I’ll get right to the point. We all enjoyed some time away from reality (and realty) over the summer months. So let’s take a look at what’s been happening:
It’s important to note that the statistics quoted herein include all housing types. Each housing segment has its own story to tell. Condos and townhouses typically do better in terms of the number of sales because they’re entry level and affordable (for the most part). So yes, this piece speaks to the market as a whole.
The Toronto benchmark price is no longer falling on a year-over-year basis. It returned to positive territory in August, marking an end to a correction that lasted five months according to statistics released this morning by the Toronto Real Estate Board.
In order to understand our current market conditions, let’s take stock:
- Seller’s Market: sales-to-listings ratio reaches 55% or more; more buyers than homes for sale
- Balanced Market: sales-to-listing ratio is between 34% and 54%; about the same number of homes for sale as there are buyers
- Buyer’s Market: sales-to-listing ratio is 35% or less; more homes for sale than there are buyers
What’s happened since May:
On a seasonally adjusted basis, the average selling price was up by 1.1 percent compared to April 2018. The sales-to-listings ratio was 41%: seller’s market.
The average selling price edged up by two percent on a year-over-year basis to $807,871 in June 2018. The average selling price was also up by 3.3 percent month-over-month (seasonally adjusted) between May 2018 and June 2018. 50% sales-to-listings ratio means it was a balanced market.
Preliminary seasonal adjustment pointed to strong month-over-month increases of 6.6 percent and 3.1 percent respectively for sales and average price. Year over year, the average selling price was up by 4.8 percent to $782,129. New listings in July 2018 were down by 1.8 percent year-over-year. It was still a balanced market with a 50% sales-to-listings ratio.
Average selling price, at $765,270, was up compared to the same month in 2017, by 4.7 percent. The seasonally adjusted August 2018 average selling price was down slightly by 0.2 percent compared to July 2018, following strong monthly increases in May, June, and July. The current sales-to-listings ratio is 56% which means we’re now in a seller’s market.
RBC’s Housing Commentary Report Highlights and Outlook (released just this morning):
- Rising interest rates, the stress test, and affordability issues will leave little room for prices to move higher in the months ahead.
- Low single-digit (year-over-year) increases will be the norm for a while.
- They see little that would disrupt the current balance between demand and supply in the market.
What do I think?
In the short term, economists might be right. However, many GTA neighbourhoods continue to suffer from a lack of inventory. The powers that be should be looking to provide a solution to our housing shortage by exploring high density, affordable options in areas where people can find work, so that in the long run, we don’t see a repeat of what happened in 2016 and 2017.