Although the housing market isn’t quite as wild as it was a little over two years ago, home prices are high and it doesn’t look like buyers (particularly first-time buyers) are going to get a break any time soon.
The Toronto Real Estate Board (TREB) says that GTA realtors reported 8,860 sales through TREB’s MLS System in June 2019–a 10.4 per cent increase compared to June 2018.
Over the same time period, total new listings remained at a similar level for the month of June and active listings at month-end were down by 5.7 per cent. TREB says sales were up by 8.5 per cent, while new listings were up by less than one per cent. This means that there’s a lot of buying activity going on and competition for homes is heating up.
For that reason, prices are trending higher.
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“As I start my term as president of the Toronto Real Estate Board, I am proud to say that the Greater Toronto Area continues to grow, in terms of employment, population and overall diversity. As people are attracted to our region from all around the world, they obviously need a place to live,” said Michael Collins, TREB president, in a statement.
Collins is calling for what many real estate experts have been pushing for: more supply and the relaxation of newly-implemented mortgage rules that require buyers to qualify at higher rates than they’ll ultimately be paying.
“Over the next year, as demand for ownership and rental housing continues to grow, my hope is that we will see more movement from policymakers on two fronts: alleviating the constrained supply of housing and providing more flexibility around demand-side policies, including the OSFI two percentage point mortgage stress test and allowable amortization periods on insured mortgages.”
The overall average selling price in June 2019 was $832,703 – up by three per cent compared to the average of $808,066 in June 2018.
As usual, price growth was driven by the popularity of condos, townhouses and semi-detached houses (which is to be expected at a time when detached houses are close to or over $1 million).
TREB says the MLS Home Price Index composite benchmark was up by a similar annual rate of 3.6 per cent. For the first half of 2019, the average selling price was $810,661, representing an increase of 2.4 per cent compared to the first half of 2018.
As for what’s happening in Brampton in particular, real estate website and brokerage Zoocasa says supply and demand imbalances are becoming more problematic for prospective buyers.
“The Greater Toronto Area housing market has fallen back into its old pattern of supply and demand imbalances as sales climb from last year’s slump, yet supply remains flat. That’s led to an upward push on home prices and heating competition for buyers as more markets approach seller-friendly territory,” says Penelope Graham, managing editor, Zoocasa.
In Brampton, activity is off the charts.
Graham says the market is scorching in Brampton with a total of 932 homes sold, a 20.8 per cent year-over-year improvement.
Graham adds that a flat influx of new supply – new listings fell 0.8 per cent to a total of 1,491 – has led to a price surge of 6.9 per cent to an average of $744,590.
The market has also turned around from the lower end of balanced last year to a bona fide sellers’ market with a sales-to-new-listings ratio of 62 per cent.
As for what’s happening in the 905 overall:
In terms of numbers specific to the entire GTA, a detached house in the 905 currently costs about $922,367 (a little down from $925,621 in May). A semi costs about $694,282 (up from May’s average price of $678,152), towns are selling for $618,958 (down from $629,049) and condos are costing buyers about $483,893 (a little up from $478,230).
TREB suggests that the supply and demand issue will continue to drive price points.
“Buyers started moving off the sidelines in the spring, as evidenced by strong year-over-year price growth throughout the second quarter. However, because we saw virtually no change in the number of new listings, market conditions tightened and price growth picked up, especially for more higher density home types, which, on average, are less expensive than traditional detached houses and therefore provide more affordable housing options under the new OSFI stress test regime,” said Jason Mercer, TREB’s chief market analyst, in a statement.
The organization also called for more “missing middle” housing to bridge the gap between condos and detached houses (think more towns and semis).
“While some home buyers may have adjusted to the OSFI stress test by looking to more affordable housing options, this could present an issue over the longer term because we aren’t adding a meaningful amount of new mid-density housing supply to bridge the gap between condominium apartments and detached houses,” said TREB CEO John DiMichele.
“Finding ways to add more mid-density housing types to existing neighbourhoods and new developments needs to be a key component of municipal, provincial and federal housing plans and policies moving forward.”
Are you planning to buy a house this summer in Brampton?