Toronto and GTA Markets in May 2019
This is the recently released report of the Toronto Real Estate Board concerning the May 2019 results:
GTA REALTORS® Release May 2019 Stats TORONTO, ONTARIO, June 5, 2019 –
Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported 9,989 transactions through TREB’s MLS® System in May 2019.*
While this result represented a substantial increase of 18.9 per cent over the 15-year low in May 2018, it should be noted that the result was still below the average for month of May sales for the previous ten years, which stands at almost 10,300.
The year-over-year uptick in sales experienced so far in the second quarter of 2019 reflects spring polling results from Ipsos (undertaken on behalf of TREB) suggesting that the share of likely home buyers in the Greater Toronto Area has edged upwards since the fall.
“After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing. Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors. 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,”
said Mr. Bhaura.
The number of new listings entered into TREB’s MLS® System in May 2019 was up only slightly compared to May 2018, increasing by 0.8 per cent to 19,386. Year-over-year growth in new listings was far outstripped by year-over-year growth in sales. This means that market conditions continued to tighten in favour of sellers. The MLS® Home Price Index (HPI) Composite benchmark price was up by 3.1 per cent on a year-over-basis.
The average selling price for all home types combined was up by a similar 3.6 per cent to $838,540. Price growth was driven by the condominium apartment and townhouse market segments.
“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. If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate. This potential outcome underpins calls from TREB and other housing industry stakeholders to address roadblocks preventing a more sustainable and diverse supply of housing reaching the market. 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 Jason Mercer, Chief Market Analyst.
*The total sales in May 2018 were not as low as originally reported and have been upwardly revised to 8,402 from 7,834. 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.
Here are the average sale prices as reported by TREB for single family homes of all types in the GTA, including houses, townhouses and apartments starting at the beginning of 2018 until now:
Average Prices Month
$734,837 January 1st
$735,874 January 31st
$749,580 January 1st
$748,469 January 31st
Let’s do a quick analysis. 2018 started with $734,837 and we are now at $820,148, that’s an increase of $103,703 which is 14.11% increase over the seventeen month period. Expressed over 12 months, that’s a 9.963% annualized increase.
Let’s also go back to 2017 which was the year with the peak of the market and the sudden drop. 2017 started with $730,472 and we are now at $820,148, that’s an increase of $108,068 which is 14.71% increase over the twenty nine month period. Expressed over 12 months, that’s a 6.088% annualized increase.
So, as long as you didn’t buy in the Spring of 2017, the market produced a 6% return starting from the beginning of 2017, or an almost 10% rate of return from the beginning of 2018.
Why don’t we try the short term numbers for just 2019? The calendar year 2019 started with $749,580 and we are now at $820,148, that’s an increase of $88,960 which is 11.87% increase over the five month period. Expressed over 12 months, that’s a 28.48% annualized increase. The market will now settle down and we would expect that same number to hold throughout most of the year which will bring the rate down to something less that 14% annually.
So, what’s the percentage rate of increase?
From 2017 6% calculated
From 2018 10% calculated
From 2019 14% estimated
This looks like an attractive market for both Buyers and Sellers. We are looking at future upward increases.
Brian Madigan LL.B., Broker