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November 2019 showed strongest annual price growth of the year

November 2019 showed strongest annual price growth of the year

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November 2019 showed strongest annual price growth of the year

The growing demand for ownership housing continued in November to keep pace with what we’ve seen throughout the second half of the year. More than 7,090 sales were reported through TREB’s MLS system in November 2019, a 14.2-per-cent increase compared to November 2018. Detached homes and other ground-oriented types of housing led sales during this time.

Sales rose, yet listings continued to drop. The number of new listings entered into TREB’s MLS System in November was down 17.9 per cent when compared to last year. And, the number of active listings at the end of the month was also down by 27.2 per cent on a year-over-year basis.

Increased sales up against a constrained supply of listings is resulting in increased competition between buyers and stronger price growth across the market from condos to detached homes.

In fact, November saw the strongest annual rates of price growth for 2019, with the average selling price for all home types combined up by 7.1 per cent when compared to November 2018 to $843,637.

As more buyers impacted by the OSFI mortgage stress test come back to the market, alongside the ever-growing GTA population and declining negotiated mortgage rates, it’s likely demand for ownership housing will increase even further.

This could contribute to an increasing rate of price growth if we see no relief on the listings supply front. To alleviate this, bringing more housing supply online should be a top priority for all levels of government. And, when governments design policy to address supply issues they should be mindful of creating a housing supply that meets consumer demand.

What does housing supply look like next to consumer demand? The results from TREB-commissioned Ipsos polling surveys show that many intending buyers are still focused on purchasing ground-oriented housing.

We need to see the development of a greater diversity of mid-density housing to bridge the gap between detached homes and highrise condos. Alongside a diverse supply of housing, the GTA needs flexible housing market policies that will help sustain balanced market conditions over the long term.

It’s encouraging that the City of Toronto introduced HousingTO 2020-2030, a 10-year action plan to address present and future housing demands. Specifically, it’s great to see the plan’s comprehensive approach and acknowledgment of the important role of the full housing continuum, including ownership housing. TREB was pleased to participate in the External Advisory Committee, which helped form the plan.

Moving into the new year, policymakers at all levels of government should actively translate their acknowledgment of supply issues into concrete solutions to bring a greater array of ownership and rental housing online.

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 trebpres@trebnet.com.

For updates on the real estate market, visit trebhome.com.


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Continued resurgence in demand for ownership housing

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Continued resurgence in demand for ownership housing

With the increasing demand for ownership housing throughout the spring and summer, September 2019 reached a peak for the highest annual rate of price growth for 2019. In September, the average selling price for all home types combined was up by 5.8 per cent over September 2018 to $843,115.

Sales were also up by 22 per cent on a year-over-year basis, with 7,825 sales reported through TREB’s MLS system. Although this month’s market figures are still well-below the record peak of more than 9,800 sales in 2016, the growth of sales seen demonstrates two key trends: Strong year-over-year sales growth and a continued resurgence in demand for ownership housing.

Meanwhile, tightening market conditions can be seen through the lagging number of new listings which were down by 1.9 per cent when compared to 2018, more evidence of a continued lack of supply in the GTA housing market.

Building more diverse housing stock key to alleviating affordability pressures

With the election recently wrapped up and all federal political parties having included measures in their respective platforms to address affordability issues, particularly those faced by first-time buyers, it will be interesting to see how these promises unfold with the new government in place.

Most of the solutions proposed by the parties have been focused on addressing demand. Of course, demand-side policies are important, but it’s absolutely necessary for all levels of government to design policy that is focused on promoting a sustainable supply of different housing types.

Recent TREB-commissioned Ipsos polling results show that many intending buyers are still focused on purchasing ground-oriented housing such as semi-detached or townhomes. These results emphasize the need for a greater diversity of housing types to bridge the gap between detached homes and highrise condos.

The need for greater and more diverse ownership and rental housing is further underpinned by Statistics Canada’s most recent national population estimate, which represented the highest 12-month population increase ever recorded.

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 trebpres@trebnet.com. For updates on the real estate market, visit trebhome.com.

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The July 2019 GTA housing market

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The July 2019 GTA housing market

With 8,595 sales reported through TREB’s MLS System in July 2019, up 24.3 per cent on a year over year basis, it’s clear that demand for ownership housing has certainly strengthened and that more buyers are coming online after coming to terms with the OSFI mortgage stress test over the course of the last year-and-a-half.

Yet, with new listings growth lagging far behind sales at just a 3.7 per cent when compared to this time last year, it’s clear that market conditions are tightening and we’re beginning to see a case of growing pent-up demand with more competition between buyers in many neighbourhoods.

Increased competition between buyers has resulted in stronger price growth for many home types. In July, the average selling price increased by 3.2 per cent to $806,755 compared to July 2018.

Building more housing key to addressing affordability issues

The disparity between demand and supply is creating pent-up demand for ownership housing increase as well. This is largely the result of GTA residents continuing to see homeownership as both a goal and a sound long-term investment on the one hand, and need for GTA housing supply sitting at 40,000 to 50,000 each year due to strong population growth on the other hand.

As more buyers come back to the market in the coming months and years, we could end up with a marketplace that is chronically undersupplied and price growth reaching unsustainable levels. It is encouraging that both the City of Toronto and the provincial government are working on ways to address our housing supply issue and meet pent-up demand head-on.

For instance, a recent motion by Mayor John Tory has given City staff a strong mandate to report back on how to develop a greater diversity of housing options in traditional single-family neighbourhoods, including timelines. Similarly, the provincial government has launched consultations to spur on and speed up the development of different forms of housing in conjunction with its More Homes, More Choice Plan.

A focus on different forms of housing is key; we’re seeing price growth become increasingly driven by higher density lowrise home types, yet these are not the types of houses that have been commonly constructed over the past two decades.

With consumer preferences changing, in part due to the impact of the mortgage stress test, we need to see the development of a greater diversity of mid-density housing. With the recent announcements from the City of Toronto and Province of Ontario in mind, it seems that government policy is heading in the right direction.

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 trebpres@trebnet.com. For updates on the real estate market, visit trebhome.com.

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Behind the numbers : The GTA housing market in June 2019

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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 trebpres@trebnet.com. For updates on the real estate market, visit trebhome.com.

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