Toronto & GTA Real Estate Statistics for July, 2016

Toronto, Ontario - August 4, 2016 - The Toronto Real Estate Board today released the July, 2016 residential sales statistics showing yet another month of strong price growth driven by historically tight inventory and historically low interest rates. Chart - Toronto & GTA Home Sales & Average Price by Major Home Type 2016-07

Interestingly, sales of Detached homes in Metropolitan Toronto actually fell 6.5%, compared to last July, to 954 homes sold - though the average price of those sales was $1,202,753, up 20.7%. The big question is, Is this drop in the number of units sold the result of historically tight inventory... or merely a function of spiralling prices pushing buyers further afield in search of affordability... or could the market be running out of steam in general... or just a lull in the heat of the summer? [More later on where the market might be headed - see below].

In fact, in "The 416", Detacheds, Semi-detacheds and Townhomes ALL fell in terms of unit sales versus July, 2015.

As it tends to do, time will tell - but sales of Detached homes in the balance of the GTA rose just .8% to 3,699 units compared to last July - at an average selling price of $888,565, up 21.9%. That rise in the number of sales would be indicative of a healthy, balanced market. The 21.9% part is, of course, unsustainable. The only question is, "How long?"

Chart - Toronto & GTA Home Sales Year-Over-Year Summary @ 2016-07.png Not surprisingly, Bungalows in Toronto and the rest of the GTA continue to be in particularly high demand - for a variety of reasons - ranging from an aging population to generally larger lots to flexibility in future use/development. As our friends at property.ca put it, Bungalows are "catching on like Toronto real estate wildfire" and "amongst the best investments"... Again, we'll have more details on Bungalow market activity and some examples of great "Bungalow friendly" towns, neighbourhoods & developments in the coming weeks. [Sign up and/or change the setting in your Dashboard, or click here to let us know you'd like to receive updates.]

Condominium Apartment sales in Metro Toronto rose 9.2% to 1,882 units at an average selling price of $427,074, up 8.2%. Condo Apartment sales in the balance of the GTA rose 12.8% to 783 units changing hands at an average sale price of $358,291, up 13%.

Going hand-in-hand with the robust price growth has been, of course, that inventory issue: once again the number of Total Active Listings fell dramatically compared to the same period one year earlier. As of the end of July there were 11,346 active residential listings on the Toronto MLS, a 31.9% drop from last year's 16,673 listings. Chart - Toronto & GTA Home Sales Historic Annual Stats to 2016-07.png

See our May statistics blog post for more commentary on the inventory situation.

With the proliferation of "multiple offer" situations, it's also not surprising that the average time to sell a home was 16 days on the market, "27.3% faster" than last July's 22 days to sell.

Overall - meaning all TREB areas and all home types - there were 9,989 residential sales through the Toronto MLS in July, up 1.8% from last July's 9,813. The overall average sale price was $709,825, up 16.6% from last year's $608,875.

Looking at those total active listings divided by total sales for the month, we get an "Indicated Forward Inventory" of 1.14 months - meaning it would take just over a month to sell all of the listings presently on the market. This is a nominal increase from last month's .96 [e.g. less than one month of inventory] - very normal to see a rise in inventory after the spring market and moving into the summer months...but it's still historically low...

This from Jason Mercer, TREB's Director of Market Analysis: “Relatively strong labour market conditions, above-inflation average income growth, and record low borrowing costs have kept many households confident about purchasing a home. As long as very strong buying intentions are up against an extreme shortage of listings, expect home price growth to greatly outpace the rate of inflation.”

Of interest on interest rates: while the Bank of Canada's overnight rate [.5%] and prime rate [2.7%] are the same as they were last July, one year posted mortgage rates are about 8.6 per cent higher than they were one year ago, now at 3.14%; the three-year rate is unchanged at 3.39%; and the five-year rate is about 2.2% higher at 4.74%.

Stay tuned for more in-depth commentary on where the residential real estate market in Toronto, the GTA, and the rest of the country is headed. Those will be posted here in the coming weeks...feel free to set up an [infrequent] email alert if you'd like to be kept apprised...

Thanks for reading, and enjoy the rest of this beautiful summer.

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