Another Month, Another Record!
MARKET COMMENTARY: AUGUST 2020
The Toronto Regional Real Estate Board (TRREB) has released the sales figures for August, and with 10,775 reported sales, a new monthly sales record has been achieved for the second month in a row! This represents a 40.3% increase over August 2019, with sales up for all major home types in both Toronto and surrounding areas.
As reported in July, annual sales growth is being fuelled by the low-rise housing segments. Detached home sales were up 50.6% year-over-year (+65.3% in Toronto), semi-detached were up 66.8% (+81.2% in Toronto), and townhomes were up 45.8% (+43.3% in Toronto). The 905 continues to do exceptionally well with 78.4% of all low-rise sales taking place outside the 416. Expect this trend to continue as buyers prioritize access to outdoor space, and working remotely from home becomes more the norm.
Condo sales for the region were up 10.9%. While this seems low when compared to ground level housing, this figure is not insignificant. As the population becomes more accustomed to living with Covid-19, expect to see a return to this more affordable housing option.
With improving economic conditions and historically low borrowing costs, demand for homeownership continues to rise, putting upward pressure on prices. At $951,404, the average sales price was up 20.1% from the same period last year. The MLS Home Price Index (HPI) Composite Benchmark (a more accurate indicator of market inflation) was up 11.1% compared to August 2019. With average price growth nearly doubling the HPI composite benchmark, it further indicates that we are seeing strong demand for more expensive ground level housing.
Looking at pricing by category, average prices were up across the board. Detached homes ($1,172,880) showed the biggest gains at +19.9%, followed by semi-detached ($905,712) at 18% and townhomes ($742,517) at 16.1%. Condos ($629,643) were up 9.5% year-over-year. Average prices for singles and semis in the 416 were up 21.4% and 21.9% respectively, with the average price for a detached home exceeding $1,500,000.
Both New Listings (+56.8%) and Active Listings (+5%) were up for August. While the number of new listings increased strongly for all housing types, growth in new listings for condominium apartments outpaced all other housing segments. Housing inventory is now sitting at just 1.5 months. By comparison, there are 2.8 months of inventory for the condo sector. These are very strong sellers’ market conditions despite a lack of immigration to the local market. When restrictions are eventually lifted, expect demand to grow further.
As we enter the fall season, a historically strong period in the market, be sure to speak with your Harvey Kalles sales representative for all the latest intel on this rapidly evolving real estate market.