The Toronto Real Estate Board reported the third-best sales result on record for the month of August. While the market has taken its regular summer breather, it is clear that the demand for ownership housing remains strong. At the same time, the supply of listings is down. The result has been tighter market conditions and sustained competition between buyers, resulting in double-digit annual increases in selling prices.
8,596 sales were reported in August 2021 – down by 19.9% compared to the August 2020 record of 10,738. The condominium apartment market segment bucked the overall sales trend, with year-over-year growth in sales, continuing a marked resurgence in 2021. The number of new listings entered into the System was down year-over-year by 43%.
The fact that new listings were at the lowest level for the past decade is alarming. It is clear that the supply of homes is not keeping pace with demand, and this situation will become worse once immigration into Canada resumes. The federal parties vying for office in the upcoming federal election have all made housing supply and affordability a focal point. Working with provincial and municipal levels of government on solving supply-related issues is much more important to affordability than interfering with consumer choice during the home buying and selling offer process or revisiting demand-side policies that will at best have a short-term impact on market conditions.
The August 2021 MLS® Home Price Index Composite benchmark was up by 17.4% year-over-year. The average selling price for all homes combined was up by 12.6% year-over-year to $1,070,911. The strongest annual rates of price growth are still being experienced for low-rise home types. However, average condominium apartment price growth is now well-above inflation as well. On a seasonally adjusted basis, the average selling price continued to trend upward in August.
Sales have accounted for a much higher share of new listings this year compared to last, and the story was no different in August. There has been no relief on the supply side for home buyers, in fact, competition between these buyers have increased. As we move toward 2022, expect market conditions to become tighter as population growth in the GTA starts to trend back to pre-COVID levels.
“Toronto’s Luxury Real Estate Authority”