The changes introduced in the Ontario government’s Fair Housing Plan were designed to make a splash in the market—and the latest numbers from the Toronto Real Estate Board (TREB) may hint at their impact thus far.
New measures to stem foreign investment in the province, as well as discourage speculative investment and house “flipping” practices, are expected to help cool what has been blistering demand for Toronto real estate. While there has yet to be any relief for prices in the Greater Toronto Area—the average sale price still increased 31.7% across the TREB region last month to $920,791—buyers are enjoying more choice than they’ve had in months.
A 22.6% surge of new listings came to market in April, at 21,630 units. What’s notable is the majority of these homes are in the low-rise category—detached houses, townhomes, and semi-detached houses—where, until recently, supply has been extremely tight. The reversal suggests house owners may now feel it’s time to realize the return on their real estate, after sitting in their properties and enjoying several years’ worth of enormous returns.
By contrast, the number of Toronto condo listings stayed the same.
Sales dip following announcement
Overall, the number of sales in the TREB region dropped slightly—3.2%—but that’s not a sign of a market downturn, as the board assures the dip is due to the Easter holiday weekend, which landed in April this year. A total of 11,630 homes changing hands, 4,164 within the City of Toronto (at an average price of $943,947), and 7,466 within the so-called 905 region ($907,877).
Too soon to tell if measures will work
TREB president Larry Cerqua says that while these trend shifts could be due to the province’s new measures, it’s simply too soon to tell, adding that new supply would need to outpace sales for many months before the market could be considered balanced.
“The fact that we experienced extremely strong growth in new listings in April means that buyers benefitted from considerably more choice in the marketplace,” he said. “It is too early to tell whether the increase in new listings was simply due to households reacting to the strong double-digit price growth reported over the past year, or if some of the increase was also a reaction to the Ontario government’s recently announced Fair Housing Plan.
“It will likely take a number of months to unwind the substantial pent-up demand that has built over the past two years.” He adds buyers can sellers can expect to see annual price growth to remain much higher than that of inflation, especially as the market enters the spring and summer real estate season.
The price of a detached home remains above the $1-million mark, at $1,578,542 and $1,098,827 in the 416 (City of Toronto) and 905, respectively.
Condo sales rose 8% in the city proper, to an average price of $578,280, and 6.9% to $449,792 in the suburbs.