The last 2016 housing numbers are in, and they point to a pricier-than-ever year to come for Toronto homebuyers. The Toronto Real Estate Board’s December Monthly Resale Housing Market Figures report states 2016 sales broke records for the second consecutive year, with 113,133 homes sold over MLS. That’s an 11.8% year-over-year increase, with 8.6% growth seen in December—an extraordinarily strong month for the winter market.
A record 2016 for real estate
TREB reports its Home Price Index also increased to an average of $729,922 for all home types, up 21%. Prices continue to be driven by extremely tight supply with new and resale listings for sale hitting a decade-and-a-half low in the Greater Toronto Area (GTA), along with historically low interest rates and economic strength in the region.
“Price growth accelerated throughout 2016 as the supply of listings remained very constrained,” stated Jason Mercer, TREB’s director of market analysis, in a release. “Active listings at the end of December were at their lowest point in a decade and a half.” The number of new homes available for sale fell nearly 0.4% last year.
Detached house supply at 16-year low
Houses continue to be in demand, but sales are limited by how few are available. Only 12,354 were sold in the City of Toronto last year, just a 3.1% increase from the year before. Lack of supply also drove prices higher, with the average detached house now costing buyers $1,252,069. It’s also evident that these skyrocketing prices are forcing buyers to look to high-rise living as the only affordable entry point to the market: Condos saw the greatest sales growth with 20,860 units sold, a 19.9% increase.
Townhouses in Toronto also stayed within the realm of affordability for buyers, with an average price of $627,690.
Year-over-year sales and price change by home type
Source: Toronto Real Estate Board
Foreign buyers not a force in Toronto
TREB has also invested in measuring the impact of foreign buyers of Canadian real estate—considered the top “newsmaker of 2016” by Canadian Press—by issuing an Ipsos survey of its members. According to their findings, only 4.9% of transactions in the GTA can be attributed to out-of-country buyers. This is in line with previous reports from Fortis Research that found domestic investors play a much larger role than foreign ones in the Toronto market—unlike the Vancouver market, where recent rules limiting out-of-country purchases have caused dramatic market softening.
The real estate board will be revealing its full findings, along with its Market Year in Review and Outlook Report, on Jan. 31.