TORONTO, ONTARIO, June 5, 2019 –Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported 9,989 transactions through TREB’s MLS® System in May 2019. While this result represented a substantial increase of 18.9 per cent over the 15-year low in May 2018, it should be noted that the result was still below the average for month of May sales for the previous ten years, which stands at almost 10,300.The year-over-year uptick in sales experienced so far in the second quarter of 2019 reflects spring polling results from Ipsos (undertaken on behalf of TREB) suggesting that the share of likely home buyers in the Greater Toronto Area has edged upwards since the fall. “After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing. Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors.
However, sales activity continues to be below the longer-term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales,” said Mr. Bhaura. The number of new listings entered into TREB’s MLS® System in May 2019 was up only slightly compared to May 2018, increasing by 0.8 per cent to 19,386.
Year-over-year growth in new listings was far outstripped by year-over-year growth in sales. This means that market conditions continued to tighten in favour of sellers. The MLS® Home Price Index (HPI) Composite benchmark price was up by 3.1 per cent on a year over-basis. The average selling price for all home types combined was up by a similar 3.6 per cent to $838,540. Price growth was driven by the condominium apartment and townhouse market segments. “We are experiencing annual rates of price growth that are largely sustainable right now in the GTA – above the rate of inflation, but in the single digits. If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate.
This potential outcome underpins calls from TREB and other housing industry stakeholders to address roadblocks preventing a more sustainable and diverse supply of housing reaching the market. Many households are not comfortable listing their homes for sale because they feel that there are no housing options available to better meet their needs,” said Jason Mercer, TREB’s Chief Market Analyst.
“The GTA attracts people from all around the world to live and work. This is a competitive advantage for our region. However, all of these new households need a place to live, whether they choose to buy or rent. With this in mind, TREB feels that those parties vying for seats in the fall federal election need to put forth their positions on housing-related issues. Their positions should include ways in which the federal government could work with provinces and municipalities to increase the supply of rental and ownership housing. On top of this, federal parties should also state their position on housing affordability, including in the area of mortgage lending – a discussion that could include flexibility around qualification standards and amortization periods on insured mortages,” said TREB CEO John DiMichele.