The Greater Toronto Area housing market kicked off 2020 with highly competitive conditions as the supply and demand gap continues to grow. As the market recovers from the OSFI mortgage stress test, more buyers are making their way back into the market which looks to be “driving very strong year-over-year sales growth in the detached segment,” said Jason Mercer, TRREB’s director of market analysis and service channels. However, the supply available is not enough to match the increasing number of buyers.
The latest report from the Toronto Regional Real Estate Board showed a total of 4,581 sales for the first month of the year marking a 15.4% year-over-year increase while the number of new listings came in at 7,836, dropping 17.1% from last year. TRREB President Michael Collins said that “We started 2020 where 2019 left off, with very strong growth in the number of sales up against a continued dip in the number of new and available listings.” He continues to say that “tighter market conditions compared to a year ago resulted in much stronger growth in average selling prices.”
A Growing Low-Rise Market
“A key difference in the price growth story in January 2020 compared to January 2019 was in the low-rise market segments, particularly with regard to detached houses,” said Mercer. As a whole, the GTA recorded 2,074 sales of detached homes in January, making up 45.3% of the total sales that month. Within the 905 area, comprised of the Durham, Peel, York, Simcoe, and Halton markets, detached home sales reached 1,667 of the TRREB total for the month of January, up 23.9% from the same month last year.
In and Around the 905
Durham Region saw 944 new listings and 586 sales for the month of January, giving it a sales-to-new-listings ratio (SNLR) of 58.1%. Homes for sale in Whitby sold for an average price of $694,109, just above the Durham Region average of $655,781 and also totalled an SNLR of 58.1%.
This ratio measures the level of buyer competition in the market – when a ratio is between 40-60% it indicates that the market is balanced, while anything above will establish a sellers’ market, and anything below is recognized as a buyers’ market. Within the Durham Region, the Town of Ajax found itself to be the only town favouring sellers’ conditions with a SNLR of 62.8% while all others remain balanced, for now.
Oshawa real estate continues to be the frontrunner in the Durham region leading the number of home sales and new listings in January at 182 and 269, respectively. With average home prices at $545,615, Oshawa homes fall at about $110,000 less than the average price of homes in the Durham region as a whole making it a rather appealing market.
Trends Within Property Types
As expected, year-over-year changes show an increase in average price across all home types in the GTA. Condominium apartments now average $630,047 in comparison to the January 2019 average of $548,176 giving it the most significant change with a 15% increase. Though prices for detached homes in the GTA rose by 10.5%, marking the second highest percentage change, sales grew by 23.3% again confirming that the detached segment seems to be a popular option.
What Does the Rest of 2020 Have in Store?
If January is any indicator of what the 2020 real estate market holds, the GTA can expect an accelerated increase in average home prices as the growing market demand is not being met with an adequate amount of supply. Mercer says that “without relief on the supply front, the pace of price growth will continue to ramp up” and he is looking to policymakers to establish a lasting solution.
For more information on the GTA real estate trends, check out the infographic below: