Although more homes were listed for sale in April compared to last year, Toronto home prices continued to rise.
The average selling price for all home types combined in the GTA was up by 24.5%, making it an average of $920,791, according to the latest report from the Toronto Real Estate Board (TREB).
TREB’s monthly analysis was released on Wednesday, stating that there was a 33.6% increase in listings this year, compared to the same month in 2016. New listings were up by double-digits for all low-rise home types, including detached and semi-detached houses and townhouses.
While more listings were up and prices spiked, the amount of sales were down 3.2%. TREB attributes the decline to the fact that Easter fell in April this year, versus March last year, which resulted in fewer working days.
“The fact that we experienced extremely strong growth in new listings in April means that buyers benefitted from considerably more choice in the marketplace,” said TREB president Larry Cerqua in a release. “It is too early to tell whether the increase in new listings was simply due to households reacting to the strong double-digit price growth reported over the past year or if some of the increase was also a reaction to the Ontario Government’s recently announced Fair Housing Plan.”
In April, the government introduced Ontario’s Fair Housing Plan. The plan is “a comprehensive package of measures to help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market.”
TREB says that its encouraged that all levels of government, including the Province of Ontario, are making the state of the housing market a priority. However, in the statement, TREB states that they believe public policy decisions with regard to the housing market should be evidence-based and supported by empirical data.
In order to further understand foreign buying activity, TREB analyzed aggregated annual property sales, and aggregated residential data provided by the Municipal Property Assessment Corporation (MPAC) and Teranet Inc. (Teranet) for the Greater Golden Horseshoe (GGH), between 2008 and April 2017.
The analysis concluded that the number of buyers with a mailing address outside of Canada is well-below 1%, regardless of the year, and most of these buyers have a mailing address in the United States.
Moreover, the trend from 2008 to April 2017 suggests that the share of foreign home buyers has remained low.
“It is not yet clear what impact the measures contained within the Ontario Government’s Fair Housing Plan have had on TREB’s market area or the broader Greater Golden Horseshoe,”said John DiMichele, TREB’s chief executive officer. “Despite the recent uptick in new listings on TREB’s MLS System, we believe that we all have to be committed to a better understanding of issues affecting demand and supply dynamics in our marketplace. TREB will continue to collect and disseminate data on our marketplace and will continue to work with all levels of government as it relates to housing market policy.”
With the strong year-over-year increase in new listings, there is hope that the number of listings will outpace the sales growth resulting in a more balanced market. But with summer on the horizon, it’s hard to tell how long that will take.
“If new listings growth continues to outpace sales growth moving forward, we will start to see more balanced market conditions,” said Jason Mercer, TREB’s director of market analysis. “It will likely take a number of months to unwind the substantial pent-up demand that has built over the past two years. Expect annual rates of price growth to remain well-above the rate of inflation as we move through the spring and summer months.”