The Toronto Real Estate Board numbers are in for April 2016, and (no surprise!) demand for homes in the Toronto area is still very strong. The number of sales has increased 15.8% per cent for Q1 2016 over Q1 2015, and they’re up 7.4% for April 2016 when compared to April 2015. These increases in the number of sales happened despite a decrease in the number of listings available for both periods as compared to 2015.
Despite the increase in the number of sales for the GTA, the ‘416’ area code has a decrease in detached, semi-detached, and townhome sales. Why? The lack of ‘low-rise’ listings has constrained the market. Because of the lack of listings, ‘home price increases in Canada’s largest city are now spilling into the suburbs and even distant municipalities like Guelph and Waterloo’, according to the Financial Post (Toronto Catching Up To Vancouver…, Gary Marr, May 4). This lack of supply translates into higher prices, which increased 12.6% per cent year-over-year.
"As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher. A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced," said Jason Mercer, TREB's Director of Market Analysis.
As a seller, this would seem to be an unequivocally good market: if you’re planning to sell your home, you’re in luck! However, one of the factors keeping supply down is the fact that sellers are often loath to list their homes for fear of selling without finding anything to buy. The buyers who benefit most from the pattern we’ve seen are twofold: downsizers who are selling a home in the most desirable category (single family detached or semi-detached) and buying a condominium where prices have also risen but not as fast or as far, or first time buyers who have a significant down payment and no home to worry about selling.