GTA Housing Market Conditions and its Effect on the Economy
Sunday Feb 23rd, 2020Share
ANNUAL REAL ESTATE MARKET CONDITION
Compared to the fluctuating and volatile Greater Toronto Area (GTA) real estate market conditions in 2017, the GTA real estate market has seen an increased demand for home ownership and rental properties as we go into 2020. There has been a steady yet constrained supply and demand for listings especially in the home ownership sector.
Despite a decline in available supply of listings and bidding wars in 2019 and overall decline in home sales in the past year, we are now strongly positioned for excellent growth in home sales and increased selling prices as far as home ownership and rentals is concerned.
Toronto Regional Real Estate Board (TRREB) President Michael Collins even declared that “Robust regional economic conditions, strong population growth and low borrowing costs will support increased home sales in 2020. Market conditions will become tighter, as transactions will continue to outpace the growth in available listings. The resulting increase in competition between buyers will likely result in an acceleration in price growth across all major market segments.”
JANUARY 2020 TORONTO REAL ESTATE BOARD MARKET STATS
According to TRREB, there has been a total of 4,581 home sales recorded for the month of January 2020 alone. This number is higher by 15.4 per cent as compared to January 2019 stats. Sales are up by 4.8 per cent compared to December 2019.
Compared to 2019 stats, this year has reflected a huge impact. A major difference in the price growth and increase in home sales for January 2020 compared to 2019 was mainly due to the factor of low-rise market segments, especially with detached homes. Buyers who were undecided because of the OSFI stress tests have become more active in the housing market, which in turn has driven really strong year-over-year sales growth in the detached sector. This active participation coupled with the robust sales even while against a constrained supply, has accelerated the rate of price growth.
With an excellent recovery in sales activity compared to 2019, especially during the second half of the year, we are on track for even better sales this 2020. As forecasted, quite a number of home buyers and sellers have gotten back on track in the market place especially when spring season came around. A robust local economy coupled with the declining contract mortgage rates over the remainder of last year has encouraged buyer belief and confidence going into the new year.
2019 TORONTO REGIONAL REAL ESTATE BOARD (TRREB) STATISTICS
Residential sales reported were up by 17.4 per cent year-over-year that amounted to 4,399. Total sales for 2019 on the other hand totalled to 87,825 which is an increase of 12.6 percent compared to 78,015 sales reported in 2018 (lowest in the past decade). On an annual basis, 2019 sales were in accordance with the projected median annual sales totals in the past decade.
Tighter market conditions in comparison to those last year resulted in an even stronger growth for average selling prices in the GTA market. This coupled with stable population growth, lower unemployment rates and reduced borrowing costs continue to establish significant competition amongst buyers in the GTA major market sectors.
GTA REALTORS® STATISTICS
2019 ANNUAL STATS
Sales have seen an 18.8% increase.
0.9% increase in average prices.
SEMI - DETACHED HOMES
Sales at an 12.6% increase.
4.3% increase in average prices.
Sales saw a 15.4% increase.
Average prices increased by 3.4%.
DECEMBER 2019 STATS
These are the key DECEMBER 2019 stats to be aware of:
Sales have seen a 26.2% increase.
11.6% increase in average prices.
SEMI - DETACHED HOMES
Sales at an 12.1% increase.
6.5% increase in average prices.
Sales saw a 19.2% increase.
Average prices increased by 7.8%.
Excellent demand indicators should drive home sales to reach the 90,000 mark in 2020, with a prominent forecast of 97,000 – up by a high 10.5 per cent in comparison to the 87,825 sales reported in 2019. Total sales growth is projected to be driven by the higher density low-rise market segments such as semi-detached houses and townhouses. These home types are on average more cost-effective and should remain a favorable choice. The OSFI mortgage stress test, though under scrutiny by the federal government, still appears to be kept in place for the near foreseeable future.
Sellers in the GTA market are headed for a positive year this 2020. With increased prices and demand, this will be a fruitful year for any property investments, may it be for rentals or home ownerships.
However, you should still plan, schedule and act on how you can best acquire gains for your properties and investments. Make sure to take advantage of local sales data to increase pricing on sales and rentals. Key research on market conditions and competition is a must.
With strong growth comes increased demand and significant pricing changes for the housing market sales and rentals. However, this doesn't mean that there are no deals to be found. As with the increase in sales comes a favorable opportunity with mortgage rates and pricing arrangements.
Make sure to talk to a knowledgeable mortgage broker who can assist you in securing the best mortgage pre-approval when deciding on your new home. Alternatively, you can still seek lenders who may provide even better pricing and interest options for your dream home.
However, for the greatest chance in securing the best deal for your home or your investment, reach out to so WE can HELP YOU out...
Let us know any of your questions and let us guide you for the best result of your investment.
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