The Fall housing market is off to a booming start, according to the latest numbers released by the Toronto Real Estate Board. Year-over-year sales have surged by 22 per cent at 7,825 transactions, helping prop up the average home price by 5.8 per cent to $843,115, and the MLS Home Price Index, which measures the value of homes sold, by 5.2 per cent.
It’s an encouraging sign that the market continues to recover from the effects of the B-20 mortgage stress test and Ontario Fair Housing Plan regulations introduced over the last two years, though TREB points out sales remain 20 per cent below their peak in September 2016.
READ: The Cost Of Closing: Added Expenses Of Buying Real Estate In Toronto
Sales Continue to Outstrip New Listings
However, growth in the number of newly listed homes has been trending below that of sales for several months, prompting TREB’s analysts to caution of a brewing supply-and-demand gap. Just 15,611 homes were listed in September, down 1.9 per cent from last year.
As the board’s report states, “We have experienced multiple months this year wherein the annual rate of sales growth outpaced the annual rate of new listings growth, resulting in the overall number of active listings at month-end being well-below last year’s levels. This speaks to tightening market conditions and an accelerating annual rate of price growth.”
READ: National Debate To Tackle Hot Election Housing Issues
Government Needs to Amp up Supply, Says TREB
TREB President Michael Collins says the creation of new housing supply needs to be an increased focus of policy makers, especially as the election approaches.
“Demand for ownership housing increased throughout the spring and summer of 2019 compared to the very slow pace of sales experienced in 2018. That being said, many first-time buyers are still experiencing difficulty finding an affordable home,” he states.
“Federal parties vying for seats in the October election have pledged to alleviate affordability issues hampering first-time buyers with a variety of proposals. While these demand-side proposals are important, it is also important that all levels of government remain focused on promoting a sustainable supply of different housing types moving forward.”
READ: Political Promises Surrounding Housing Are Popular But Not Created Equal
Strong Growth in Both 905 and 416 Regions
Nearly all of the markets tracked by TREB experienced improvement in September. In the City of Toronto, including houses and condos for sale in downtown Toronto, North York condos and houses, as well as real estate in Etobicoke, East York, and Scarborough, a total of 2,995 homes sold, up 22 per cent at an average price of $913,096.
Mississauga condos and houses sold for a combined $763,451, up 3.8 per cent, while sales surged by 26 per cent in the municipality. Similar growth was seen in Brampton, Halton, and York Regions.
READ: Toronto Ranks Second For Cities Most At Risk Of Real Estate Bubble
Houses Most in Demand Among Buyers
One notable trend is the resurgence of demand for single-family detached houses, which took a tumble when the market softened two years ago. Jason Mercer, TREB’s chief of market analysis, says that buyers have always indicated houses are their preference, and are now increasingly able to pursue them as home buying budgets recover.
“It is interesting to note that market conditions for detached houses have tightened over the past year. In many of the regions surrounding the City of Toronto, detached price growth was above the rate of inflation on an annual basis,” he says.
READ: Buyer Beware: Flipped Houses Aren’t Always As Good As They Look
“Consumer polling conducted for TREB over the past few years has pointed out that many intending home buyers are still focused on ground-oriented housing. This points to a need for a greater diversity of housing types to bridge the gap between detached houses and condominium apartments.”
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 September:
