{"id":17206,"date":"2020-02-06T11:19:46","date_gmt":"2020-02-06T16:19:46","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=17206"},"modified":"2020-02-06T11:30:57","modified_gmt":"2020-02-06T16:30:57","slug":"trreb-january-2020","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/trreb-january-2020\/","title":{"rendered":"2020 Kicks Off with Sizzling Home Sales and New Listings Shortage: TRREB"},"content":{"rendered":"\n


The first round of 2020 data for Toronto\u2019s real estate market is in and by all accounts, the year is shaping up to be one of ferocious competition among home buyers. The Toronto Regional Real Estate Board<\/a> (TRREB) reports that the growing supply-and-demand gap that characterized the 2019 market was strongly evident in January, as soaring sales and plunging new supply light a fire under home price growth.<\/p>\n\n\n\n

A total of 4,582 transactions occurred across the GTA during the month, up 15.4% from the same time period last year. Meanwhile, 7,836 new listings were brought to market, a year-over-year decline of 17.1%. That\u2019s pushed the GTA from the relatively balanced conditions enjoyed throughout 2019 to the brink of a sellers\u2019 market, with a sales-to-new-listings ratio of 58.4%. This ratio, which measures the level of buyer competition in the market, is calculated by dividing the number of home sales by the number of new listings over the course of the month. 

A percentage between 40 \u2013 60% indicates the market is balanced, while below and above that threshold indicate buyers\u2019 and sellers\u2019 conditions, respectively. To put today’s SNLR into perspective, it sat at 41.9% this time last year, when the market remained in its post-policy slump.<\/p>\n\n\n\n

Price Growth Picks Up Scorching Pace<\/h2>\n\n\n\n

Of course, when sales growth greatly outpaces that of new listings, home prices are sure to follow. The average price of a GTA home rose 12.3% to $839,363 in January, with detached houses and condos driving the bulk of the increase. As a result of more higher-priced Toronto houses<\/a> in the mix, the MLS Home Price Index, which measures the overall value of homes sold, rose by 8.7% y-o-y, the largest annual rate of growth measured since October 2017.<\/p>\n\n\n\n

This trend played out in the City of Toronto as well as in the 905-area markets, with average home prices exceeding the $800,000 mark in both regions. Toronto saw a total of 1,603 homes trade hands, up 13.3%, while new listings fell 16.2%. That drove prices by 11.4% to an average of $884,385, while the city\u2019s SNLR sits at 60.8%.<\/p>\n\n\n\n

In the 905 markets, a total of 2,978 transactions occurred, up 16.6%, while new supply was down by -17.5%. As a result, average price rose 11.4% to $88,129, while the SNLR rose to 57.2%.<\/p>\n\n\n\n

Lack of Supply Is Key Concern, Says TRREB<\/h2>\n\n\n\n

TRREB President Michael Collins says that as the mismatch between sales and supply deepens, buyers will be more likely to face hot market aspects this year such as bidding wars, homes selling for considerably higher than their listing price, and potential buyer gridlock.<\/p>\n\n\n\n

\u201cWe started 2020 where 2019 left off, with very strong growth in the number of sales up against a continued dip in the number of new and available listings,\u201d he stated in TRREB\u2019s release. \u201cTighter market conditions compared to a year ago resulted in much stronger growth in average selling prices. Steady population growth, low unemployment and low borrowing costs continued to underpin substantial completion between buyers in all major market segments.\u201d<\/p>\n\n\n\n

That demand has been heating up for detached houses is also an indicator that the buyers that are present in today\u2019s market have improved purchasing power; Jason Mercer, TRREB\u2019s chief market analyst and director of service channels, points out that house sales are poised to see huge demand this year, as the effects of the stress test appear to be subsiding.<\/p>\n\n\n\n

\u201cA key difference in the price growth story in January 2020 was in the low-rise market segments, particularly with regard to detached houses,\u201d he stated. \u201cA year seems to have made a big difference. It is clear that many buyers who were on the sidelines due to the OSFI stress test are moving back into the market, driving very strongly year-over-year sales growth in the detached segment. Strong sales up against a constrained supply continues to result in an accelerating rate of price growth.\u201d<\/p>\n\n\n\n

2020 Forecast Calls for Continued Hot Sales<\/h2>\n\n\n\n

TRREB has also released their fifth annual Market Year in Review and Outlook, and, you guessed it \u2013 the main themes for 2020 will be rising sales and a lack of supply, as the number of new listings will likely be flat, or even below, where they were last year. <\/p>\n\n\n\n

While this spells a good news story for sellers, who will likely fetch top dollar for their listings, the challenge will lie in moving up the market for first-time and repeat buyers alike, as available listings will be priced at a premium and attractive stiff competition. All this will be underlined by the factors that make the GTA a strong market, such as high levels of immigration and thriving job market.  <\/p>\n\n\n\n

Said Collins, \u201cRobust regional economic conditions, strong population growth and low borrowing costs will support increased home sales in 2020. Market conditions will become tighter, as transactions will continue to outpace the growth in available listings. The resulting increase in competition between buyers will likely result in acceleration in price growth across all major market segments.\u201d<\/p>\n\n\n\n

TRREB forecasts home sales will hit between 90,000 \u2013 97,000 this year, up 10.5% from 2019. Higher-density low-rise home types, such as semi-detached houses, townhouses, and condos for sale in Toronto<\/a>, will remain the most popular home types and account for much of the sales growth.<\/p>\n\n\n\n

The average home price is expected to rise close to 10% to $900,000, again driven by increases in the condo, townhouse, and semi-detached segments. However, TREB warns, should detached homes catch up to this pace of price growth, the average price could soar well beyond the $1-million mark, meaning the market could see a return to the unsustainable levels last seen in 2016 \u2013 2017. 

However, it remains to be seen if the government will step in again with measures to cool the demand side of the market, a move that has proven to only temporarily aid the situation, says Mercer.<\/p>\n\n\n\n

\u201cAfter more than three years of slower market activity brought on largely by changes in the housing-related policies at the provincial and federal levels, home sales will now move closer to demographic potential in 2020,\u201d he states. \u201cThe key issue, however, will be the persistent shortage of listings. Without relief on the supply front, the pace of price growth will continue to ramp up. Policymakers need to understand that demand-side initiatives on their own will only have a temporary effect on the market.\u201d<\/p>\n\n\n\n

Check out the infographics below to see how sales and prices have increased across all home types in the Greater Toronto Area and City of Toronto markets in January:<\/strong><\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n


<\/p>\n","protected":false},"excerpt":{"rendered":"

The first round of 2020 data for Toronto\u2019s real estate market is in and by all accounts, the year is shaping up to be one of ferocious competition among home buyers. The Toronto Regional Real Estate Board (TRREB) reports that the growing supply-and-demand gap that characterized the 2019 market was strongly evident in January, as […]<\/p>\n","protected":false},"author":39,"featured_media":17209,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"footnotes":""},"categories":[1107,33,181],"tags":[],"class_list":["post-17206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-infographics","category-real-estate-news","category-toronto-real-estate"],"yoast_head":"\n2020 Home Sales Off to Sizzling Start - January TRREB | Zoocasa<\/title>\n<meta name=\"description\" content=\"The first round of 2020 data for Toronto\u2019s real estate market is in and by all accounts, the year is shaping up to be one of ferocious competition among\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zoocasa.com\/blog\/trreb-january-2020\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2020 Home Sales Off to Sizzling Start - 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