SEPTEMBER’S TIGHTER CONDITIONS: WHAT’S HAPPENING IN THE MARKET

According to the Toronto Real Estate Board (TREB), there were 6,455 home sales reported in September. The average selling price was $796,786. These figures reflect an increase in home sales and prices from September of 2017. Last year, buyers moved to the sidelines due to housing policy and lending rule changes. The market began rebounding in May, and it’s encouraging to see that the year-over-year numbers are still up. That said, the number of new listings are down. Here’s what that means for buyers and sellers in the GTA.

Conditions tightening

In September, home sales rose 1.9 per cent from the same month of last year. Notably, detached house sales grew by 4.6 per cent—an increase that demonstrates a continued renewal in demand for this type of housing. Home prices also grew, rising by 2.9 per cent. In contrast, new listings were down 3.1 per cent. Many real estate insiders expected an influx in new listings after Labour Day, but that didn’t occur.

Buyers have shown increasing interest in homeownership over the course of the last few months, but market conditions are getting tighter. In the months ahead, these conditions will continue to impact both buyers and sellers. As TREB President Garry Bhaura puts it, “[a]s the GTA population continues to grow, the real challenge in the housing market will be supply rather than demand.”

Greater mix of housing types needed

Despite the recent increase in demand for detached homes, there’s still a significant need for housing types that are typically more affordable. This need is reflected in the purchase decisions that many homebuyers are making in the marketplace. “Generally speaking, annual rates of price growth have been stronger for higher density home types in 2018, including condominium apartment, townhouses, and semi-detached houses,” says Jason Mercer, TREB’s Director of Market Analysis.

On the whole, inventory remains an issue in the city and its surrounding areas. That said, some housing types are in shorter supply than others. “[A] policy focus on increasing mid-density housing options throughout the GTA is important,” notes Mercer.

Neighbourhood differences

TREB’s September data reveals some of the subtle differences between what’s happening in the 416 and 905 area codes. That said, the market can’t be split cleanly into two regions. “It’s important to remember that TREB’s market area is made up of over 500 communities,” says Garry Bhaura. “Market conditions have obviously unfolded differently across these communities.”

Given the tightening market, it may be challenging for buyers in some areas to find housing that meets their needs. That said, working with a Realtor who is a neighbourhood expert can help both buyers and sellers make the most of current conditions—and achieve their real estate goals.

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