There continues to be a supply issue for the market in the Greater Toronto Area (GTA), even as home sales for November reached a record high.
November 2021 closed with 9,017 sales from all the neighbourhoods in the region, as compared to 8,728 sales in November 2020. Of the 9,017 sales, 3,587 were in the city of Toronto with 5,430 closings occurring in the rest of the GTA.
With the demand exceeding the supply of homes, the average sales price in the GTA in November was $1,163,323, a 28.3% increase over last November’s average price of $955,889.
Supply and demand fueled this sharp increase in average sales price. There was a 13.2% decrease in new listings over last year. A high percentage of the decline in market availability was attributed to a double-digit falloff of the supply of low-rise homes and condominiums.
TRREB President Kevin Crigger, believes that the government must take aggressive actions to satisfy the growing demands by helping to increase the housing supply now and into the future. The GTA remains the destination of immigrants because of Toronto’s role as the hub of the Canadian economy.
The long-term solution lies in the ability of the City of Toronto to help with housing affordability initiatives and to expedite the approval process to build high-density developments. It can be concluded that the creation of a greater diversity of housing choices will help level out the supply and demand playing field.
The key contributing factor to the increase in the sales stats for the Greater Toronto Area (GTA) for 2021, is what is happening in the condo and townhouse segments of the market in suburban areas.
TRREB Chief Market Analyst Jason Mercer notes that as Toronto experiences economic recovery, first-time buyers are reappearing to contribute to the need for an increased supply of condos and townhouses. This segment of housing has better entry level price points and should remain a desirable housing choice for the next couple of years. TRREB President Kevin Crigger has commended the city of Toronto for recognizing the need for mid-density home types and for encouraging more multiplex housing options.
The need for this diversity of housing is driven by the fact that condo and townhouse sales in November showed a year-over-year increase of 24.26% for townhouses and 20.08% for condos, despite the fact that townhouse sales were down 4.7% from November 2020.
The average sales price for a condo in November was $715,104, while a townhouse purchase averaged $962,044. Buyers of townhouses and condos paid an average of 28% and 18% more, respectively, than they would have paid a year prior as the supply has diminished.
The importance of the TRREB calls to action to the government entities that help fuel the TRREB MLS system sales stats evidences the increase of a much-needed housing supply. The consumer bears the cost of whatever the supply is.