Both sales and property prices in the Greater Toronto Area are up this July for the first time this year, reports the Toronto Real Estate Board.
Sales increased 18.6 per cent across the GTA while the average price rose 4.8 per cent to $782,129, from July 2017.
The month-over-month data is strong as well, with June to July showing the highest level of seasonally adjusted sales and prices all year, up 6.6 per cent and 3.1 per cent respectively.
Psychological Impact of Ontario Fair Housing Plan Over
The first half of 2018 saw a market that was recovering from the effect of government legislation and new mortgage rules specifically designed to cool the arena and reduce debt risk. It had plunging sales, houses taking twice as long to sell and prices that had fallen from the year before.
All that seems to have passed.
“We have certainly experienced an increase in demand for ownership housing so far this summer,” said Jason Mercer, TREB’s director of market analysis.
“It appears that some people who initially moved to the sidelines due to the psychological impact of the Fair Housing Plan and changes to mortgage lending guidelines have re-entered the market.”
Supply is Huge Factor in Price Swings
This “psychological impact” was always likely to be temporary, as supply remains low. New listings are down 1.8 per cent from July 2017. Without an increase in supply, any dip in prices was always likely to be temporary. (Other factors that could depress prices are either a surprise massive jump in interest rates and an extreme shock to the Canadian economy, both unlikely.)
“The new provincial government and candidates for the upcoming municipal elections need to concentrate on policies focused on enhancing the supply of housing and reducing the upfront tax burden represented by land transfer taxes, province-wide and additionally in the City of Toronto,” said TREB President Garry Bhaura.
Breaking It Down by Property Type
Previously in 2018, condos were the standout in terms of the fastest price growth, while detached Toronto houses, especially in the 905, had declined the most.
Largely, that remains the case.
Detached houses in the 905 still have the slowest price growth and are the only market segment which has a price decline year-over-year, slight as it may be, at 0.2 per cent to $907,347.
Across all TREB regions, condos continue to show the strongest price growth, up 8.9 per cent overall to $546,984. Semi-detached houses healthy price growth at 6 per cent.
Sales Do a Turnaround
Sales growth is where the real change from previous months can be seen.
Earlier this year, detached homes for sale in Toronto were down over 30 per cent, and sales for all market types were down some months in the double digits, including condos. The situation has completely reversed itself.
Sales are now all up for all property types, demonstrating increased demand in the typically busy summer months.
Detached homes now have 26 per cent sales growth, semi-detached 6 per cent and condos 9 per cent.
The amount of time that property takes to sell is lower than in 2017, but the gap is closing. Earlier this year it took, at times, twice as long to sell a property. Now, it takes only 25 days versus 21 in July 2018 — just four extra days.
TREB is optimistic about continued price and sales growth in the future, saying that “the annual growth rate looks to be trending toward positive territory in the near future.”
Check out our infographic below for all the details: