Property prices in the suburbs of the Greater Toronto Area are outpacing those in the 416 this September, according to the Toronto Real Estate Board’s monthly housing report.
While the average selling price for all home types across the entire GTA was up by 5.8% to $843,115 year over year, much of that growth is due to the 905.
While prices for single-family homes edged up just 1.2% in the 416 to $1,360,623, they rose 4.5% to $946,256 in the 905. Similarly, while condos posted gains of just 3.3% in the City of Toronto to $636,817, they jumped 9.2% in the 905 to $497,403.
It’s unclear why the 905 has done so well this September when price growth usually lags behind the City of Toronto. The 905 was hit the hardest in 2017 when the provincial government announced the Fair Housing Plan and its 16 measures to cool the market and again in 2018 when the federal bank regulator introduced a stress test for mortgages. Prices for single-family homes dropped essentially overnight and now routinely sell for under asking. Meanwhile, single-family homes in the 416 continued to rise, albeit slowly.
Still, even in the 905, less expensive regions continued to rise — it was mostly single-family homes over $2 million that saw a serious correction. Prospective buyers still flocked to these less expensive areas, where they could snag a detached house for under $1 million — considered a steal anywhere within easy driving or commuting distance of downtown Toronto.
Milton homes for sale, for example, rose 14.5% to $892,692 in September 2019 from $779,287 in September 2016. Houses for sale in Oshawa, one of the lowest-cost cities in the GTA, climbed 9.5% to $566,008 this September from $516,670 in September 2016.
September overall was simply a healthy month for the real estate market. Sales skyrocketed 22% year over year, to 7,825 although the number of transactions are still far below their record peak in September 2016 of 9,800.
But now that sales have picked up, it’s made clear the real crisis is the continued shrinking supply. Inventory is already tight, and one of the main reasons prices can’t stay depressed for long. But now the situation is worsening, with new listings down by 1.9% year over year to 15,611 and active listings down 14.1% to 17,254. If sellers keep sitting on their properties, market conditions will tighten further and prices will rise.
For more information on Toronto’s September housing market, check out the infographic below:
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Writer: Danielle KubesDisclaimer: All investing can potentially be risky. Investing or borrowing can lead into financial losses. All content on Bay Street Blog are solely for educational purposes. All other information are obtained from credible and authoritative references. Bay Street Blog is not responsible for any financial losses from the information provided. When investing or borrowing, always consult with an industry professional.