The Toronto Real Estate Board (TREB) released its resale housing figures for January 2017, announcing that last year’s inventory shortage will probably continue through the year, causing prices to surge. Despite this, first-time buyers remain confident.
There were 5,188 sales in the Greater Toronto Area (GTA) reported through the MLS, which is an 11.8% increase compared to the 4,640 sales in January 2016. Condo sales growth outpaced low-rise sales.
There were 2,261 detached home sales and 1,636 condo sales in January. For condo sales, that’s a 26.7% year-over-year increase. Sales growth for all other home types were minimal, except for detached homes in the 905, which increased by nearly 12%.
“Home ownership continues to be a great investment and remains very important to the majority of GTA households,” says TREB President Larry Cerqua. “As we move through 2017, we expect the demand for ownership housing to remain strong, including demand from first-time buyers who, according to a recent Ipsos survey, could account for more than half of transactions this year. However, many of these would-be buyers will have problems finding a home that meets their needs in a market with very little inventory.”
Inventory won’t be the only issue. Prices are already out of hand for first-time buyers, and more buyers will likely be blocked out of the market this year. Last January, the MLS Home Price Index Composite Benchmark went up 21.8%. The average selling price of a home in the GTA increased 22.3% to $770,745.
The average selling price of a detached home in the 416 hit $1,336,640, which is a 26.8% increase! That seems like ridiculous price growth, but it wasn’t even the greatest of the month. Detached homes, semis, and townhomes in the 905 saw greater price growth of 27% to more than 28%. Condo price growth went up by 14.5% on average across the GTA with an average selling price of $442,598.
“The number of active listings on TREB’s MLS® System at the end of January was essentially half of what was reported as available at the same time last year,” says Jason Mercer, TREB’s Director of Market Analysis. “That statistic, on its own, tells us that there is a serious supply problem in the GTA – a problem that will continue to play itself out in 2017. The result will be very strong price growth for all home types again this year.”