Resale housing market continues upswing, but still slower than long-term average

The Greater Toronto Area resale housing market continued its upswing as sales activity increased in May 2019, according to data from the Toronto Real Estate Board. 

In May 2019, there were 9,989 home sales reported through the MLS system, which is 18.9% higher than the same period the year before. TREB does note that May 2018 sales hit a 15-year low, and last month’s total sales is still below May’s 10-year average of 10,300 sales.

Sales growth spiked by double digits for all housing types, except condos. Semi-detached home sales jumped 27.9% year-over-year, followed by detached sales (25.1%), and townhome sales (22.8%). 

Condo sales only increased 6.4%, which is interesting because when you look at just the 905 area, condo sales increased 24.3%, which is more in line with the rest of the sales growth for other housing types. It’s the 416 area that actually had fewer sales, dropping 0.2% year-over-year with 1,739 sales. 

“After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing,” says TREB President Garry Bhaura.  “Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors. However, sales activity continues to be below the longer-term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales.”

New listings only increased 0.8% year-over-year with 19,386 properties coming to market in May 2019. With sales growth outstripping new listings, the resale market still favours sellers. 

The average selling price for all home types increased 3.6% to $838,540. The price growth was largely driven by the condo market and townhomes. The average price of a condo jumped 4.9% to $590,876, while townhome prices went up 3.2% to $665,967. 

“We are experiencing annual rates of price growth that are largely sustainable right now in the GTA – above the rate of inflation, but in the single digits,” says Jason Mercer, TREB’s Chief Market Analyst. “If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate. This potential outcome underpins calls from TREB and other housing industry stakeholders to address roadblocks preventing a more sustainable and diverse supply of housing reaching the market. Many households are not comfortable listing their homes for sale because they feel that there are no housing options available to better meet their needs.”

Average home prices increased across the board, with detached homes increasing 1.1% to $1,042,218, and semi-detached homes were priced at an average of $827,250, which is an increase of nearly 2%. 

“The GTA attracts people from all around the world to live and work. This is a competitive advantage for our region,” says TREB CEO John DiMichele. “However, all of these new households need a place to live, whether they choose to buy or rent. With this in mind, TREB feels that those parties vying for seats in the fall federal election need to put forth their positions on housing-related issues. Their positions should include ways in which the federal government could work with provinces and municipalities to increase the supply of rental and ownership housing. On top of this, federal parties should also state their position on housing affordability, including in the area of mortgage lending – a discussion that could include flexibility around qualification standards and amortization periods on insured mortgages.”