Toronto, Ontario, May 6, 2019 - Toronto Real Estate Board president Garry Bhaura this morning released the Board’s monthly “MarketWatch” MLS® statistical publication showing a significant up-tick in the number of homes sold in April compared to the year-earlier period while average selling prices were "mixed-to-positive" based on the overall average. Condo Apartments across the GTA saw the strongest price gains; sales of Detached homes were also stronger, albeit on flat to slightly lower average prices. Available inventory was little changed year-over-year which, considering the stronger sales volume, obviously lends some pricing support.
Generally speaking, the figures were pretty stable across TREB’s market area…the exception being Condo Apartments, sales of which were up 16.7% outside Metro Toronto while the City itself saw only a 2.6% increase. The latter is more likely due to supply than demand. All figures herein are year-over-year comparisons, unless otherwise noted.
Particularly in the Detached and Semi-Detached home type groups, Bungalows remained a popular option both for empty-nesters “downsizing” and for younger buyers preferring back yards to balconies…and “willing & able” to pay the higher price for those back yards.
In fact, let’s do a quick "fly-over" of the GTA and compare those two: Bungalow prices, on average, versus - let’s say - a 2-bed Condo Apartment using some very randomly chosen areas…
Area, & April’s approximate average sale price, "All Bungalows" versus "2-bedroom Condo" in each area:
Newmarket [York Region]: $674,000 vs $401,000
Barrie [Simcoe County]: $575,000 vs $406,000
Brampton [Peel Region]: $671,000 vs $403,000
Milton [Halton Region]: $757,000 vs $484,000
Oshawa [Durham Region]: $498,000 vs $490,000
North York [Toronto - Central/North]: $1,050,000 vs $635,000
Etobicoke [Toronto - West]: $991,000 vs $638,000
Scarborough [Toronto - East]: $784,000 vs $435,000
Niagara Region [All]: $496,000 vs $304,000
Cobourg [Northumberland County]: $489,000 vs $332,000
[Please Note: If you’d like to stay abreast of Sold & Active Listing stats in your own area, you can do that here.]
Hmmm…some interesting numbers there, actually. The prices for each are virtually the same in Oshawa. But - in most areas - it’s a pretty fat premium for the house compared to the apartment… Also a little surprising that there’s virtually no difference in the Condo figures for Newmarket, Barrie & Brampton.
MLS® Sales: The Big Picture
Sales of Detached homes in Metro Toronto - “YYZ” in airport lingo; better known as “The 416” which is the original Toronto area code - were up 20.9% to 982 units at an average sale price of $1,355,764, unchanged YoY, In the balance of theGreater toronto Area, 3,191 Detached homes sold, up 22.2%, at an average of $914,249, down 1.7%.
Sales of Condo Apartments in Toronto totalled 1,608 units, up 2.6%, at an average of $637,181, up 5.8%. In the balance of the GTA, 749 Condos sold, up 16.7%, averaging $482,945, up 5.7%.
Homes sold “5% faster” in the GTA in April at 19 Days on Market [DoM] versus 20 days last April. We've noted here before that some statistics - notably DoM and "New Listings" - have been skewed in recent years by the practice of terminating and re-writing listings in order to "freshen the listing up" - coincident with a price reduction or otherwise. TREB has now begun tracking "Property Days on Market" - or PDoM - which provides a more accurate picture of how long a given property's been for sale. With the introcuction of PDoM, the original Days on Market / DoM label now becomes Listing Days on Market, or LDoM. While DoM - or, as it's now known, LDoM - in April was 19, PDoM was 26. Also being tracked are the Year-to-Date figures which were 23 and 32 respectively to the end of April.
Total Active Listings divided by April’s Total Sales indicates Forward Inventory of two months [2.34 months last April]. That’s pretty normal by historical standards…a little low, in fact. But - as Jaason Mercer notes in the report [see below] - sales are on the low side for “an April” in the context of the past decade. The point is, inventory’s also relatively low - thus providing some price support.
“Absorption Rate” - the rate at which the residential real estate market “absorbs” newly listed homes in the form of sales - is calculated by dividing total number of sales by total number of new listings. That worked out to .526 for April.
From the Horses’ Mouths...
An important observation from TREB’s Chief Market Analyst, Jason Mercer, in the report: “While sales were up year-over-year in April, it is important to note that they remain well-below April levels for much of the past decade. Many potential home buyers arguably remain on the sidelines as they reassess their options in light of the OSFI-mandated two percentage point stress test on mortgages. Longer term borrowing costs have trended lower this year and the outlook for short-term rates, for which the Bank of Canada holds the lever, is flat to down this year. Unfortunately, against this backdrop, we have seen no movement toward flexibility in the OSFI stress test.”
No doubt, as far as we’re concerned, that the “Stress Test” is still having a limiting impact on home sales. To what degree is difficult to ascertain in the absence of in-depth analysis. At least as limiting in our opinion, however, is simple affordability: Even though residential real estate prices have fallen across the market area since the peak in early 2017, prices still remain out-of-reach for many.
“The strong year-over-year growth in sales is obviously a good news story and likely represents some catchup from a slow start to the year. TREB’s sales outlook for 2019 anticipates an increase relative to 2018. It should be noted, however, that growth in new listings is not keeping pace with sales. This points to the ongoing housing supply issue in the GTA. In this regard TREB welcomes the provincial government’s Housing Supply Action Plan announced last week to reduce red tape and improve the mix of housing types. TREB provided input on the Plan through submissions and participation on working groups,” added Board President Garry Bhaura.
Once again, our sincere "Thank-you" for tuning in...