There’s been a turnaround in home sales this past fiscal year. New data from the Canadian Real Estate Association (CREA) shows an improved market over the past six months. The shift in sales has been so dramatic, the organization has gone public with altering its sales predictions for the remainder of 2019.
Up ahead is a 5 per cent increase in home sales from the five-year low last year. This year there were 482,000 transactions compared to CREA’s June prediction of a 1.2 per cent gain – or 463,000 in sales. It represents a 17 per cent improvement from the market’s low in February of this year.
CREA raises forecast for Canadian home sales, citing strong fundamentals, lower mortgage rates, a marginal easing of the B-20 mortgage stress test and stronger-than-expected housing activity in recent months. https://t.co/MAX09g0rpG #CREAstats pic.twitter.com/MOudN31wZe
— CREA | ACI (@CREA_ACI) September 16, 2019
These sales include the rising sales in Ontario’s housing market, including Toronto. CREA predicts that prices will go up a slight, yet significant 0.5 per cent in Canada this year – a stark contrast from the June forecast of a 0.6 per cent decline in sales. The Toronto Real Estate Board (TREB) also reported that the number of properties sold in the GTA increased from 6,916 to 8,595.
Sales of Toronto home sales jumped 13 per cent year-over-year in August with an average price listed at $802,400. That’s a 4.9 per cent increase in benchmark price.
Also driving the sales momentum is investment in Toronto condos. Urban Toronto reported that GTA condo construction reached a record high in the first quarter of 2019 and according to Urbanation Inc.’s market results, condo sales are up by 77 per cent from last year. However, many of these condos are purchased outside of the downtown core.
“Sales have been recovering all over Ontario, Toronto included, and they’ve been stronger than we expected,” CREA senior economist Shaun Cathcart told the Toronto Star, noting that lower mortgage rates were partially responsible for the gains. “It was really Toronto and Vancouver that were really driving the upgraded forecast. But it’s also elsewhere in B.C. and elsewhere in Ontario,” he said. “The fundamentals are strong. We had expected recovery and it has been a little bit stronger than we expected.”
Looking at the Toronto market specifically, Royal LePage realtor Desmond Brown told the Toronto Star that properties priced below $1 million were guaranteed to sell quickly and often led to bidding wars. He noted that $1 million listings in neighbourhoods like Leslieville, Riverdale, the Danforth Village and the Beaches usually went for another $100,000 over asking.
“Things from the $1.5 million price range and up, we’re still seeing some multiple offer situations. However, we’re also seeing quite a few properties sitting on the market for over a month,” he said, noting that fall had lower sales in home listed over the $1.5 million threshold.
CREA predicts that growth cross-country will be steady through till 2020 and increase 5 per cent and 7.5 per cent over the next two years, respectively.
This adds credence to the oft-heard Toronto claim that it’s a seller’s market.