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Brian Madigan LL.B., Broker
BRMadigan@Rogers.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Toronto and GTA Markets in June 2019

July 4, 2019 - Updated: July 15, 2019

Toronto and GTA Markets in June 2019


 

This is the recently released report of the Toronto Real Estate Board concerning the June 2019 results:

 

          GTA REALTORS® Release June 2019 Stats TORONTO, July 4, 2019 –

 

The new President of the Toronto Real Estate Board, Michael Collins, announced that Greater Toronto Area REALTORS® reported 8,860 sales through TREB’s MLS® System in June 2019, representing a 10.4 per cent increase compared to June 2018. Over the same time period, total new listings remained at a similar level for the month of June and active listings at month-end were down by 5.7 per cent.

 

Sales and new listings statistics for the first half of 2019 compared to the same period in 2018 painted a similar story to that of June. Sales were up by 8.5 per cent, while new listings were up by less than one per cent. This shows that sales accounted for a greater share of listings compared to last year, which means that competition between buyers increased, resulting in renewed price growth in many segments of the market.

 

“As I start my term as President of the Toronto Real Estate Board, I am proud to say that the Greater Toronto Area continues to grow, in terms of employment, population and overall diversity. As people are attracted to our region from all around the world, they obviously need a place to live. Over the next year, as demand for ownership and rental housing continues to grow, my hope is that we will see more movement from policy makers on two fronts: alleviating the constrained supply of housing and providing more flexibility around demand-side policies, including the OSFI two percentage point mortgage stress test and allowable amortization periods on insured mortgages,”

said Mr. Collins.

 

The overall average selling price in June 2019 was $832,703 – up by three per cent compared to the average of $808,066 in June 2018. Price growth was driven by the higher density market segments, including semi-detached houses, townhouses and condominium apartments.

 

 

The MLS® Home Price Index Composite Benchmark was up by a similar annual rate of 3.6 per cent. For the first half of 2019, the average selling price was $810,661, representing an increase of 2.4 per cent compared to the first half of 2018.

 

 

“Buyers started moving off the sidelines in the spring, as evidenced by strong year-over-year price growth throughout the second quarter. However, 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 houses and therefore provide more affordable housing options under the new OSFI stress test regime,”

said Jason Mercer, TREB’s Chief Market Analyst.

 

 

REVIEW


 

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
 

2018
 

$734,837              January 1st

$735,874              January 31st

$767,801              February    

$784,514              March

$804,926              April

$803,440              May

$808,066              June

$781,918              July

$765,252              August

$796,814              September

$807,538              October

$787,741              November

$749,580              December

 

2019
 

$749,580              January 1st

$748,469              January 31st

$779,694              February

$788,299              March

$820,601              April

$838,361              May

$832,703              June

 

 

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 $832,703, that’s an increase of $97,866 which is 13.32% increase over the eighteen month period. Expressed over 12 months, that’s an 8.888% 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 $832,703, that’s an increase of $102,231 which is 13.99% increase over the thirty (30) month period. Expressed over 12 months, that’s a 5.598% annualized increase.

 

So, as long as you didn’t buy in the Spring of 2017, the market produced a 5.6% annual return starting from the beginning of 2017, or an almost 9% rate of return from the beginning of 2018.

 

Why don’t we try the short term numbers for just 2019?  The calendar year 2019 started with $749,580 and we are now at $832,703, that’s an increase of $83,123 which is 11.09% increase over the six month period. Expressed over 12 months, that’s a 22.18% annualized increase. The market will now settle down and we would expect that same number to hold throughout most of the year which will bring the rate down to something less that 11% annually.

 

So, what’s the percentage rate of increase?

 

From 2017                     5.6%           calculated

From 2018                     8.8%           calculated

From 2019                     11%            estimated     

        

Volume of Sales

 

Month                  2019                     2018           Trend

January                3,974                      3,987          down

February              4,984                      5,148          down

March                   7,142                     7,188          down         

April                     9,016                      7,742         up              

May                      9,974                     8,402          up

June                      8,860                     8,024          up

 

Total                    43,950                  40,491        up

 

Last year the total sales for the first six months was 40,491, and this year it’s 43,950, or 3,459 more transactions representing an 8.54% 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.

 

COMMENT

 

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.


 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com


Tagged with: june 2019 treb prices sales activity
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

BRMadigan@Rogers.com

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