July brought some good news for the Toronto housing market as sales bounced 24.3% higher than a year ago.
Toronto Real Estate Board reported 8,595 sales through its MLS system, a 5.1% month-over-month gain after preliminary seasonal adjustment. Sales outpaced new listings, which gained 3.7% year-over-year while inventory tightened by 9.1% compared to July 2018.
TREB CEO John DiMichele says that, although the impact of the mortgage stress test remains, pent-up demand is growing as Torontonians are still keen to buy homes, especially with continuing population growth of 40-50K each year.
“As more and more households come to terms with the stress test and move back into the market in the coming months and years, they could suffer from a chronically under-supplied marketplace and an acceleration of home price growth to unsustainable levels. Fortunately, policy makers have acknowledged the housing supply issue and are working toward solutions,” he said.
Prices rise amid tighter market
The average selling price increased by 3.2% year-over-year to $806,755 and the MLS® Home Price Index Composite benchmark was up by 4.4% per cent.
The price growth continues to be driven by higher density home types while detached home prices remained down in many communities throughout the GTA.
“Broadly speaking, increased competition between buyers for available properties has resulted in relatively strong price growth above the rate of inflation for semi-detached houses, townhouses and condominium apartments. However, the single-detached market segment, which has arguably been impacted most by the OSFI stress test, has experienced a slower pace of price growth, with average detached prices remaining lower than last year’s levels in some parts of the GTA,” said Jason Mercer, TREB’s Chief Market Analyst.
Government helping supply
TREB president Michael Collins said he welcomed the City of Toronto and provincial government working to find solutions on the supply side.
“Based on Mayor John Tory’s motion, Toronto City Council gave City staff a strong mandate to report back on how to develop a greater diversity of housing options in traditional single-family neighbourhoods, including timelines. Similarly, we’ve seen the Provincial Government launch consultations to spur on, and speed up, the development of different forms of housing in conjunction with their ‘More Homes, More Choice’ Plan. TREB looks forward to working with the City and the Province to turn their initiatives into reality,” he said.