The Greater Toronto Area (GTA) saw a substantial year-over-year increase in home sales last month, as well as an increase in average home price, the latter of which could accelerate on the back of supply challenges.
Residential transactions jumped by almost 17% to 9,042 in April compared to 7,744 a year earlier, the Toronto Real Estate Board (TREB) reported on Monday. On a preliminary seasonally adjusted basis, sales were up 11.3% month over month, it said.
Prices also increased, albeit more modestly, with the average home price in April reaching $820,148 compared to $804,926 in April 2018—a 1.9% increase representing the strongest annual rate of growth so far this year, the report said. On a preliminary seasonally adjusted basis, the average selling price was up by 1.1% month over month.
Price growth was driven mostly by the condo and higher-density low-rise segments, while the average price for detached homes dipped 1.3% year over year, the report said, citing mortgage stress testing as part of the reason why.
In fact, over the quarter, a drop in average home sale prices has contributed to improved affordability in most metropolitan areas in Canada, said Desjardins in a report released last week. In Ontario, affordability improved as Toronto and Hamilton experienced the biggest drops in average sale price.
(Desjardins determines affordability based on the ratio between average household disposable income and the income required to obtain a mortgage on an average-priced home.)
Also contributing to improved affordability was an increase in average household after-tax income, the Desjardins report said.
That affordability could reverse in the GTA as the year progresses, however, because supply continues to be a concern. The TREB report said new listings in the GTA were up 8% year over year, much lower than the rate for sales, suggesting market conditions continue to tighten.
To address ongoing concerns about housing supply, last week the Ontario government announced an action plan to reduce red tape for development projects and to make it easier to build a mix of housing types.