The GTA real estate market continued to be plagued by supply and demand issues in June. Home sales surged while new listings brought to market lagged behind, despite market-cooling efforts implemented over the last two years.
Recent numbers from the Toronto Real Estate Board document a total of 8,860 homes changing hands in June, representing a significant 10.4% year-over-year boost. However, new listings of houses, condos, and townhouses for sale in Toronto have remained stagnant with only 15,816 homes brought to market, a slight drop of 0.3%.
It is no surprise that this has prompted increases in home prices. Toronto listings have reached an average of $832,703, an increase of 3% from 2018. Additionally, the value of homes has increased by 3.6%, according to the MLS Home Price Index.
Booming Activity in the 905 Markets
Much of TREB’s growth occurred outside of the City of Toronto, with sales increasing by 14.3% in the 905 markets. A small 2.2% drop in new listings also boosted prices by 2.1%, to an average price of $785,879. This has brought the sales-to-new-listings ratio (SNLR) to 54%, which is tighter than last year’s 46%, but still within a balanced range.
Moderate growth was observed within the 416, where sales increased by 4.1% with 3,201 transactions taking place. New listings also rose by 3.4%, and the average home price boosted by 5.1% to $915,481. Market conditions appear to be similar to last year, with a sales-to-new-listing ratio of 59%, remaining on the brink of a sellers’ market.
The overall TREB area remains in a balanced state with a ratio of 56%, a large increase from 50% in 2018. This shows that buyers are weathering the slowdown caused from the nationally mandated mortgage stress test and the Ontario Fair Housing Plan.
Medium-Density Home Shortage
TREB’s market analysts express concerns about the prolonged lack of new listings brought to market, especially among medium-density home types that often fill the gap between starter condos in downtown Toronto and single-detached homes.
Jason Mercer, TREB’s chief market analyst, stated, “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 homes and therefore provide more affordable housing options under the new stress test regime.”
John Michelle, TREB’s CEO, elaborates that as buyers face the affordability challenges presented by the mortgage stress test, it will continue to put pressure on the already tight condo market, especially as they remain blocked from more expensive home types. This will further limit buying options in the GTA market and reduce mobility, even after homeowners have the chance to build some equity.
He suggests that adding additional mid-density housing options to existing neighborhoods and new developments could aid in correcting the problem.
Sales and Price Trends for June
Want to learn more about sales and price trends? Check out the infographics below to learn about year-over-year changes in both the City of Toronto and total TREB area.
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