GTA resale home growth hits record in August

A strong rebound in the Greater Toronto Area resale market continued in August, with sales jumping a record 40.3 per cent compared to August 2019.

Most notably, sales were up on a year-over-year basis for all major home types, in both Toronto and surrounding GTA regions. Notably, lowrise market segments, including detached and semi-detached houses and townhouses, were the drivers of this growth.

Increasing competition

The number of new listings during the month and active listings at the end of August 2020 both were up on a year-over-year basis. GTA realtors reported 18,491 new listings, up by 56.8 per cent. Although new listings were up strongly for all home types, growth in new condominium unit listings far outstripped growth in the other market segments.

In terms of selling prices, competition between buyers increased in many segments in the GTA, fueling further acceleration in year-over-year price growth. The overall average selling price in August was $951,404, up by 20.1 per cent compared to last year.

Pent-up demand

Before the onset of COVID-19, there was a great deal of demand in the market. With the slowdown in activity over the spring at the height of the pandemic, pent-up demand increased in the summer months.

Increased demand is based on improving economic conditions, including monthly GDP growth and job creation, and the continuation of very low borrowing costs. In addition, fewer households have chosen to go on vacation as a result of COVID-19 and instead have remained in the GTA and been active in the housing market.

Overall, market conditions remained tight in August. Competition between buyers was especially strong for lowrise home types, leading to robust price growth. However, with growth in condominium listings well-outstripping sales growth, condo market conditions were comparatively more balanced, reflected in a slower pace of price growth.

Focus on supply

With demand for ownership housing continuing to recover, it will be important for policy makers to remain focused on the longer-term goal of bringing more housing supply online, especially as we return to a normal cycle of immigration.

We have to focus on supply, both in the aggregate and in terms of a greater diversity of home types. Or in other words, all levels of government should commit to expediting the creation of “missing middle” housing. This will be key in addressing housing affordability in the GTA moving forward and keeping the region competitive in attracting businesses and talent from around the world.