Sales in the Greater Toronto Area picked up rapidly over the last five months and are now outstripping new listings, leading to a tighter housing market in October and the likely for the months to come.
The Toronto Real Estate Board (TREB) reported 7,492 sales through MLS in October 2018, a 6-per-cent increase year over year. At the same time, there were only 14,431 new listings entered into MLS in October 2018, slipping 2.7 per cent year over year.
“Annual sales growth has outstripped annual growth in new listings for the last five months, underpinning the fact that listings supply remains an issue in the Greater Toronto Area.” said Jason Mercer, director of market analysis for TREB. “While the OSFI stress test and higher borrowing costs have kept sales below 2016’s record pace, many households in the Greater Toronto Area remain upbeat on home ownership as a quality long-term investment.”
Unless more supply is built, or sellers list en masse, Toronto is likely to see prospective buyers feeling pressure to bid high for the few properties that are available. TREB also calls on politicians to create policies that encourages more development, especially in the area of medium density housing.
Prices this October have already edged upwards, growing 3.5 per cent overall to an average property selling price of about $807,000.
But that disguises wide price disparity across TREB regions.
Houses for sale in Etobicoke, for example, sell for over $1.2 million while a condo in condos for sale in Mississauga, for example, goes for less than half that price, at an average of $442,007.
Overall, higher density housing like condo units have been outpacing lower density housing in price growth all year.
Condo prices rose 7.5 per cent year over year to $562,523. In comparison, detached houses rose just 1 per cent from last October, but are still almost twice as expensive at $1,019,416.
That’s likely because condos remain the only affordable options for Torontonians this year with higher interest rates and tighter mortgage lending rules, including a mortgage stress test.
TREB expects prices for both market types to see sustained price growth in the near-future, as long as the demand to live in Toronto remains higher than available places to live.
“…Many households in the Greater Toronto Area remain upbeat on home ownership as a quality long-term investment,” said TREB president Garry Bhaura. “A strong regional economy and steady population growth will continue to support the demand for housing ownership as we move into 2019.”
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