Behind the numbers : The GTA housing market in June 2019
The story of the June market is one of increased demand and constrained supply. With sales up 10.4 per cent on a year-over-year basis to 8,860 and new listings down by 0.4 per cent to 15,816, it’s clear that market conditions have tightened.
With sales accounting for a greater share of listings, competition between buyers has arguably increased in many parts of the GTA. Not surprisingly, increased competition between buyers has underpinned moderate year-over-year increases in home prices. The average selling price for June was up by three per cent over June 2018 to $832,703. Through the first half of 2019, price growth has been driven by sales of higher-density dwellings such as semi-detached houses, townhomes and condos. This makes sense given that these are typically less expensive home types that are becoming more desirable options for buyers under the new Office of Superintendent of Financial Services (OSFI) mortgage stress test regime.
Given that we expect continued growth in the GTA population over the long-term, we should also expect the demand for ownership and rental housing to increase as well. The question becomes how do we ensure there is adequate housing supply to meet demand, keeping the market balanced with a sustainable pace of price growth over time?
Part of the answer seems to lie in building more mid-density housing to provide GTA buyers with more affordable housing options. There needs to be more of this type of housing to bridge the gap between condominium apartments and detached houses. We are encouraged by the recent vote by Toronto City Council to move forward on tackling missing middle housing, and the consultation launched by the Province on building different types of housing that people need and can afford.
Finding ways to add more semi-detached, townhomes and plexes, for example, to existing neighbourhoods and creating new developments with a full continuum of housing options, must be a key component of municipal, provincial and federal housing plans and policies moving forward.
As we move toward a federal election this fall, it will also be crucial for those vying for public office to make clear their thoughts on housing policy, including policies associated with mortgage lending such as the OSFI two percentage point mortgage stress test and allowable amortization periods on insured mortgages – two areas where some flexibility is arguably warranted.
Reconsidering these policies, with an eye toward flexibility, could help ensure that housing policy can adapt to different stages of the economic cycle and avoid volatility brought on by short-term market distortions.
Michael Collins is president of the Toronto Real Estate Board, a professional association that represents 54,500 professional realtor members in the Greater Toronto Area. You can contact him at firstname.lastname@example.org. For updates on the real estate market, visit trebhome.com.