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The Toronto Real Estate Board reports that prices for condo units continue to outpace detached houses and driving price growth for the entire market.
Condo apartment prices posted a 4.9 per cent gain this May from last May to $590,876, while detached houses for sale in Toronto increased just 1.1 per cent to $1,042,218. Overall, the MLS benchmark price was up by 3.1 per cent and the average selling price for all properties combined across the Greater Toronto Area was up by a similar 3.6 per cent to $838,540. “Price growth was driven by the condominium apartment and townhouse market segments,” reads the report.
The same is true in cities neighbouring TREB’s region. In Hamilton, single-family homes rose just .05 per cent this May year over year, while Hamilton condos rose 8.3 per cent year over year. It’s likely that single-family homes have simply become too expensive for most buyers, and the stress-test has reduced their ability to borrow enough to cover the costs. Nevertheless, TREB expects prices for all properties to rise since inventory is scarce and sales are starting to pick up.
New listings barely budged this May, rising just .8 per cent to 19,386 properties. Meanwhile, sales jumped 19 per cent to 9,989 transactions. This indicates that demand is outstripping supply, which inevitably leads to higher prices. “If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate. This potential outcome underpins calls from TREB and other housing industry stakeholders to address roadblocks preventing a more sustainable and diverse supply of housing reaching the market,” says Jason Mercer, TREB’s Chief Market Analyst. “Many households are not comfortable listing their homes for sale because they feel that there are no housing options available to better meet their needs.”
Houses for sale in Toronto tend to be either large single-family homes, or small condos. Although semi-detached houses and townhouses do exist, they’re in short supply. Semi-detached homes make up 9.5 per cent of transactions this year to-date, while townhouses make up just 17 per cent. Meanwhile, detached houses make up 45 per cent of the market and condo apartments 27.5 per cent. Toronto is missing “middle” options such as duplexes and stacked homes. Changing this, however, requires a change in policy.
For now, prices in Toronto are likely to climb, albeit at a slower pace than years past.
Check out the infographic below for all the facts on this month’s housing market: