Toronto Real Estate Market Watch 08/19
If there are any doubts that the sales cycle in Toronto’s real estate market has rebounded, July figures have proven the market is on the mend, for Toronto home sales and prices continued to move higher in July amid tight supply. Sales through TREB’s MLS topped out at 8,595 last month, but it was an impressive 24.3% year-over-year surge over July 2018. Moreover, on a month-over-month basis, July sales increased 5.1%. New listings in July 2019 also rose a moderate 3.7%! On a seasonally-adjusted basis, sales rose 5.1% from June, the most since the end of 2017, before harsher mortgage-lending rules were introduced.
The benchmark price, which accounts for the type of home sold, rose 4.4% to $800,900, driven by gains in the condo market, which is currently the largest prime mover for price gain. As we said in our last report, we are seeing the return of multiple offers on homes, mainly semis & condo units, due to the relative affordability to other types of homes currently in inventory. So what does this mean for the bigger picture?
“Broadly speaking, increased competition between buyers for available properties has resulted in relatively strong price growth above the rate of inflation for semi-detached houses, townhouses and condominium apartments,” Jason Mercer, the real estate board’s chief market analyst, said in a statement.
On the other hand, he said, sales of fully detached homes have been more affected by a stress test required for federally regulated mortgages and the average price for that category of housing was down 0.9% overall.
TREB CEO John DiMichele said there’s a growing demand for residential properties due to population growth, “as more and more households come to terms with the stress test and move back into the market in the coming months and years, they could suffer from a chronically under-supplied marketplace and an acceleration of home price growth to unsustainable levels,” DiMichele predicted.
“Fortunately, policy makers have acknowledged the housing supply issue and are working toward solutions.”