Toronto and GTA Markets in July 2019
This is the recently released report of the Toronto Real Estate Board concerning the July 2019 results:
" GTA REALTORS® Release July 2019 Stats TORONTO, August 6, 2019 –
Toronto Real Estate Bord President Michael Collins announced that Greater Toronto Area REALTORS® reported 8,595 sales through TREB’s MLS® System in July 2019. This result was up by 24.3 per cent compared to July 2018. On a month-over-month basis, sales were up by 5.1 per cent, after preliminary seasonal adjustment.
New listings entered into TREB’s MLS® System in July 2019 were up compared to July 2018, but by a much lesser annual rate than sales, at 3.7 per cent. With annual growth in sales far outstripping annual growth in new listings, market conditions clearly tightened compared to last year. Active listings at the end of July were down by 9.1 per cent year-over-year, further reflecting tightening market conditions.
As market conditions continued to tighten in July, the average selling price increased by 3.2 per cent on a year-over-year basis to $806,755. The MLS® Home Price Index Composite benchmark was up by 4.4 per cent. Higher density home types continued to drive price growth, whereas detached home prices remained down in many communities throughout the GTA.
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. However, the single-detached market segment, which has arguably been impacted most by the OSFI stress test, has experienced a slower pace of price growth, with average detached prices remaining lower than last year’s levels in some parts of the GTA."
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
$749,019 January 1st
$747,515 January 31st
For those following these numbers on a monthly basis, please note that some of the recent sales numbers in 2019 have had to be restated. A few transactions may have fallen through and not closed as originally scheduled. Consequently, TREB deletes them and re-enters them in the proper month. That will throw the average prices off by a few hundred dollars.
Let’s do a quick analysis. 2018 started with $734,837 and we are now at $806,755, that’s an increase of $71,918 which is 9.78% increase over the nineteen month period. Expressed over 12 months, that’s a 6.18% annualized increase.
Let’s also go back to 2017 which was the year with the peak of the market and the sudden drop. 2017 started with $730,472 and we are now at $806,755, that’s an increase of $76,283 which is 10.44% increase over the thirty one (31) month period. Expressed over 12 months, that’s a 4.04% annualized increase.
Why don’t we try the short term numbers for just 2019? The calendar year 2019 started with $749,019 and we are now at $806,755, that’s an increase of $57,736 which is 7.71% increase over the seven month period. Expressed over 12 months, that’s a 13.21% annualized increase.
So, what’s the percentage rate of increase?
From 2017 4.04% calculated
From 2018 6.18% calculated
From 2019 13.21% estimated
Volume of Sales
Month 2019 2018 Trend
January 3,969 3,987 down
February 4,983 5,148 down
March 7,138 7,188 down
April 9,008 7,742 up
May 9,961 8,402 up
June 8,849 8,024 up
July 8,595 6,916 up
Total 52,503 47,407 up
Last year the total sales for the first seven months was 47,407, and this year it’s 52,503, or 5,096 more transactions representing an 10.75% increase.
This trend will put the pressure on prices. Buyers have obviously chosen to enter the market rather than continue to sit on the sidelines. Eliminating the stress test as lengthening the amortization periods would help too.
This looks like an attractive and balanced market for both Buyers and Sellers. Lightening up on the stress test (mortgage qualifications rules) and extending amortization periods will permit Buyers to get more house for the money they spend. That’s a political decision and we have a federal election coming up this October. This will be topical.
Detached homes are still the most popular and sought after in the marketplace. The problem is that they became just too expensive for the average buyer. You will see a resurgence in prices for detached homes over the next few months.
Brian Madigan LL.B., Broker