August 8, 2018 | Market Update
In line with Toronto housing market developments in June, home sales and prices continued to rebound in July. On the whole, growth for the month was strong—an encouraging development. That said, the number of new listings on the market was low, underscoring the fact that housing supply is an ongoing challenge.
Sales are getting stronger
Market activity increased last month. According to TREB, there were a reported 6,961 residential sales–a figure that represents an 18.6 per cent increase from July of last year.
While sales growth was certainly encouraging, it wasn’t the only sign that the market is rebounding. The average selling price was $782,129, nearly 5 per cent higher than it was in July, 2017.
From a month-over-month perspective, the numbers were also promising. Compared to July of last year, last month’s prices were up 6.6 per cent. Price wise, the increase totaled 3.1 per cent. TREB also noted that the seasonally-adjusted average sales price was the highest it’s been since May of 2017.
Supply still an issue
While there were several positive developments in the market this July, housing supply was down. On a year-over-year basis, new listings decreased by 1.8 per cent.
The supply issue is nothing new. In an ongoing trend, many Torontonians are living in houses that have a surplus of bedrooms. Often, they don’t list their homes due to a perceived lack of housing alternatives. A recent study from the Canadian Centre for Economic Analysis explores the problem in detail.
In TREB’s July update, President Garry Bhaura weighed in on the issue. “[P]rovincial government and candidates for the upcoming municipal elections need to concentrate on policies focused on enhancing the supply of housing and reducing the upfront tax burden represented by land transfer taxes, province-wide and additionally in the City of Toronto,” said Bhaura.
Buyers moving back in
While supply looms large in the minds of housing market analysts, there’s reason to be optimistic. Following a market downturn that started over a year ago, July marked the second month in a row that transactions and sale prices were up.
There’s no denying that the Fair Housing Plan and changes to the mortgage-lending landscape have had an impact on home buyers. Fortunately, it seems that many buyers who have been holding off on making a purchase are returning to the market.
Jason Mercer, TREB’s Director of Market Analysis, has noticed an increase in demand this summer. “Home buyers in the GTA recognize that ownership housing is a quality long-term investment,” said Mercer.
The bottom line: market improvement is poised to continue. That said, policymakers should be thinking about what steps they can take to help tackle the issue of supply.
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