A lack of listings continues to dominate the Toronto real estate market. A snapshot of Midtown Toronto follows that trend, as you can see in the graph above. The number of sales in May remains fairly consistent, but listings continues to trend down, from 210 in 2006 to 169 in 2016. Just like the rest of Toronto, a lack of supply puts upward pressure on prices. According to TREB, across Toronto the number of sales was up over 10% from this time last year while new listings were down 6%.
In other news, the OECD noted that Toronto’s housing market had appreciated at 15% year over year. “Strong residential investment may in principle reflect robust demographic growth, but Canada’s outcome appears stronger than what can be justified by underlying population increases”. Residential investment was 7.6% of Canada’s GDP in 2015.
The Federal Governement is trying to find a way to monitor foreign buyers, with the aim of slowing investors that do not intend to live in their residences. Other solutions for slowing the growth of the market may include "adopting a more rigorous qualifying standard for high-value properties" to mitigate the risk of speculation.
In my opinion, over the long term, it's hard to see how a property constrained area around a thriving hub such as the GTA can't appreciate in price unless more people want to sell. Sounds obvious, but the question I have is why would a large group of people want to suddenly sell out of the best city on earth, when it has a thriving and diverse economy (think: financial, technology, health science, legal, etc)? Fellow Torontonians, we are lucky to live here...