You Can't Keep A Good Market Down!
MARKET COMMENTARY: JUNE 2020
The Toronto Regional Real Estate Board (TRREB) has released the sales figures for the month of June and the numbers are remarkable. After only 3 1/2 months of living under the spectre of Covid-19, levels of real estate activity continue to show strong upward trends and have reached a point to where they compare favourably to the same period last year.
Beginning with total sales, Toronto area Realtors reported 8,701 transactions through TRREB’s MLS in the month of June. While this represents a substantial increase of 89% over the previous month, it is only 1.9% off the total sales reported in June 2019. Year-over-year growth was reported in some areas and market segments, most notably in detached (+5.6%) and townhomes (+6.5%), both of which saw the 905 outperform the 416. In the coming months, it will be interesting to see if this increased demand for suburban real estate is related to the desire for sanctuary outside the more densely populated city, or an increased acceptance for working from home and the impact of commuting.
The condo market in both the 416 and 905 was the worst performer, with year-over-year sales down 16.3% for June. Rising prices in the sector will have played a role, however, due to Covid-19, showings are more challenging in high-rise communities than in ground level housing, and many amenity spaces remain closed.
As reported previously, despite the economic uncertainty, housing prices across the GTA continue to hold. At $930,869, the average sales price was up 11.9% from the same period last year and 7.8% from May. The MLS Home Price Index (HPI) Composite Benchmark, which is a more accurate indicator of inflation in the market, was up 8.2% year-over-year in June.
Looking more closely at pricing by category, average prices were up across the board.
Semi-detached ($929,138) showed the biggest gains at 11.9%, followed by single detached ($1,127,419) at 10.8% and townhomes ($729,045) at 9.8%. Condos ($631,704) were up 7% year-over-year. Average prices for singles and semis in the 416 were up 14.3% and 22% respectively. Average price growth exceeding the HPI composite benchmarks suggests that we are seeing a resurgence in the luxury housing markets.
Despite the strength in housing prices, we are not seeing growth in new listings, as many homeowners have chosen to stay put during the pandemic. At 16,153, total new listings were only up 2.1%, year-over-year. Active listings are down 28.8% from last June, and housing inventory is now sitting at just 1.6 months, indicating very strong seller’s market conditions. Growth in new listings will need to outstrip growth in sales for a number of months before we see a return to a more balanced market.