Sunny days on the horizon
Monday Jun 10th, 2019
This year’s active spring market has continued its strong pace. The Toronto Real Estate Board released the housing figures for May and with 9,989 sales reported, there was an 18.9% increase in sales volume over the same period last year. Though the jump is dramatic, it should be noted that May 2018 represented a 15-year low and that sales were still slightly off the 10-year-average for May, which is just under 10,300.
The average price of all transactions rose to $838,540, representing a year-over-year gain of 3.6%. The MLS Home Price Index (HPI) Composite benchmark, which is a more accurate indicator of inflation in the market, was up 3.1%. New listings rose 0.8% year-over-year to 19,386 – well below the rate of sales – representing a further tightening of supply in the GTA. With that in mind, expect upward pressure on prices as buyers compete for a limited housing stock. There is currently a two month supply in the GTA, down from 2.5 months a year ago.
While price growth in the market was led by the condominium sector, which was up 4.9% year-over-year (+6.6% in Toronto), the big jump in sales volume continues to be in low-rise housing. The spread between high-rise and low-rise pricing is eroding, making low-rise ownership more attractive. In May, detached sales were up 25.1%, semis were up 27.9% and towns were up 22.8%, compared to condos which were up 6.4%. Worth noting, in the 416, sales of condos decreased from a year ago (-0.2%), while sales of detached and semi-detached home both increased over 30% year-over-year.
After a sluggish start to 2019, the second quarter has really picked up. Annual price growth is above the rate of inflation but still in the low single digits. As supply tightens, expect seller’s market conditions to continue. For more insight and analysis, be sure to call me.