December 7, 2018 | Market Update
In the GTA, there were 6,251 residential real estate transactions during the month of November. The average selling price for a home was $788,345. While sales have dropped year-over-year, the average selling price has risen.
In highly promising news, the Toronto Real Estate Board (TREB) is encouraged by the steps that policy-makers have begun taking to address supply issues in the market.
Prices up, sales down
The average home price rose in the GTA last month, reaching $788,345. This number represents a 3.5 per cent increase from the same month of 2017. Put simply, there’s been moderate price growth year-over-year. The largest increases have occurred with regard to home types sold at lower average price points.
While the growth in sale prices is encouraging, the overall number of completed transactions was down. There were 6,251 sales in the GTA last month, representing a drop of 14.7 per cent year-over-year. It’s worth noting that sales also fell month-over-month, but not as much. On a preliminary seasonally adjusted basis, sales were down by 3.4 per cent from October of 2018.
Increased competition
The decrease in year-over-year sales can be largely attributed to the psychological effects that the OFSI stress test had on buyers. An influx of purchases completed before the test made last November’s numbers higher than they otherwise might have been.
While sales were down this November, there were strong signs that competition increased between GTA buyers—at least in some areas in the region. Most notably, new listings in the market decreased more than sales (on a year-over-year basis). TREB President Gary Bhaura remarked that relatively tight conditions over the past several months have created the right environment for price growth.
Positive policy developments
John Di Michele, CEO of TREB, noted that the provincial government is making major strides toward addressing housing supply issues. Policy-makers have begun public consultation regarding an appropriate action plan.
“[A]n adequate supply and appropriate mix of housing types must be part of the conversation, as has been recognized by the provincial government in their consultation documents,” said Di Michele. THE CEO also noted that TREB looks forward to sharing its own research and insights on the subject during the ongoing consultations.
In addition to its commitment to improving housing supply, the provincial government continues to work toward expanding transit services. TREB has long maintained that improving public transportation will have a major positive impact on the housing market. “[T]he time is right to have a conversation about the level of provincial and municipal responsibility that would be the most efficient arrangement to realize subway expansion sooner in Toronto, and the GTA” said Mr. Di Michele.
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