May 7, 2019 | Buying
Toronto’s Real Estate Market has shown a significant year-over-year increase in home sales in April 2019. Transactions for residential sales jumped by a substantial 16.8 per cent to 9,042 compared to the 7,744 year-over-year sales in April 2018. Compared to last month’s reported numbers, sales have increased by 11.3 per cent.
On one hand, an increase in new listings has also been reported year-over-year by eight per cent. On the other hand, a much lower annual growth rate for new listings was reported compared to sales numbers. Moreover, this data suggests that the market conditions have steadily tightened resulting in an acceleration in price growth.
Making Sense of The Year-Over-Year Numbers
Given the growth year-over-year in sales, these results offer good news for the Toronto Real Estate Market as it is showing strong signs of catch-up and correction due to a slow start to 2019. The Toronto Real Estate Board’s sales outlook for 2019 does predict an increase similar to that seen in 2018.
However, it’s important we recognize that growth in new listings is not in step with the sales. These statistics echo the continued discussion and concern of the housing supply in the GTA. To this point, the provincial government’s Housing Supply Action Plan announced last week with the objective of reducing red tape and improve the diversity of housing types has been welcomed by TREB.
A Larger Look at April
Compared to the first three months of the year, the year-over-year rate of price growth was demonstrated in April. The average selling price in April 2019 was up by 1.9 per cent to $820,148, which represented the strongest annual rate of growth so far in 2019. Moreover, compared to March 2019, the average selling price also increased by 1.1 per cent.
Price growth continues to rise and due largely to the condominium market. The average price for detached houses plunged year-over-year, more so in the regions surrounding the City of Toronto. In addition, the detached housing market continues to hold the highest price point on average, continues to be steadily impacted by the OFSI stress test.
The Overall Picture
While we notice sales are up year-over-year in April 2019, it is imperative that we recognize they still remain well-below April’s levels for the majority of the past decade. Due to the OSFI assigned two percentage point stress test on mortgages, this arguably leaves many home Buyers left revaluating their options moving forward. The Bank of Canada remains in control of the promise for short-term mortgage rates which have proven to remain unforeseeable. Unfortunately, there has been no indication of flexibility in regards to the OFSI’s stress test. On the whole, healthy, balanced conditions are promising for Torontonians and we can only hope the market continues to increase throughout the rest of 2019 at a similar rate that it has year-over-year for April.
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