Photo: Hailey Toft/Flickr
Never before have so many homes changed hands across the Greater Toronto Area in the month of July, but the board representing the region’s realtors isn’t celebrating.
“Policy makers need to be focusing on solutions to the sustained lack of low-rise inventory throughout the GTA,” said Larry Cerqua, president of the Toronto Real Estate Board (TREB), in a statement announcing a record 9,989 home sales across the GTA last month.
BuzzBuzzNews emailed TREB asking what those solutions would look like, but did not hear back as of publication. However, afterwards TREB sent a statement from Jason Mercer, its market analysis director, highlighting existing policies possibly affecting supply.
“Particularly, provincial and municipal land-use and tax policies that may be suppressing the supply of housing for sale could be having a very significant impact on the GTA market,” Mercer said.
A lack of supply, especially in the low-rise segment, is widely acknowledged as a major factor driving up existing home prices in the GTA, and it’s a trend that persisted in July, according to the board.
At the end of the month, there were 11,346 homes of all types listed for sale on TREB’s multiple listing service (MLS) system, representing a 31.9 per cent drop compared to what prospective buyers were looking at in July 2015.
Meantime, 13,542 homes were listed for sale during the whole of July, a decrease of 7.4 per cent from a year ago.
“Unfortunately, listings for single-detached and semi-detached houses and townhouses continue to be in short supply,” Cerqua continued. “The result has been an increase in pent-up demand and annual rates of price increases well above the rate of inflation.”
The average price of a detached home in the GTA was $952,983 in July, having surged 21.1 per cent compared to that month last year. While semi-detached homes in the area sold for a more affordable $667,946, they showed year-over-year price growth of 17.1 per cent.
On average, GTA townhouses sold for $535,690 in July, up 13.9 per cent year-over-year, while condos remained most affordable at $406,865, nevertheless having climbed 9.2 per cent since that month in 2015.
TREB said the fact that sales are up year-over-year — they increased 1.8 per cent over July 2015’s total — while listings have fallen is “the continuation of a troubling trend in the GTA.”
Mercer chalked up the record-breaking sales tally to a number of factors, from employment to favourable mortgage rates.
“Relatively strong labour market conditions, above-inflation average income growth, and record low borrowing costs have kept many households confident about purchasing a home,” says Mercer in a statement.
“As long as very strong buying intentions are up against an extreme shortage of listings, except home price growth to greatly outpace the rate of inflation.”