September was a robust month with the Toronto Real Estate Board (TREB) reporting a 22 per cent jump in the number of sales last month for Greater Toronto Area (GTA) – 7,825 homes sold compared to 6,414 in September 2018. This result represents strong year-over-year sales growth however, transactions remain well-below the record September 2016 peak of more than 9,800 sales.
On a preliminary seasonally adjusted basis, the September 2019 sales level remained in virtually the same as the August 2019 result.
The supply of listings continued to be a concern in September, with new listings down by 1.9 per cent year-over-year to 15,611. We have experienced multiple months this year wherein the annual rate of sales growth outpaced the annual rate of new listings growth, resulting in the overall number of active listings at month-end being well-below last year’s levels. This speaks to tightening market conditions and an accelerating annual rate of price growth.
The annual rate of price growth in September reached the highest point so far in 2019. The MLS® Home Price Index (HPI) Composite Benchmark was up by 5.2 per cent on a year-over-year basis in September. The average selling price for all home types combined for the GTA was up by a similar annual rate of 5.8 per cent to $843,115.
On a preliminary seasonally adjusted basis, the September 2019 average selling price was up by 1.2 per cent compared to August 2019.
The price of a detached home in the GTA rose 4.1 per cent last month to $1.05 million on average. In the city of Toronto though, a detached house sold for an average of $1.37 million compared to $946,256 in the 905 areas outside the city.
We saw the highest price gains in the townhouse segment of the market for the month of September, which was a 6.8 per cent increase compared to September 2018, with an average price of $677,387. Condo prices in the GTA were up 4.2 per cent than the same time last year with an average sale price of $595,013. In the 905 areas, condo prices rose 9.2 per cent year over year to $497,403 on average. In the City of Toronto, the average sale price came in at $636,817, however most condominium sales occur in Toronto’s central core, and the average sale price in that area rose to a record $719, 341. The sale of an average priced condominium apartment is only 700 square feet of living space.
The rise in average sale prices continues to be driven by a lack of inventory. In the City of Toronto, the situation is a real concern with respect to affordability. At the end of September only 5,499 properties were listed for sale which means 1.9 months of inventory. With this limited inventory It is not surprising the average days on market for all properties sold in the city of Toronto is only 19 days and a remarkable 101 percent of the asking price.
The number of condos available for rent through the Multiple Listings Service in the GTA rose 30 per cent in the third quarter of this year compared to the same period last year. The 10,800 condos that were rented in the third quarter was a 17.3 per cent rise year over year.
Rental amounts on one-bedroom condos rose 4.5 per cent year over year in the third quart to $2,262 on average. Two-bedroom units rented for $2,941 on average, a 4.2 per cent increase over last year.
The pace of rent growth has slowed however it remains double the rate of inflation.
“Steady condominium apartment completions coupled with strong average rent growth have prompted many investor-owners to list their units for rent. If growth in rental listings continues to outstrip growth in rental transactions for a sustained period, we could see a more balanced market in the future,” said TREB president Michael Collins.
Overall, September results were much stronger than forecasted with the 905 regions contributing the greatest to the positive sales volume and prices for the month. It appears more and more people are having to look outside the city due to the affordability of housing in the city of Toronto. In Canada’s upcoming federal election all parties are proposing various measures to tackle affordability concerns.