Toronto and GTA Markets in April 2019
This is the recently released report of the Toronto Real Estate Board concerning the March 2019 results:
GTA REALTORS® Release April 2019 Stats TORONTO, ONTARIO, May 6, 2019 –
Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported a substantial year-over-year increase in home sales in April 2019. The number of residential transactions jumped by 16.8 per cent to 9,042 compared to 7,744 in April 2018.
On a preliminary seasonally adjusted basis, sales were up 11.3 per cent compared to March 2019. New listings were also up year-over-year by eight per cent. However, the annual growth rate for new listings was much lower than that reported for sales. This suggests that market conditions continued to tighten which points toward an acceleration in price growth.
“The strong year-over-year growth in sales is obviously a good news story and likely represents some catchup from a slow start to the year. TREB’s sales outlook for 2019 anticipates an increase relative to 2018. It should be noted, however, that growth in new listings is not keeping pace with sales. This points to the ongoing housing supply issue in the GTA. In this regard TREB welcomes the provincial government’s Housing Supply Action Plan announced last week to reduce red tape and improve the mix of housing types. TREB provided input on the Plan through submissions and participation on working groups,”
said Mr. Bhaura.
The year-over-year rate of price growth generally edged up in April relative to the first three months of the year. The MLS® HPI Composite benchmark was up by 3.2 per cent – the highest rate of growth in more than a year.
The average selling price was up by 1.9 per cent to $820,148, representing the strongest annual rate of growth so far in 2019. On a preliminary seasonally adjusted basis, the average selling price was also up by 1.1 per cent compared to March 2019.
Price growth continued to be driven by the condominium apartment segment and higher-density low-rise segments.
The average price for detached houses dipped year-over-year, specifically in regions surrounding the City of Toronto. The detached market segment, with the highest price point on average, has arguably been hardest hit by measures such as the OSFI stress test.
“While sales were up year-over-year in April, it is important to note that they remain well-below April levels for much of the past decade. Many potential home buyers arguably remain on the sidelines as they reassess their options in light of the OSFI-mandated two percentage point stress test on mortgages. Longer term borrowing costs have trended lower this year and the outlook for short-term rates, for which the Bank of Canada holds the lever, is flat to down this year. Unfortunately, against this backdrop, we have seen no movement toward flexibility in the OSFI stress test,”
said Jason Mercer, TREB’s Chief Market Analyst.
Here are the average sale prices as reported by TREB for single family homes of all types in the GTA, including houses, townhouses and apartments starting at the beginning of 2018 until now:
Average Prices Month
$734,837 January 1st
$735,874 January 31st
$749,580 January 1st
$748,447 January 31st
Let’s do a quick analysis. 2018 started with $734,837 and we are now at $820,148, that’s an increase of $85,311 which is 11.61% increase over the sixteen month period. Expressed over 12 months, that’s a 8.71% annualized increase.
Historically, an annual 5% increase was first recorded in the Doomsday Book (1086 tax roll) comparing values for the purposes of taxation to 1066. They found that property doubled in value every 20 years, that’s a 5% annual non-compounded rate of return.
The peak in 2018 was $808,066 in June. Last month, we thought that number was quite achievable. In fact, it last now been surpassed with the average price now at $820,148.
Traditionally, the height of the market each year is reached May 1st, 15th or 31st.
My expectation will be a rise in prices this year. Inventory is still quite limited, that means that there’s only one way for prices to go. We will also examine the individual markets in order to better focus upon the trends.
Relatively speaking, the market is steady. That’s generally quite good for both buyers and sellers.
Brian Madigan LL.B., Broker