The Toronto Real Estate Board is predicting, based on the record number of house and condo sales made in July, that the GTA might be on pace for a record-setting 2015. Sales of homes and condos in the City of Toronto and 905 regions have not been this high since 2007, forcing an ever growing number of critics to concede to the idea that Torontonians are in for a major housing price correction. The proverbial bubble might just be ready to burst.
CBC News, discloses what the TREB market analysis for July revealed:
- 9,900 homes were sold in the GTA, up 8% from the same time last year.
- Condo sales increased even more so, up 14.4% year-over-year, with 2,429 condo suites sold in July
- The average selling price for houses in the GTA was $609,236 in July — up 10.6% year-over-year. The MLS Home Price Index for the Toronto area rose 9.4%.
- Average condo prices in the GTA rose by 4.1% to $394,504. Prices in the 905 region went up 5%, to $317,564.
- In the city of Toronto, the average selling price of a detached home slipped below $1 million for the first time since February, to $996,770, representing a 7.1% increase from the average a year ago. This is in spite of the fact that sales of detached homes decreased by 0.7% in the City of Toronto.
- The average selling price of detached homes went up 13.3% in the City of Toronto, to an average of $996,770 and up 14.2% in the 905 regions and an average sale price in July of $729,261.
- Semi-detached sales were up 6% across the GTA, with the average sale price of a semi in the 416 region being $716,160 (up 12.7%), and $499,821 in 905 regions (up 10.4%).
- Townhouse sales were up 3.4 per cent across the GTA. The average sale price in the City of Toronto was $536,212, up 8.3% year over year, compared to $448,785 in the 905 regions, up 11.5%.
As mentioned earlier, the previous sales record (for the entire year of sales in the GTA) was set back in 2007, when 93,193 homes changed hands. However, the average selling price back then was only $376,236. A far cry from where it currently sits.
Susan Pigg of The Toronto Star, suggests that the increase in condo sales came at the expense of low-rise homes, particularly detached homes, the price of which has “skyrocketed.” In addition, Pigg argues that a “balanced market” (one where buyers and sellers have “equal footing”), must have six months worth of housing inventory available for purchase, which Toronto hasn’t seen for years as demand consistently outweighs supply.
Jason Mercer, the Toronto Real Estate Board’s director of market analysis, had this to say in a statement:
“With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers. Not surprisingly, this supported further price increases well above the rate of inflation.”
Mark McLean, president of the board, also made a statement:
“As we move towards a new record for home sales this year, it is important to point out that home ownership demand has been driven not only by low borrowing costs, but also by the fact that the greater Toronto area economy has been performing quite well, with the unemployment rate lower compared to last year.”