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.

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The May 2015 real estate numbers are in from the Toronto Real Estate Board, and we're not at all surprised to find that market conditions are tighter than ever this spring, particularly in high-demand market segments. 

After several months of increases in both sales and prices, May saw a return to the pattern that drives price increases the most in the detached segment: a dip in sales for detached homes, driven in large part by a relative lack of listings. Fewer homes to purchase plus more buyers wanting to purchase equals a major price increase: detached homes in the GTA year-over-year were 14% more expensive on average than last May, with an almost 20% increase in the City of Toronto itself. 

Other segments weren't left out, however. Every single market segment, including condos, saw a year-over-year increase: condos posted a very respectable 5.5% overall rise in average price for the GTA. 

TREB Director of Market Analysis Jason Mercer puts it best: “Tight market conditions, especially for singles, semis and town homes in the GTA, have resulted in strong price growth regardless of the price metric being considered.  With no relief so far on the listings front, expect similar rates of price growth as we move through the remainder of 2015.  At this point, a number of months where listings growth outstrips sales growth would be required to satisfy pent-up demand."

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It's official: this spring market has set a new Toronto real estate record. Year over year sales in April 2015 were up a spectacular, record-setting 17%; new listings were also up, but only by 5%, which means that we're seeing one of the tightest - and one of the strongest - real estate markets in the city's history. Also record-setting was the year-over-year average price increase of 10%.

Anyone who had doubts about the health of Toronto's condo market should also be heartened by this month's numbers: condos outpaced semi-detached homes in sales, with a year-over-year increase of 16.1%, and showed a very respectable above-inflation average price increase of 5.8%.

Of particular note this month: although the most buyer competition happens around the midpoint of the market, for detached and semi-detached low-rise homes priced around or a little bit under a million dollars, the Toronto luxury real estate market is also incredibly strong. The fact that average price growth outpaced the MLA Home Price Index (10% vs. 8.4%) suggests that a larger proportion of high-end homes changed hands. This is borne out by the Financial Post's report that Toronto has the hottest luxury real estate market in the entire world.

“Demand for ownership housing was very high relative to the number of homes available for sale in April.  This situation is not expected to change markedly as we move through the remainder of 2015.  Until we experience a sustained period in which listings grow at a faster pace than sales, annual rates of home price growth will remain strong,” said Jason Mercer, TREB’s Director of Market Analysis.

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Toronto Real Estate Home FinanceThe numbers are in for the first half of October from the Toronto Real Estate Board, and it looks like the heat of the market isn't just a flash in the pan: it's a continuing trend.

In a repeat of the numbers from August, this period also saw a sales increase of 21% over the same period last year. Granted, last year's October numbers were part of the six-month decline that the market experienced in late 2012 and early 2013 - but these numbers are also up by 13% over the 10-year sales average, which suggests that the market's strength is genuine and not a fluke. Prices are also up by 7.3% year over year, a further indicator of growth.

Why these numbers? It's the same pattern we've discussed before. Low-rise homes are a huge driver of growth, especially since, as TREB President Dianne Usher says, "the supply of ground-oriented listings remains constrained." This is "due in part to the additional land transfer tax and stricter lending guidelines" - she suggests, in fact, that sales growth could be even greater if the Toronto Land Transfer Tax were repealed, a position with which we agree.

Broader factors also influence the market's strength. There are lots of people with the means and the inclination to buy a home, due in part to the strong Canadian economy.Toronto's real estate is also popular with international buyers, who see it as a safe investment due to its strong showing andCanada's stability. 

Overall, TREB Senior Manager of Market Analysis Jason Mercer paints a happy picture for the market's immediate future: ""Price growth has been stronger in the second half of 2013, as sales growth has outstripped growth in listings.  There have been more buyers competing for available properties compared to the first half of the year, which has led to increased upward pressure on average selling prices."

The full TREB report is available here.

Nick Thompson

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