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 firstname.lastname@example.org.
For updates on the real estate market, visit trebhome.com.