Canada's Condominium Magazine
A Sales-to-New-Listing Ratio of 50% is not good news for pricing in the Greater Toronto market — unless you’re a seller. The Toronto Real Estate Board’s (TREB) latest in-depth review of the overall market action in July shows this all-important Sales-to-New Listings Ratio increased to 50% from 42%. Last July, Condo.ca and other experts cautioned the 42% ratio is challenging. Unless new listings flow into the market this autumn — which historically, is possible — prices are likely to increase again.
TREB’s President, Gary Bhaura, put the numbers in the context of the economic benefits:
“Home sales result in substantial spin-off benefits to the economy, so positive results over the last two months are encouraging. However, no one will argue that housing supply remains an issue… government need[s] to concentrate on policies focused on enhancing the supply of housing…”
Sales-to-New Listing Ratio pressures pricing
As we head into the traditionally busy fall season, buyers shouldn’t expect prices to ease, although in normal markets autumn does bring more listings into the market.
Despite this pressure, July was all about a summer surge in the market. July sales were up more than 18% — as previously reported in Condo.ca, here — to 6,961 transactions, at a higher average price of $782,129. In other words, year-over-year, the average selling price was up 4.8%; seasonally adjusted it was up 3.1% month-over-month.
Snapshot of the Market
Most of the market indicators are up — sales, interest, selling prices. The only down-side is the listings supply:
- July 2018: UP 18.6% as compared to July 2017
- July 2018 seasonally adjusted: UP 6.6% month-over-month to June 2018
- Total new listings in July 2018: 13,768, down from 14,122 in the same period last year
- Sales-to-New-Listings Ratio 50%, UP in July 2018 (higher is worse for price pressure) from 42% last July
- Average selling price UP 4.8% in July 2018, year-over-year
- Average selling price $782,129 versus $745,971 last year
- Average selling price UP 3.1% in July 2018 on a Seasonally Adjusted month-over-month basis: $808,686 versus $783,240.
Good news: Housing Price Index
On the good news side for buyers, there was a slight dip in the Home Price Index (HPI) for the month year-over-year. The TREB MLS Housing Price Index is somewhat more of an “apples-to-apples comparison” on an annual basis because it benchmarks houses of the same characteristics. Average home pricing isn’t always the best measure.
Jason Mercer, Director of Market Analysis for TREB, explains:
“We have certainly experienced an increase in demand for ownership housing so far this summer. It appears some people who initially moved to the sidelines due to the psychological impact of the Ontario Fair Housing Plan and changes to mortgage lending guidelines have re-entered the housing market. Home buyers in the GTA recognize that ownership housing is a quality long-term investment.”