The Toronto housing market set another record for October as the average home price reached nearly $1.2 million. This is the 8th consecutive rise in home prices since it first topped the $1 million mark in February this year. What factors continue to drive these prices up?
Short supply of new listings
The shortage of supply in the housing market remains the culprit behind the upward trend in home prices. This month, there was a 34.1% decrease in new listings. Despite that, the market still had an increase in sales compared to the previous month. According to Jason Mercer, the real estate board's chief market analyst, this month's home sales were the second-highest in October. Although detached homes and townhouses saw a decline, the condo market continues to tighten up toward the end of the year.
Condo sales soared
The condo market saw an increase of 10.6% in sales, making it the most active in the GTA housing market. Condos also increased in prices by 8.9% in October, and like detached homes, had a massive drop in new listings by 30.9%. If this trend continues, we can expect a tighter market and competition among buyers.
Let us take a look at the numbers presented by TRREB in their latest October 2021 statistical update for GTA.
Source: TRREB November 2, 2021
Year-over-year Total Residential Transactions
October 2020 -10,503
October 2021 - 9,783
There was a decrease of 6.9% in sales compared to last year. The same downward trend was recorded in However for October 2021 sales result over September 2021, sales increased by 9.9%.
September 2021 - 8,840
October 2021- 9,716
There was an increase of 9.9% in sales compared to the previous month.
The number of home sales in October 2021 decreased by 6.9% on a year-over-year basis but increased by 9.9% from last month.
The average selling price of homes continues its upward trend.
October 2020 - $ 968,535
October 2021 - $ 1,155,345
There was a 19.3% increase in selling price compared to last year.
For the average selling price compared to the previous month, there was an increase of 1.5% for the home prices.
September 2021 - $ 1,124,716
October 2021 - $ 1,141,524
There was an increase of 1.5% in selling price compared to the previous month.
Total New Listings added to the Market
October 2020 - 17,806
October 2021 - 11,740
There was a decrease of 34.1% in new listings on a year-over-year basis.
The 2021 % Sales-to-New Listings Ratio of 83% increased by 24% compared to 59% in October last year.
Condominium Sales Statistics
Year-over-year Total Condo Apartment Sales
Q3/20 - 7,060
There was an increase of 10.6% in condo sales compared to the previous year. There was also an increase in the average selling price for condos.
Q3/20 - $ 633,596
Q3/21- $ 689,831
There was an increase of 8.9% in average selling price compared to the previous year.
Here is the summary of the listings of condominiums
Year-over-year Total New Listings
There was a huge increase of 30.9% in new listings compared to the previous year.
From August 9 to November 6, there are a total of 716 sales in townhouses, having the same figure compared to last year. There are 557 new listings, down by 31% from last year. For the average selling price, a 1 Bd Townhouse can cost $ 664,000 which is 11% higher compared to the same month of last year. While a 2 Bd Townhouse costs $968,000 which is also an increase of 18% compared to the previous year.
Toronto's housing market is far from cooling down. Home prices continue to surge as supplies remain limited. Many are turning to condos as an affordable option, but will likely not remain so as the market tightens due to a big drop in new listings. Another factor that might make the market even tighter is when buyers try to enter the market before major banks implement the plan to increase the interest rate for mortgages. Buyers will likely only find relief when supply starts to even out the demand in the market.
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