Toronto’s housing market is witnessing a strong comeback of sorts for April 2019 as highlighted by latest reports and studies. This should be welcome news for developers and industry professionals who were previously dreading a lacklustre spring housing market in a manner of speaking. However, the market is still alive and kicking which is good news by all means!
Key market trends witnessed in Toronto for April 2019
Toronto’s realty market witnessed several developments last month. These included the following:
- Sales figures for Toronto real estate increased by a whopping 17% in April 2019 as compared to April 2018.
- The average selling price also increased by a moderate 1.9% to touch $820,148 as per reports.
- 9,042 units were reported in transactions by TREB (Toronto Real Estate Board) in comparison to 7,744 units in transactions for April 2018.
- Sales volumes increased by 11% last month as compared to sales figures in March 2019 on the seasonally adjusted framework.
- The growth in sales figures is indication enough of a stabilizing effect on the Toronto property market which has been battling a prolonged slump in recent times.
- There was a cooling effect seen in the housing market in Toronto in 2018 on account of stricter mortgage rules and higher taxes for foreign property buyers among other official measures.
- Toronto’s property market comeback is majorly attributed towards the firm economic aspects including growing employment and immigration along with central bank initiatives to lower borrowing costs in recent times.
- TREB officials have stated that the market is catching up now as compared to the first quarter of 2019 which is good news for the industry overall.
- The number of new listings have also increased by 8% as compared to the year-ago period.
- Demand still outstrips supply levels as per TREB reports since there is lower supply available in Toronto which may lead to further price increases.
- TREB has highlighted a tightening of market conditions down the line as a result.
- Benchmark prices (adjustable based on home type) have gone up by 3.2% as compared to the year-ago period. This is reportedly the swiftest such appreciation witnessed in a whole year.
- Sales increases for April 2019 were majorly fuelled by the growth in the single-family home category. Price growth was driven by condominiums which saw prices going up by 5.1% as compared to April 2018.
- The MLS index for home prices highlighted growth in benchmark prices and average selling prices which touched $820,148 from $804,926 previously.
- Low-rise apartments and condominiums which are usually high-density realty categories, are being credited for price growth. Average condo prices touched $588,168.
- Detached homes witnessed average prices coming down by 1.3% (year on year) to touch $1,018,147 and this was majorly due to decreasing prices in 905 suburban areas near Toronto.
- The 416 saw detached home average prices remaining relatively stable and unchanged at $1,355,764 on a year-on-year basis.
- The 905 had detached home prices coming down by 1.7% to stand at $914,249 as per studies.
Other trends to make a note of
Homebuyers in and around Toronto now favour easier commuting and proximity to their workplaces and also lower property prices. They are not that eager anymore to buy homes in suburban locations that offer more space by way of multiple bedrooms and added areas like backyards for example. First-time homebuyers are clearly opting for condos near their workplaces as compared to affordable suburban housing options. Detached homes are still costly in Toronto and its suburbs and hence the higher demand for condos and other apartments.
The mortgage stress test was brought in by the OSFI (Office of the Superintendent of Financial Institutions) for cooling down the housing market in Toronto which was deemed to be heating up exceedingly. The mortgage stress test allowed just those who could pay more than 20% as the down payment, to be eligible for getting mortgages. The maximum amount to be borrowed by customers was also lowered as a result of these regulations. This has naturally impacted purchase decisions by several first-time homebuyers as per experts. However, going by the April 2019 market trends, the realty sector in Toronto is certainly recovering fast. The number of new listings have gone up to 17,205 units from 15,933 units on a year-on-year basis, annual growth rates for listings are still lower as compared to sales figures. As a result the tighter market may lead to prices increasing further as opined by experts and TREB alike. The new housing reforms from the Ontario Government may help in fixing the supply issue in the future as per industry watchers.
Secondary suites are also expected to be a major trend in the Toronto housing market akin to downtown Toronto where they are already doing well. There is considerable demand for basement apartment units and the provisions introduced in the More Housing, More Choice bill from the province will create more scope for these secondary suites that can be added as garages, coach homes and laneway homes. Average rentals for 1 bedroom and 2 bedroom rentals in Toronto have increased by 7.3% ($2,150) and 4.1% ($2,815) as well according to reports.