Toronto home sales increased 18.9% in May, according to the latest market figures released Wednesday by the Toronto Real Estate Board (TREB).
This year-over-year increase is welcome news for sellers, after the 15-year low in home sales that was felt in May of last year. This increase also comes after a 16.8% increase in year-over-year sales in April, though the figure is still below the average for May, which is almost 10,300.
There was a surprising revision made in this month’s report. TREB originally reported that there had been 7,834 sales in May 2018, but revised that to 8,402 in the latest report. This is one of the largest revisions of the past few years.
“The initial estimate of sales was conservative due to a one-off reporting discrepancy that was discovered when the May 2019 reports were being produced,” the release said in a footnote.
We reached out to TREB to get more clarification about the "discrepancy", but we were directed back to the footnote by a spokesperson.
“After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing,” said TREB president, Garry Bhaura.
“Households continue to see ownership housing in the GTA as a quality long-term investment,” said Bhaura. “However, sales activity continues to be below the longer-term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales.”
The growth in home sales is eclipsing listings growth. New listings rose by only 0.8%, to 19,386.
TREB said these tight market conditions are favouring sellers.The average selling price for all home types rose 3.6% to $838,540 as a result, largely driven by the condo and townhouse markets.
“We are experiencing annual rates of price growth that are largely sustainable right now in the GTA – above the rate of inflation, but in the single digits,” said Jason Mercer, TREB’s chief market analyst.
“If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate.”
TREB cautioned that this could put a strain on diversity and supply of housing, and with the upcoming election, made a renewed call for politicians to make sustainable and affordable housing a top priority.
“Many households are not comfortable listing their homes for sale because they feel that there are no housing options available to better meet their needs,” said Mercer.
“The GTA attracts people from all around the world to live and work… However, all of these new households need a place to live, whether they choose to buy or rent. With this in mind, TREB feels that those parties vying for seats in the fall federal election need to put forth their positions on housing-related issues.”