The Toronto Real Estate Board released its resale housing market figures for May 2017, announcing that price growth remains strong despite a substantial increase in listings.
In May 2017, there were 10,196 sales reported by Greater Toronto Area (GTA) Realtors through the MLS, which is 20.3% lower than the same period last year. Detached home sales were down by 26.3% while condo sales dropped more than 6%.
Active listings went up 42.9% to 18,477 last month. The major increase in listings was in the low-rise market (detached, semis, townhomes). Despite the overall increase, condo listings actually fell. And even with this jump in listings and drop in sales, there is still less than two months of resale inventory across the GTA.
“Homebuyers definitely benefitted from a better supplied market in May, both in comparison to the same time last year and to the first four months of 2017,” says TREB President Larry Cerqua. “However, even with the robust increase in active listings, inventory levels remain low. At the end of May, we had less than two months of inventory. This is why we continued to see very strong annual rates of price growth, albeit lower than the peak growth rates earlier this year.”
The average selling price in May 2017 hit $863,910, which is a 14.9% increase compared to last year. Due to the lack of new listings in the condo market, the price growth was the greatest in this segment. The average price of a condo unit in the GTA reached $531,659, which is 28.4% higher than May 2016.
“The actual, or normalized, effect of the Ontario Fair Housing Plan remains to be seen,” says Jason Mercer, TREB’s Director of Market Analysis. “In the past, some housing policy changes have initially led to an overreaction on the part of homeowners and buyers, which later balanced out. On the listings front, the increase in active listings suggests that homeowners, after a protracted delay, are starting to react to the strong price growth we’ve experienced over the past year by listing their home for sale to take advantage of these equity gains.”
Price growth may not have been as strong in the low-rise market, but the average selling price of a detached home in the 416 remained above $1.5 million, which is 16.6% higher than last year. Overall, semis averaged $824,667 and townhomes averaged $656,392.
With listings continuing to grow, we’re eager to see how the summer plays out in the GTA resale market. It will also be interesting to see how the increase in listings affects the new home market.