Ever-tighter conditions will characterize the market for much of this year
Despite Toronto’s home sales activity posting a roughly 3% month-over-month decline in December, prices continued to rise as demand continues outpacing an ever-shrinking inventory.
The December drop was the largest since February 2019, but the average home sales price went up by 0.5% monthly and 7.3% on a year-over-year basis. This was the 10th consecutive month of growth, and the yearly pace was the fastest rate of price growth since 2017, the Toronto Real Estate Board stated.
During the same annual period, the number of active listings in the market fell by 35%. Throughout 2019, the Toronto market racked up 87,825 sales, having grown by 12.6% from the year before.
“Tighter market conditions translated into accelerating price growth,” TREB chief market analyst Jason Mercer said. “Expect further acceleration in 2020 if there is no relief on the supply front.”
The TREB predictions mirrored a late-December analysis by real estate information portal Zoocasa, which stated that Ontario – along with BC – will exhibit some of the best market growth across Canada this year.
Ontario sales are projected to increase anywhere between 4.2% and 7.3% annually, or by 204,200 to 213,800 units. Prices will see a larger increase at 5.4% to 6.5%, at an average of $614,000 – $633,700.
“After sustaining roughly two years of softer sales and price growth following the introduction of the federal mortgage stress test, as well as provincial taxes and policies in Ontario and British Columbia, demand for homes for sale found its footing in the second half of 2019,” Zoocasa stated.
“Canada’s largest urban centres, such as the Greater Toronto Area and Greater Vancouver, as well as its strongest secondary markets, started to experience sustained rebounds in home buyer demand due to a number of factors, including lower interest rates; a subdued Bank of Canada (BoC), combined with strength in the bond market, kept the consumer cost of borrowing at historic lows all year long.”
