August was a good month for GTA real estate. Transaction volume was down compared to July’s numbers, but relative to this time last year, the market showed promise. The number of home sales rose 13.4% year-over-year, to just over 7,700 properties – a number on par with the 10-year average.
On the flip side, new listings were down by 3%. Looking at 2019 so far, growth in sales has well exceeded the growth in new listings. At the end of August, the number of active listings was down by more than 11% compared to the same time last year. Buyers are hungry and supply isn’t keeping up with demand.
Prices across the GTA rose 3.6% YoY. Growth in Toronto Central* was particularly strong – especially in the Semi-Detached market where the few homes that did sell, sold fast and in most cases, over the list price.
In Toronto Central, condos were selling for 4.8% more than last August, with an average price over $800,000. It’s safe to say condos aren’t exactly the market entry-point they used to be. To buy an average condo, buyers needed at least a $70,000 deposit, and a household income higher than $100,000 to pass the mortgage stress-test. The good news (depending on how you look at it) is that given prices are already pretty out-of-reach, I don’t expect condo prices to continue rising as drastically as they have been.
That said, there is nothing to indicate a change in the prevailing resale market until the end of 2020. Wages rose by 3.8 percent in August and over 81,000 new jobs were added to the Canadian economy. If Canadian businesses continue to create jobs, it’s unlikely the Bank of Canada will reduce interest rates. Put it all together, and we’ve got a recipe for a stable real estate market moving forward.
Looking to the immediate future, I expect autumn will produce an active market with more inventory. If you’d like to be amongst the group of buyers or sellers taking advantage of the busy fall market, get in touch. Let’s talk about your needs and formulate the best plan of action.