Tight Market Conditions Push Prices Higher
Summer may be over, but temperatures continue to rise for the Greater Toronto Area real estate market this fall.
The Toronto Real Estate Board (TREB) reported 8,941 in residential sales through the MLS in October, a 14% increase compared to last October’s 7,448 sales. This ties in with the positive growth in sales on a year-over-year basis for all home types.
Boosted annual rates of price growth across all major market segments stem from tighter market conditions. This is a direct result of a booming regional economy, steady population growth, and, in turn, the number of new households seeking to purchase a home. These market conditions are met with a drop in the supply of available listings, resulting in accelerated price growth.
New listings are down by 9.6 % compared to the same period last year. In contrast, the average selling price for all home types came to a combined total of $807,538, a 5.5 % increase in sales prices reported in October 2018.
“While the current pace of price growth remains moderate, we will likely see stronger price growth moving forward if sales growth continues to outpace listings growth, leading to more competition between home buyers,” says TREB’s Chief Market Analyst Jason Mercer.
As the competitive atmosphere heats up, it will be of paramount importance for the government to tackle the supply crisis at a policy level to ensure sustainable price pacing and rent growth.
Prices and Sales Continue to Climb in All Sectors
The Toronto Real Estate Board’s (TREB) latest report is out, and prices are up across the board on a year-over-year basis for all major home types.
The average selling price for all home types came to a combined total of $852,142, a 5.5% increase compared to $807,538 for the same period last year. A 2.9% month-to-month decrease sees a continuation of September 2019’s decline. The condominium market saw year-over-year increases of 9.6% in the 416 region and 10% in the 905 area.
Sales are on the up too. TREB’s MLS recorded 8,491 residential sales, an increase of 14 % on last year’s tally of 7,488. Condo sales also grew to 2,219, a 5.1% year-over-year increase.
Condos continue to be the second most popular choice behind detached houses, with the lowest average cost of $617,419.
Thanks to a thriving economy, steady population growth, and an increased number of new households seeking to buy new homes, market conditions are tight. “The problem is that the supply of available listings is actually dropping, resulting in tighter market conditions and accelerating price growth,” says TREB president Michael Collins.
TREB, policymakers, and international organizations will need to band together to help bring a sustainable rate of price and rent growth back to the GTA. The regional supply crisis is sure to be a hot button issue as we move into 2020.
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