Although the Greater Toronto Area housing market took its “regular summer breather” last month, a scarcity of homes is keeping market conditions tight.
In its monthly housing report for August, the Toronto Regional Real Estate Board (TRREB) reported that strong demand for homeownership, coupled with declining levels of property supply, is fueling buyer competition and annual double-digit price increases.
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“Sales have accounted for a much higher share of new listings this year compared to last, and the story was no different in August,” TRREB’s chief market analyst Jason Mercer said in the market report. “There has been no relief on the supply side for home buyers, in fact, competition between these buyers have increased.”
Mercer added that as we move towards 2022, market conditions are expected to tighten further as population growth within the GTA begins to return back to pre-pandemic levels.
Here’s what we know about how Toronto’s housing market performed in August 2021.
Sales dropped below record 2020 levels
August recorded 8,596 home sales from across the GTA. This marks a 19.9 per cent decline from the same month last year, when a record-level of 10,738 transactions were logged.
The majority of sales took place within the 905 region with 5,593 transactions, with the 416 district accounting for the remaining 3,003 home sales last month.
Compared to all of the housing types analyzed, condo apartments reported the only increase in sales numbers, which jumped a total of 11.3 per cent annually between the 905 and 416 areas. Sales for detached, semi-detached and townhouse properties were down by 31.5 per cent, 29.3 per cent and 19 per cent year-over-year.
New housing supply tumbled by more than 40 per cent
The quantity of new homes arriving on the market took a dive during August, falling 43 per cent yearly from 18,599 to 10,609 listings.
With new listings at their lowest levels in a decade, TRREB’s president, Kevin Crigger, noted that this trend is “alarming.” With supply struggling to keep up with market demand, Crigger pointed out in the report that this situation will become worse once Canadian immigration resumes.
Home prices continue to march upwards
The price of a GTA home continued to nudge upwards last month, with the average selling price for all home types rising by 12.6 per cent annually to $1,070,911. The MLS Home Price Index Composite benchmark for August also jumped by 17.4 per cent year-over-year.
The low-rise segment of the market reported the highest price gains last month. Average prices for detached properties across the GTA rose 21.4 per cent annually to $1,423,807. Semi-detached houses and townhomes recorded increases of 13.9 per cent and 17.7 per cent, boosting the average price to $1,031,580 and $873,961.
Condo apartments logged the lowest level of price growth among the other GTA housing types, but still grew by 9.4 per cent to an average of $688,568 in August.
The federal election promises housing supply, affordability fixes
With the federal election less than two weeks away, the three frontrunner parties have laid out their platform promises for mending Canada’s housing market. Potential policies have been proposed to boost the country’s housing arsenal, limit foreign ownership and redevelop underutilized properties.
Crigger said that working with local governments to boost supply should take precedence over demand control measures.
“Working with provincial and municipal levels of government on solving supply-related issues is much more important to affordability than interfering with consumer choice during the home buying and selling offer process or revisiting demand-side policies that will at best have a short-term impact on market conditions,” he said.