In a new analysis, Toronto Real Estate Board president Garry Bhaura said that a kind of gold rush for the city’s highly valued residential assets is setting the stage for a potential supply problem.
This is not helped by the growing number of individuals and families establishing new roots in the GTA region, along with a steady inward flow of immigrants and skilled workers.
According to figures from Statistics Canada, Toronto’s population had an annual growth rate of 0.86% from 2011 to 2016, increasing by a total of 4.3% over that time frame.
“As the GTA population continues to grow, the real challenge in the housing market will be supply rather than demand,” Bhaura said, as quoted by The Canadian Press.
TREB’s latest numbers indicated that the market’s new for-sale listings shrunk by 3.1% year-over-year in September, down to 15,920. Meanwhile, sales activity ticked up slightly by 1.9% during the same period, up to 6,455 transactions.
However, BMO senior economist Sal Guatieri wrote to investors that contrary to these grim indications, the GTA housing segment “continues to stabilize.”
“The market should remain on a steady footing in coming months as healthy demographic demand tempers the downward pull from rising interest rates.”
This is despite a considerable decline in sales activity earlier this year due to stress tests mandated by tighter federal mortgage rules.
Average selling price for Toronto’s homes grew by 2.9%, up to $796,786.
“With sales up year-over-year and new listings down, market conditions became tighter. Many buyers may have found it more difficult to find a home meeting their needs,” the TREB noted in its data release.
Written by Ephraim Vecina