Resale home sales in Toronto hit a record high for the second consecutive year in 2016, according to the Toronto Real Estate Board (TREB).
Greater Toronto Area realtors reported 113,133 home sales through TREB’s MLS System – up by 11.8 per cent compared to 2015. The calendar year 2016 result included 5,338 sales in December – an annual increase of 8.6 per cent.
The strongest annual rate of sales growth in 2016 occurred in condominium apartments, followed by detached homes.
“A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the GTA, as the region’s population continued to grow in 2016,” says TREB President Larry Cerqua.
LOW FOREIGN BUYER ACTIVITY
“It is important to point out that the strong demand that we experienced in 2016 was very much domestic in nature,” he adds.
An Ipsos survey recently commissioned by TREB suggests the level of foreign buying activity in the GTA is low, at just 4.9 per cent of GTA transactions. In Toronto, the share of foreign buyers was five per cent.
The annual rate of growth for the MLS Home Price Index (HPI) in the TREB market area accelerated throughout 2016 – from 10.7 per cent in January 2016 to 21 per cent in December 2016. The overall average selling price for calendar year 2016 was $729,922 – up 17.3 per cent compared to 2015. The pace of the annual rate of growth for the average selling price also picked up throughout the year, including a climb of 20 per cent in December.
“Price growth accelerated throughout 2016 as the supply of listings remained very constrained,” says Jason Mercer, TREB’s director of market analysis. “Active listings at the end of December were at their lowest point in a decade-and-a-half. Total new listings for 2016 were down by almost four per cent. In 2016, we saw policy changes and policy debates pointed at the demand side of the market. If we want to see a sustained moderation in the pace of price growth, what we really need is more policy focus on issues impacting the lack of homes available for sale.”
With continued strong rates of price growth, housing affordability is a growing concern, according to TREB. The City of Toronto’s budget committee is considering an increase to the Land Transfer Tax that could see buyers of average-priced homes pay another $750, which would represent a seven-per-cent increase to the $11,000 that they already pay the City as an upfront LTT closing cost. This would be on top of the $12,000 that is also paid to the province. First-time buyers could end up paying $475 more, or, at best, be no better off, even though the province recently doubled their first-time buyer LTT rebate.
“The last thing people need is to dish out another $750, on top of the $11,000 that they already pay City Hall,” says Cerqua. “The City should be looking for ways to make housing affordability better, not worse, especially for first-time buyers who could go backwards, or at best, be no better off. The Budget Committee should stop this proposal in its tracks and instead enhance the rebate for first-time buyers.”
TREB is planning a Market Year in Review and Outlook Report and media event later this month, which will include an expert panel and related submissions on the foundations of the housing supply issue in the GTA and possible solutions.
TORONTO MLS AVERAGE PRICES BY PROPERTY TYPE, 2016
20.8 % Yr/Yr change
16.2% Yr/Yr change
16.8% Yr/Yr change
9.7% Yr/Yr change