Despite the upward trend in GTA home prices and sales, there appears to be no relief in sight for prospective homebuyers if there is no improvement in the supply of available housing listings.
This was the warning from Toronto Real Estate Board chief market analyst Jason Mercer in TREB’s December 2019 market watch report released on Tuesday.
While sales were up 12.6% in 2019, the number of new listings was down by 2.4% year-over-year — signaling a continuation of what TREB is calling a supply “holding pattern” for the last decade.
“Over the last ten years, TREB has been drawing attention to the housing supply issue in the GTA,” Mercer said in the board’s press release.
“Increasingly, policymakers, research groups of varying scope and other interested parties have acknowledged that the lack of a diverse supply of ownership and rental housing continues to hamper housing affordability in the GTA. Expect further acceleration in 2020 if there is no relief on the supply front.”
While supply has remained stagnant, sales and selling prices have continued to rise.
In December 2019, the average price for all home types in the GTA was up almost 12% year-over-year, to an average selling price of $837,788.
Year-to-date, the annual average selling price of a GTA home was $819,319 – up by 4% compared to $787,856 in 2018. And condos — the most affordable segment of the market — saw their sales rise by 3% year-over-year, and their average selling price rise by 6.4%, to $587,959.
“As anticipated, many home buyers who were initially on the sidelines moved back into the market place starting in the spring,” said TREB President Michael Collins in the release.
“Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year.”
There were a total of 87,825 residential sales in 2019, compared to the decade-low 78,015 sales reported through TREB’s MLS System in 2018.
A total of 4,399 residential sales were reported through TREB’s MLS System in December, an increase of 17.4% year-over-year.
From June 2019 onward, the annual growth rate in the MLS HPI Composite Benchmark accelerated. The MLS Home Price Index Composite Benchmark was up by 7.3% on a year-over-year basis in December.
“We certainly saw a recovery in sales activity in 2019,” said Collins, “particularly in the second half of the year.”