TREB noted sales were out pacing listings again
Penelope Graham
other
The Greater Toronto Area real estate market fell back into a familiar pattern of supply and demand imbalances in June, with surging sales well outpacing new listings levels despite market-cooling policies put into place over the last two years.
The latest numbers released by the Toronto Real Estate Board reported a total of 8,860 transactions last month, marking a strong 10.4% year-over-year increase. New listings, however, remained flat with 15,816 homes brought to market, a dip of -0.3%.
As a result prices continue to climb, with Greater Toronto MLS listings fetching an average of $832,703, an increase of 3% from last year. The MLS Home Price Index, which measures the value of homes sold, also rose by 3.6%. Much of the price growth was driven by higher-density market segments such as condos, townhomes, and semi-detached houses.
Boom Times in the 905 Markets
A good chunk of the region’s growth occurred outside of the City of Toronto, as sales boomed by 14.3% in the 905 markets with 5,659 transactions. A small -2.2% contraction in new listings also helped boost prices by 2.1%, to an average of $785,879, and steepened overall buying conditions to a sales-to-new-listings ratio (SNLR) of 54% – tighter than last year’s 46%, but still indicative of a well-balanced market.
Growth was more moderate within the 416, where sales rose a steady 4.1% with 3,201 transactions, new listings rose by 3.4%, and the average home price ticked up by 5.1% to $915,481. Overall, market conditions remain roughly the same as they were last year with an SNLR of 59%, from 58% in 2018 – just on the precipice of a sellers’ market.
Overall, the total TREB area remains on the tighter end of balanced with a ratio of 56%, up from 50% in 2018, indicating that buyers are increasingly returning after weathering the policy-induced slowdown that resulted from the Ontario Fair Housing Plan and federal mortgage stress test.
Lack of Missing Middle Supply Constrains Market, Says TREB Analysts
TREB’s market analysts say the board remains concerned about the sustained lack of new listings, especially in the region’s “missing middle” – medium-density home types that typically fill the void between starter condos and single-detached homes.
“Buyers started moving off the sidelines in the spring, as evidenced by strong year-over-year price growth throughout the second quarter,” stated Jason Mercer, TREB’s chief market analyst. “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 stress test regime.”
TREB’s CEO John DiMichele adds that as buyers overcome the affordability challenges presented by the mortgage stress test, it will continue to front load the already tight condo market especially as they remain priced out from more expensive home types. This will further reduce the number of affordable entry points into the GTA market and limit mobility, even after homeowners have the chance to build some equity.
“While some home buyers may have adjusted to the OSFI stress test by looking to more affordable housing options, this could present an issue over the longer term because we aren’t adding a meaningful amount of new mid-density housing supply to bridge the gap between condominium apartments and detached homes,” he stated.
“Finding ways to add more mid-density housing types to existing neighbourhoods and new developments needs to be a key component of municipal, provincial, and federal housing plans and policies moving forward.”
GTA June Sales and Price Trends
Check out the infographics below to see how sales and price trends have changed year over year in both the City of Toronto and total TREB area in June:
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