Photo: James Bombales
After a slow start to the year, Toronto’s housing market continued to rebound and concluded 2019 on a higher note.
The average selling price in December 2019 grew to $837,788 across the Greater Toronto Area, an almost 12 percent increase on a year-over-year basis, according to new data released by the Toronto Real Estate Board (TREB) this week. Jumping four percent from 2018, the average price for the 2019 calendar year reached $819,319.
In December, detached homes experienced the steepest price hike, with the average price rising 11.6 percent year-over-year to $1.05 million. Condominiums had a similar price increase, marching upward by 10.4 percent to an average price of $612,464.
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The MLS Home Price Index (HPI) Composite Benchmark also saw signs of growth last month, rising 7.3 per cent year-over-year, continuing the upward acceleration that has been in play since June 2019.
Throughout the year, condos showed some of the biggest price gains compared to other housing types. In the city of Toronto, average condo prices shot up 6.8 percent over the calendar year, and as high as 7.1 percent across the rest of the GTA. While there wasn’t much of a price surge for detached homes overall — 0.4 percent in the “416” and 1.4 percent in the “905” — the demand for single-family homes only got stronger. In the calendar year, sales for detached homes in the city increased 16 percent year-over-year and 19.7 percent for the remainder of the GTA.
Meanwhile, GTA residential sales saw a 17.4 percent year-over-year escalation in December. Thanks to a boost in activity in the second-half of 2019, the total number of sales for the calendar year rounded out to 87,825, a 12.6 percent increase from the year prior. This brings us out of a decade-low sales slump, which dropped to 78,015 in 2018. Now, sales are on par with the median annual sales for the past decade. A newly implemented stress test and a lethargic economy led to a slow start for the 2019 market, though population growth, lower rates and a strengthening labour market helped to turn a corner post-winter.
“As anticipated, many home buyers who were initially on the sidelines moved back into the marketplace starting in the spring,” said TREB President Michael Collins in a statement coupled with the data. “Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year.”
While sales and prices are flying sky-high, the same can’t be said for the GTA’s inventory supply. The number of new listings submitted into the MLS system was down 2.4 percent year-over year. Over the last 10 years, the report highlights that the annual amount of new listings has fluctuated between 150,000 and 160,000, all the while, prices have only continued to increase. As industry voices have expressed before, future price spikes amid a low housing supply are likely to knock down market affordability.
TREB Chief Market Analyst, Jason Mercer, notes in the report that policymakers have acknowledged that a shortage of rental housing and diverse ownership options are continuing to constrain housing affordability in the region as sales increases dominate supply.
“Taking 2019 as an example, we experienced a strong sales increase up against a decline in supply,” stated Mercer. “Tighter market conditions translated into accelerating price growth. Expect further acceleration in 2020 if there is no relief on the supply front.”