June 6, 2019 | Homeownership
The Toronto Real Estate Board announced that Greater Toronto Area reported 9,989 transactions in May 2019. While this result indicates a substantial increase of 18.9 per cent compared to the 15-year low back in May 2018, we still need to consider that the result is still below the average for May sales over the previous ten years, which stands at almost 10,300. The average selling price for all home types combined was up by 3.6 per cent to $838,540. Price growth was driven by the condominium apartment and townhouse market categories. The number of new listings in May 2019 was up only slightly compared to May 2018, increasing by 0.8 per cent to 19,386.
A Shift in The Right Direction
A sluggish start to 2019 left the Greater Toronto Area in anticipation for the remainder of the 2019 real estate market to unfold. However, the second quarter appears to be reflecting a positive shift in the market for homeowners and potential home buyers. Households continue to view the ownership of housing within the GTA as a quality long-term investment. Population growth influenced by immigration maintains its strength. Although, sales activity continues to hover below the previous norm, as the OSFI mortgage stress test and listing limitations continue to impact potential home buyers.
Year-over-year growth in new listings far exceeded the year-over-year growth in sales. In translation, the market conditions continue to tighten in favour of sellers. The MLS® Home Price Index (HPI) Composite benchmark price has increased by 3.1 per cent on a year-over-basis.
Sustainable Decision Making
As a result, the annual rates of price growth that we are experiencing currently in the GTA are largely sustainable – above the rate of inflation, but in the single digits. Although, if we continue to witness the growth in sales outperforming growth in new listings, price growth is bound to accelerate, resulting in trying times for home buyers. TREB continues to address these obstacles preventing a more sustainable and diverse supply of housing reaching the market. The common concern expressed from potential home sellers when describing their hesitation to list their home for sale is that they feel there are no available housing options to better meet their needs.
If you share a similar concern as a potential home seller or home buyer, we welcome the opportunity to help you find that dream home while also offering continued support when navigating today’s real estate market. Contact us today!