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Market Watch – June 2012 Spring Sales at a High for the Year

The residential housing market is strong in most areas across the country. New listings were also up substantially on a year-over-year basis in May.

Strong competition between buyers seeking to purchase low-rise home types drove strong price growth in May. However, if new listings continue to grow at the pace they did in May for the remainder of 2012, the annual rate of price growth should begin to moderate on a sustained basis. We expect to see the same kind of results while interest rates remain low.

Ontario – Strong sales and price growth in May

Toronto, June 5, 2012 - Greater Toronto REALTORS® reported 10,850 transactions through the Toronto Multiple Listing Service® (MLS®) system in May 2012 – an 11% increase over the 9,766 sales in May 2011. Sales growth was strongest in the ‘905’ regions surrounding the City of Toronto.

“Sales growth in the ‘905’ area code was stronger than growth in the City of Toronto across all major home types. While lower average prices are certainly one factor that has contributed to this trend, recent polling also suggests that the City of Toronto’s land transfer tax has also prompted many households to look outside of the City for their ownership housing needs,” said Toronto Real Estate Board (TREB) President Richard Silver.

New listings were up substantially on a year-over-year basis in May – rising by more than 20% to 19,177.

The average price for May 2012 sales was $516,787, representing an annual increase of 6.5% compared to $485,362 in May 2011. Price growth continued to be driven by the low-rise market segment.

“Strong competition between buyers seeking to purchase low-rise home types drove strong price growth in May. However, if new listings continue to grow at the pace they did in May for the remainder of 2012, the annual rate of price growth should begin to moderate on a sustained basis,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

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