Toronto, Ontario, June 5, 2019 - A relatively upbeat “MarketWatch” monthly stats report was released this morning by The Toronto Real Estate Board [TREB] with Toronto and Greater Toronto Area Realtors® reporting 9,989 residential real estate transactions in May. That figure represents an 19.9% increase over the year-earlier period - though the Board is quick to point out that that’s still slightly below the average of ten previous Mays which is approximately 10,300 homes sold.
Overall, meaning all house & condo types reported through TREB’s MLS® System, the average price of those sales was $838,540, up a respectable 3.6% - an increase that’s “largely sustainable” according to the report - though a closer look shows that price strength coming largely from the Condo Apartment group. All figures quoted herein are year-over-year comparisons unless noted otherwise.
The report also notes that May, 2018’s Sold figures were understated due to a [significant] reporting discrepancy. There were 8,402 sales last May as opposed to the 7,834 reported.
The May figures support TREB’s 2019 Market Outlook which was released in early February and included poll results from IPSOS that pointed to about 83,000 sales on the year - a modest YoY increase supported by low unemployment and very low interest rates combined with a growing GTA population - and slightly tighter market conditions due to what the report termed, “a slight dip in listing intentions this year”. [More on the Inventory situation below.] That report also suggested that the OFSI’s “mortgage stress test” is adding about $700 per month to the amount that Home Buyers are actually required to qualify for.
Breaking down May’s #’s…
Sales of Detached homes totalled 1,180 in “The 416”, Metropolitan Toronto, a strong 30.4% gain, at an average sale price of $1,384,993, up a slim 1.5%. “The 905” - the Balance of the Greater Toronto Area - saw 3,469 Detached sales, a 23.4% jump, at an average price of $925,621, virtually unchanged at +0.3%.
The other Types of Freehold [as opposed to Condominium] low-rise homes such as Semi-Detached, Linked, Townhomes, etc., also saw strong sales growth - as high as +35% for Toronto Semi-Detacheds - though flat-to-modest growth in Average Prices.
Condo Apartment sales in Metro T.O. were actually the weakest “print” in the report, down 0.2%…though the Average Price of those sales was the strongest in the report at +6.6%.
About the Inventory…
“Total Active Listings” at the end of May stood at 20,017, down 4.3% versus one year earlier. Dividing by the month’s sales gives us an indicated Forward Inventory of two months [2.67 last May]…so we’re still a little “snug” on the inventory front from an historical point of view. The Absorption Rate - an indication of how quickly the market’s absorbing newly listed properties, calculated by dividing the month’s sales by “New Listings” - was .515 [.412 last May].
“We are experiencing annual rates of price growth that are largely sustainable right now in the GTA – above the rate of inflation, but in the single digits. If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate. This potential outcome underpins calls from TREB and other housing industry stakeholders to address roadblocks preventing a more sustainable and diverse supply of housing reaching the market. Many households are not comfortable listing their homes for sale because they feel that there are no housing options available to better meet their needs.” - Jason Mercer, Chief Market Analyst, Toronto Real Estate Board
“After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing. Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors. However, sales activity continues to be below the longer-term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales.” - Garry Bhaura, President, TREB
Homes sold “5% faster” this May compared to last at 19 Days on Market [DOM] versus 20 last May.
Once again, thank-you for stopping by... Use the "Questions...?" link below to drop us a line anytime if we can help in any way.