The Toronto housing market showed some improvement in home sales this June along with the average selling price.
8,082 homes were sold by Toronto Real Estate Board (TREB) members through the MLS in June; a 17.6% jump from May 2018 and 2.4% more than in June of last year.
Policy changes such as the B-20 mortgage guidelines which tightened lending conditions for borrowers created a volatile market.
“Any time the government imposes new rules or policy, the public pulls back to see how things will unfold. Buyers tend to put their purchases on hold until they become confident the market has adjusted to any correction caused by the policy/rule changes. We are now seeing buyer demand increase as the market has now adjusted to the new stress test policy change. With increased buyer demand, we can start to see a more balanced market and property values increase from what they were near the beginning of the year.” — Sean Kavanagh
“Home ownership has proven to be a positive long-term investment. After some adjustment to the Fair Housing Plan, the new Office of The Superintendent of Financial Institutions (OSFI) stress test requirement and generally higher borrowing costs, home buyers are starting to move back into the market, with sales trending up from last year’s lows. Market conditions appear to be tightening, with sales accounting for a greater share of listings, as new listings have dropped compared to last year,” said new TREB president Garry Bhaura.
The average selling price rose by 2% year-over-year to $807,871 which means a 3.4% rise month-over-month following the preliminary seasonal adjustment.
A larger share of low-rise homes sold in June 2018. TREB says that the difference between HPI and average selling price is likely to be due, in part, to a different variety of homes sold on a year-over-year basis. The HPI was down 4.8% year-over-year and flat month-over-month.
“The expectation is to see improvement in sales over the next year. Over the same period, however, it is likely that issues surrounding the supply of listings will persist. This suggests that competition between buyers could increase, exerting increased upward pressure on home prices. With a new provincial government in place and municipal elections on the horizon, housing supply should be top-of-mind for policy makers,” said Jason Mercer, TREB’s Director of Market Analysis and Service Channels.