Following three straight record months of April, May and June in which GTA home sales hit fresh new record for each, July’s home sales once again were the best on record for the month of July. Average home price marked a 7th consecutive month of double digit increase year-over-year, although on a month-to-month basis, the price had declined modestly in July from the peak levels of May and June as the housing market eased into the traditionally slower summer months. Shortage of homes available for sale on market continued to present challenges to home buyers. Overall, GTA’s housing market remained firmly in an extreme seller’s market in July.
Home Sales Set New July Record
According to the Toronto Real Estate Board, there were 9,989 homes sold in July 2016, up 1.8% from July 2015. At just shy of 10,000 transactions, July’s sales surpassed the record sales of 9,880 homes in July 2015, setting a new record for the month of July.
The increase in GTA home sales was primarily driven by sales of condo apartments, which soared 10.3% in July to 2,665 condos from 2,429 in July 2015.
Sales of townhomes increased slightly while sales of semi and detached homes were lower than last July due to shortage of homes on market, resulting in a total 1.5% decline in sales of low-rise homes compared to a year ago.
Shortage of Homes For Sale
While home sales in GTA have been rising at record pace in 2016, new listings have actually been falling.
In July, new listings in GTA were 13,542, down 7.4% from 14,625 in July 2015. This is the 6th year-over-year decline in the last 7 months.
New listings were lower than July 2015 for all home types except townhouses, with condos seeing the largest decline at 15.9%.
On a year-to-date basis, total new listings were down 5.4% as of July 31 compared to 2015, while sales were up 8.9%. As a result, active listings of homes available for sale in GTA plunged to 11,346 at the end of July from 16,673 one year ago, a 31.9% decline.
7th Consecutive Month of Double Digit Price Increase
Severe shortage of homes available for sale combined with unabated strong demand from home buyers has kept the prices of homes in GTA up at record levels in July for all property types and across all GTA regions.
Average selling price for all home types combined was $709,825 in July 2016, up 16.6% from July 2015 and a 7th consecutive double digit increase year-over-year. On a month-to-month basis, July’s average home price followed the seasonal trend and was 4.9% lower than June and 5.6% lower than May.
Detached homes continued leading the way with a 21.1% year-over-year price increase, followed by semi at 17.1%, townhomes at 13.9% and condo at 9.2%.
Extreme Seller’s Market Continued
Other housing market indicators continued to show an extreme seller’s market, albeit there were signs of relief as the housing market eased into the traditionally slower summer months.
The Sales-To-New Listings Ratio, an indicator that generally indicates whether a housing market is a buyer’s market, balanced market, or seller’s market, was at 69.1 in July, indicating an extreme seller’s market in GTA. The ratio had ranged between 0.52 and 0.65 for the month of July from 2010 to 2015.
Looking into the details, seller’s market continued for all home types and across all GTA regions in July.
The Sold Price To List Price Ratio, another indicator to gauge the housing market strength, was 103% in July 2016, meaning on average, homes in GTA were sold for 103% of asking price, or 3% over asking price. Although the indicator has come down slightly in July from the peak of 104% in May and June, it was still way higher than those observed from 2010 to 2015, indicating fierce competition among home buyers remained the theme in the GTA housing market.
Similarly, the Days On Market indicator also pointed to a substantially heated housing market in GTA. Homes, on average, were sold in 16 days in July 2016, compared to the average of about 22-34 days for the month of July from 2010 to 2015.