November has been a slower month for the Greater Toronto real estate market, with fewer sales and new homes coming to market – but prices continue their upward trajectory, according to the latest numbers from the Toronto Real Estate Board.
The report reveals a total of 6,251 homes exchanged hands across the TREB region, a decline of 14.7%. Part of this is due to considerably different market conditions than what was seen in 2017, when buyers, spurred to close deals before tougher mortgage rules took effect in January, created unusually high demand in the year-end market. The decline was more moderate on a monthly basis, with sales down 3.4% from October.
Listings Shortage Boosts Prices
However, as only 10,534 homes were newly listed for sale throughout the month – down 26% year over year – buying conditions have become more competitive, resembling more of a sellers’ market than the previously balanced environment. That’s helped push home values higher, as the average price rose 3.5% to $788,345.
Related read: Buyers’ and Sellers’ Markets Across Ontario
“New listings were actually down more than sales on a year-over-year basis in November,” stated TREB President Garry Bhaura. “This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth.”
Lower-Priced Homes Most Popular
Condos and semi-detached homes saw the greatest increases in price of all home types, up 7.5% to $556,723 and 8.3% to $791,760, respectively.
That’s because homes at a lower price point have been flying off the proverbial shelves as buyers continue to be squeezed by new mortgage stress testing, further compounded by rising interest rates. For example, buyers are likely finding greater affordability among smaller home types such as Mississauga condos and Toronto townhouses, and in secondary markets, such as homes for sale in Etobicoke.
“Home types with lower average price points have been associated with stronger rates of price growth over the past few months,” says Jason Mercer, TREB’s director of market analysis.
“Given the impact of the OSFI-mandated mortgage stress test and higher borrowing costs on affordability, it makes sense that the condo apartment and semi-detached market segments experienced relatively stronger rates of price growth in November, as market conditions in these segments remained tight or tightened respectively over the past year.”
416 Market Gets Tougher for Buyers, 905 Sees Better Balance
In the City of Toronto, a sharp decline in new listings of 19% has pushed the market into sellers’ territory despite 13% fewer home sales; as a result, the average home price in the 416 rose 4.8% to $842,483. The 905 markets are also experiencing firmer balance due to a considerable contraction in new listings (-29%), pushing prices up 2.4% to $750,721, despite 15.5% fewer homes sold over the course of the month.
Check out the infographic below to see how sales trends have changed month over month and year over year in the TREB and 416 markets.