As the supply of properties listed in the Greater Toronto Area (GTA) “tightened” in July, the number of home sales still increased by 24% year-over-year, according to a new report from the Toronto Real Estate Board.
The number of properties sold in the GTA increased to 8,595 from 6,916, a 24.3% increase compared to July 2018, according to a new TREB report.
New listings were also up in July but at a much lesser annual rate than sales at 3.7%. This resulted in annual growth in sales “far outstripping” annual growth in new listings, causing market conditions to tighten compared to last year.
Active listings at the end of July were down 9.1% year-over-year, further reflecting tightening market conditions.
As market conditions continued to tighten throughout July, the average selling price for homes in the GTA increased by 3.2% year-over-year to $806,755.
The MLS Home Price Index Composite Benchmark, which gauged a neighbourhood’s home price levels and trends, was up by 4.4%.
Additionally, higher density home types continued to drive price growth, whereas detached home prices remained down in many communities throughout the GTA, according to the report.
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“Broadly speaking, increased competition between buyers for available properties has resulted in relatively strong price growth above the rate of inflation for semi-detached houses, townhouses and condominium apartments,” said Jason Mercer, TREB’s chief market analyst in a statement.
However, Mercer said the single-detached market segment, which has been more affected by the OSFI stress test, has experienced a slower pace of price growth, dropping 0.9% overall.
In Toronto, the average price for fully detached homes fell 9.1% to $1.23 million, while the average price for semi-detached homes increased 5% to just under $1 million at $981,802.
Additionally, TREB reported there were 14,393 new listings in the GTA during July, a slight increase from 13,873 in July 2018. However, the total number of active listings at the end of last month was down 9.1 % from this time last year.
TREB CEO John DiMichele said while the OSFI mortgage stress test has “clearly had an impact” on the number of home sales over the last year-and-a-half, the goal of homeownership for residents hasn’t diminished.
But as the households come to term with the stress test and move back into the market in the coming months and years, DiMichele predicts they could suffer from “a chronically under-supplied marketplace and an acceleration of home price growth to unsustainable levels.”
“Fortunately, policymakers have acknowledged the housing supply issue and are working toward solutions, ” said DiMichele.