The Toronto Real Estate Board (TREB’s) GTA REALTORS® Release for April 2019 brings good news to home sellers who have waited on the sidelines for the right time to sell their home. The report shows that GTA home sales in April 2019 saw a substantial increase in a year-over-year basis. The number of residential sales jumped 16.8% from 7,744 transactions in April 2018 to 9,042 transactions last month.
GTA home sales look promising
Compared to March 2019, April’s GTA home sales saw a significant increase of 11.3%. That’s not just net sales, but on a seasonally adjusted basis.
Though new listings were also up on a year-over-year basis by 8%, that growth is much lower than reported for sales. This opens up the possibility that market conditions are heating up again. It wouldn’t be surprising if we start to see another acceleration in price growth in the near future.
“The strong year-over-year growth in sales is obviously a good news story and likely represents some catch up from a slow start to the year,” said TREB’s president Garry Bhaura. “TREB’s sales outlook for 2019 anticipates an increase relative to 2018. It should be noted, however, that growth in new listings is not keeping pace with sales.”
Strongest growth in over a year
The MLS® HPI Composite benchmark also increased by 3.2% in April. This ranks it the highest percentage of growth in over a year in the region. The average selling price for homes increased by 1.9% reaching $820,148. On a seasonally adjusted basis, the average selling price went up by 1.1% compared to March 2019.
Housing price growth continues to be primarily driven by condo sales and higher density low-rise housing. We often see detached homes trending upwards. But their average price took a dip on a year-over-year basis in the Greater Toronto Area.
The reason why the detached market took a hit is well understood and documented: the OFSI stress test. “Many potential home buyers arguably remain on the sidelines as they reassess their options in light of the OSFI-mandated two percentage point stress test on mortgages,” says Jason Mercer, TREB’s Chief Market Analyst. Longer term borrowing costs have trended lower this year and the outlook for short-term rates, for which the Bank of Canada holds the lever, is flat to down this year. Unfortunately, against this backdrop, we have seen no movement toward flexibility in the OSFI stress test.”