This June, just as we welcomed Garry Bhaura as the new Toronto Real Estate Board president, TREB could also report some happier news. After many buyers and sellers hesitated to enter the market with new mortgage stress test being implemented and other government policies regulating the market, we finally found a balance. Sales are picking up the pace once again.
TREB Realtors reported 8,082 sales this June, which is 2.4 per cent more than last year this time. It’s given, that market will slow down during the summer months, but this small change might mean that the market will start back up stronger in the fall.
The biggest sale hike was recorded in semi-detached house segment, where there was an 8.1 per cent change in year-over-year comparison. Detached homes and townhouses recorded 5.5 and 5.4 per cent rise respectively. The only falling segment are condominium apartments, with -5.3 per cent change.
The average price is also rising across segments. It climbed by 2 per cent overall, from $791,929 in June 2017 to $807,871 this year. Semi-detached houses and townhouses hiked by 1.7 and 3.2 per cent respectively. Condominium apartments soared by 7.9 per cent. The only segment that was slightly down were detached homes, with a 1.9 per cent fall. But with an average price of $1,033,574, maybe it’s time for this segment to become more affordable for the average buyer.
June had a few issues as well as positive news. The most alarming might be the lack of supply across the city. New listings are currently falling by 18.6 per cent since last year. Active listings are up by 5.9 per cent since there’s some leftover inventory from slower months this year. Overall, this issue seems to be the most pressing matter. If the inventory falls more, prices will be skyrocketing yet again, making homes even less affordable.
Richard Silver, Sales Representative, SVP-Sales
There are strong signs that the market is getting back to normal after the ups and downs over the past 15 months. Winter 2017 saw major increases and then the Provincial Government’s Fair Housing Tax led to a softening in the later part of 2017 and so far in 2018, especially in the 905 sun urban centres of the Greater Toronto Area or the Golden Horseshoe.
June 2018 has shown a substantial increase in activity and pricing. I would assume that there will be continued growth as lack of product for buyers is really affecting the 416 areas. We are still seeing multiple offers on market priced properties within an affordable range.
The question is what is affordable. If you choose a house in the 416, the prices are higher and if you head to the 905, you can lose hours a day commuting. What is the cost of that commute in time in the car and away from family?
It would seem that the City will not get smaller but will continue to intensify and Toronto is growing up more than out. The pressure will keep prices high and the market active over the next years…Don’t expect a slowdown before you hop into the market…yes it will come eventually but in waiting for it, the prices may increase to make any gains negligible.
Jim Burtnick, Broker, SVP-Sales
We are back into a more typical real estate market with the normal ebbs and flows; a slower market as we enter the summer holidays.
I expect activity will again pick up at a greater pace after the Labour Day long weekend, kids are back in school and bigger kids go back to work.
However, this is still a good time to be both a buyer and a seller – As a buyer, there are fewer active buyers in the market to compete against and as a seller, there is a lack of listings in the sought-after 416 (Toronto proper) area. All in all, this is a good sign of a more typical and healthy balanced market.
Further down the line, we still have a dire supply shortage, so if you think Toronto is expensive now, just wait another 5-10 years for this supply shortage to drive up prices to levels not imaginable now.
The smart money is buying now and holding for the long term.