The Toronto Real Estate Board released its monthly resale market results, reporting a continuation of moderate price growth in the Greater Toronto Area.
The average selling price increased 3.5% year-over-year to $788,345, based on transactions reported through the MLS system in November 2018. The smallest price increase was in the detached home market, where the average jumped 1.3% to $1,008,768.
Townhomes saw an average price increase of 3.1% to $647,418; condo units went up 7.5% to $556,723; and semis had the greatest growth of 8.3% to $791,760.
"Home types with lower average price points have been associated with stronger rates of price growth over the past few months,” explains Jason Mercer, TREB's Director of Market Analysis. “Given the impact of the OSFI-mandated mortgage stress test and higher borrowing costs on affordability, it makes sense that the condo apartment and semi-detached market segments experienced relatively stronger rates of price growth in November, as market conditions in these segments remained tight or tightened respectively over the past year.”
There were 6,251 home sales in November 2018, which is 14.7% lower than the same month last year. TREB points out that there was an unusual spike in sales in November 2017 due to people buying before the “looming” stress test kicked into action in January 2018. Sales of all home types dropped from 14-16% across the board.
"New listings were actually down more than sales on a year-over-year basis in November. This suggests that, in many neighbourhoods, competition between buyers may have increased,” says TREB President Garry Bhaura. “Relatively tight market conditions over the past few months have provided the foundation for renewed price growth.”
While there was a significant drop in sales year-over-year, there was an even bigger drop in new listings. There were 10,534 listings in November 2018 compared to 14,260 during the same month in 2017.
"Housing supply remains a key issue in the GTA market. More specifically, an adequate supply and appropriate mix of housing types must be part of the conversation, as has been recognized by the provincial government in their consultation documents,” says TREB CEO John Di Michele. “Transit supportive and gentle density 'missing middle' housing should be a priority. TREB has commissioned research on these subjects and looks forward to sharing it at our Market Outlook Economic Summit on February 6, 2019, and as part of the provincial government's consultations, when results are available in coming months.”
Clearly, the stress test impacted sales this year and sales at the end of 2017. Recently, President of the New Home Buyers Network, Sam Reiss, as well as the executives and Mattamy Homes, suggested repealing the stress test in 2019 amid higher interest rates and high pricing.