Both prices and sales in the Greater Toronto Area are up this August, reports the Toronto Real Estate Board (TREB), continuing a positive trend first seen in June.
TREB reported 6,839 sales through the MLS system, up 8.5 per cent from last August. The average property in the GTA now sells for $765,270, up 4.7 per cent year over year.
These numbers have trended upwards all summer, after a rocky first half of the year for Toronto real estate, which was still recovering from several new rules and changes.
“It is encouraging to see a continued resurgence in the demand for ownership housing. Many home buyers who had initially moved to the sidelines due to the Ontario Fair Housing Plan and new mortgage lending guidelines have renewed their search for a home and are getting deals done much more so than last year,” said Garry Bhaura, TREB president.
“In a region where the economy remains strong and the population continues to grow, ownership housing remains a solid long-term investment.”
The Ontario Fair Housing Plan that Bhaura refers to was announced in April 2017 and consisted of 16 measures designed by the province to cool the market, which was then considered overheated. It caused widespread market uncertainty and declining prices, especially for expensive detached houses for sale.
The second guideline that shook up the market, and took effect January 1st of this year, was tighter mortgage lending rules and a stress test across the board. Borrowers of new low-ratio mortgages must now qualify for a mortgage of at least 5.34 per cent, or their contract rate plus 2 per cent – whichever is higher.
This reduced affordability for buyers and pushed many into the least expensive property segment. It’s suspected that this new guideline is largely responsible for the the double-digit price growth seen in condos all year, and especially in the extremely tight market of condos for sale in downtown Toronto.
Even now, although all market segments are in positive territory, condos still lead the pack in year-over-year price growth. Condos are up 6.4 per cent to $541,106, while detached houses are mostly stable, up only 1.2 per cent to $977,187. Semi-detached and townhouses are both up just over 3 per cent to $741,873 and $624,472 respectively.
Sales, which at certain points in the year were down as much as 30 per cent, have also recovered. Especially noteworthy is the rebound in sales for detached houses, up in August 17.7 per cent. Detached houses showed the steepest decline out of all property types earlier this year, and were down 28.4 per cent year-over-year as recently as May 2018.
Check out the infographic below for numbers on all housing types, in both the 416 and 905:
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Writer: Danielle Kubes
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