DECEMBER 2016 TREB MID-MONTH STATISTICS

December 20, 2016 – Greater Toronto Area REALTORS® reported 3,196 home sales through TREB’s
MLS® System during the first 14 days of December 2016. This result represented an increase of almost
18 per cent compared to the first two weeks of December 2015, when 2,713 home sales were reported.

Broken down by market segment, the strongest annual growth in sales was experienced for condominium
apartments – both for the City of Toronto and the surrounding regions. Double digit growth in detached
home sales was also reported, but this was driven solely by sales outside of Toronto. Within the City of
Toronto, sales were down for all low-rise home types – likely due to a lack of listings rather than a lack of
demand.

New listings reported by REALTORS® were down by 4.7 per cent year-over-year to 3,061. With sales up
strongly and listings down, market conditions were tighter compared to a year earlier. Strong competition
between home buyers continued to result in double-digit price increases.

The average selling price for all home types combined was $741,515 during the first two weeks of
December, representing a 19.3 per cent increase compared to a year earlier. Average annual rates of
price growth generally remained strongest for low-rise home types, but the pace of condominium
apartment price growth continued to accelerate.

And one year ago, TREB’s outlook for 2016 was:

Greater Toronto Area (GTA) households continue to
see home ownership as
an affordable, quality, long-term
investment as evidenced by the
record home sales reported through
TREB’s MLS® System in 2015.
Both low-rise and condominium
apartment prices increased on a
year-over-year basis, as measured
by the MLS® Home Price Index and
the average selling price. Seller’s
market conditions resulted in high
single-digit or low double-digit
annual rates of price growth for
low-rise homes throughout 2015.
The better supplied condominium
apartment market experienced
more moderate single-digit annual
price increases, but price growth in
this market segment still outpaced
inflation. A healthy regional
economy along with historically low
borrowing costs spurred demand
for ownership housing in 2015. The
majority of recent home buyers
took advantage of competitive
lending market conditions to receive
substantial discounts off posted
rates. A very small percentage
of recent home buyers put down
between 5 and 9.9 per cent toward
the purchase of their new home.
Finally, the economy benefited
from the rise in transactions, which
stimulated an additional $5.5 billion
in spending.
2016: HOME SALES WILL REMAIN
STRONG
Home ownership demand will remain
strong in 2016, with TREB MLS®
home sales amounting to between
96,500 and 105,000, depending
on the direction of borrowing costs
and the availability of listings. A
relatively strong GTA economy
will keep the unemployment rate
low and result in moderate income
growth. Even if borrowing costs
increase alongside stricter lending
guidelines, pent-up demand carried
over from 2015, especially for lowrise
home types, will ensure that
many willing buyers remain in the
marketplace. We will continue to
experience seller’s market conditions
in 2016, but despite the tight market,
price growth will be mitigated to a
certain degree by the lending preapproval
process and federal lending
guidelines. The average selling price
will range between $655,000 and
$665,000.
IMPROVED INFRASTRUCTURE THE
KEY TO GGH LIVEABILITY AND
COMPETITIVENESS
The Greater Golden Horseshoe
(GGH), which includes the GTA, is
internationally recognized as a great
place to live, work and play, and
many see purchasing real estate in
the GGH region as a wise long-term
investment. While the region and
the municipalities that comprise it
are seen as an attractive place to
reside, the stakeholders consulted
for this report noted that work
must be done to ensure the GGH
remains a competitive global region.
Improvements to our transportation
system and public infrastructure, as well as increasing the affordability
and availability of housing options,
will optimize the GGH’s long-term
potential and increase the region’s
liveability. In order to ensure that
necessary improvements proceed in
the most efficient, cost-effective and
successful manner possible, it will
be vital for all levels of government
and all stakeholders involved in
the process to coordinate their
approach.
NEW HOME CONSTRUCTION
DOMINATED BY HIGH-RISE
DEVELOPMENTS
The number of new homes sold in
2015 remained within the long term
normal range for the past decade
and in line with net population
growth. However, a marked decadelong
shift in the types of homes being
built continued, with the majority of
new home sales accounted for by
high-rise developments last year.
In contrast, ten years ago, lowrise
home types accounted for the
majority of new homes sold. In 2005,
the provincial government introduced
policies (the Greenbelt Act and the
Places to Grow Act) intended to
protect significant agricultural land
and green space while shaping
how and where our region grows.
The building industry responded
by constructing more high-rise
condominium apartments. However,
the demand for new low-rise home
types has remained very strong,
which has pushed new home prices
to new heights. A recent survey
conducted by Ipsos for the Building
Industry and Land Development
Association (BILD) found that 39 per
cent of residents in the GTA are very
concerned about home ownership
affordability.

 

Written and published by TREBhome.com

 

 

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