 9,768 sales reported through the MLS in October, which is 11.5% higher than the same period last year. The majority of the sales growth was in the condo market. Detached sales jumped about 10%, mostly in areas surrounding Toronto.
“The record pace of GTA home sales continued in October, with strong growth observed throughout the month,” says TREB President Larry Cerqua. “As we move through November and December, we will be watching the sales and listings trends closely, in light of the recent policy changes announced by the Federal Minister of Finance. TREB will once again be conducting consumer survey work, in order to report on home buying intentions for 2017.”
In case you somehow haven’t heard, the new policy changes to which Cerqua is referring include a “stress test” that will be applied to all insured mortgages to ensure the borrower can still afford the payments if rates increase. This mostly affects first-time buyers since they usually don’t have 20% saved for a down payment and all mortgages need to be insured if 20% isn’t put down.
The MLS Home Price Index Composite Benchmark increased by 19.7%. The average selling price went up 21.1% to $762,975. Every home type had double digit year-over-year price growth last month.
“New listings were up slightly in October compared to last year, but not nearly enough to offset the strong sales growth,” says Jason Mercer, TREB’s Director of Market Analysis. “This meant that seller’s market conditions continued to prevail as buyers of all home types experienced intense competition in the marketplace. Until we experience sustained relief in the supply of listings, the potential for strong annual rates of price growth will persist, especially in the low-rise market segments.”
The average selling price of a detached home in the 416 went up 21.7% to a staggering $1,303,339. That’s a high price, but he growth was even more significant in the 905 area; the average went up 29.4% to $948,191.
The largest sales growth was of condo units in the 905. There were 807 condo sales in the 905 last month, which is 28.3% more than a year ago. On average, condo prices in the GTA went up 12.5% to $429,407.
There have also been a lot of townhome sales since most families are being priced out of the detached market. There were 1,480 townhome sales in the GTA and the average price went up 20.2% to $586,413.
One interesting finding was that the sale of semis in the 416 actually dropped 9.5%. That’s interesting because there are many semis in the 416; the problem is that prices went up 20.6% to just over $900,000, and there are few people willing to pay that much for a semi.
It seems like the GTA’s resale market will stay hot through the winter, even if the weather gets chillier. Will more buyers turn to the new home market due to the lack of listings in the resale market?