Toronto & GTA Real Estate Statistics for May, 2016

Toronto, June 3, 2016 - The Real Estate Board today released home sales statistics for the month of May, 2016 reflecting, once again, "strong sales growth". Chart - Toronto & GTA Home Sales & Average Price by Major Home Type 2016-05

Generally, the only minus signs in the report were for the total active listings, down 30.4% compared to the year earlier period, and the average "Days on Market" [DOM] at 15 days compared to 18 days last May - or "16.7% faster".

The only other "minus sign" in the report was for the number of Semi-detached homes sold in Metropolitan Toronto in May, down 13.8% to 406 units. Given the strength of the other numbers in the report though, there's little doubt that this decline was simply a matter of tight inventory.

Chart - Toronto & GTA Home Sales Year-Over-Year Summary @ 2016-05.png Sales of Detached homes in "The 416" - Metro Toronto - rose 8.9% to 1,565 units at an average selling price of $1,285,693, up 15.2%. In the balance of the GTA, 4,935 detached homes sold, up 12.8% year-over-year, at an average sale price of $891,870, up 21.2%.

Condo Apartment sales in Metro Toronto and "The 905" were also very strong rising 21.7% to 2,137 units in the former and rising 22.5% to 919 units in the latter. The average price of those sales was $442,520 in Metro Toronto, up 5.0%, and $347,431 in the balance of the GTA, up 8.7%.

Overall, including all Toronto Real Estate Board areas and all home types, there were 12,870 homes sold this May, up 10.6% compared to last May's 11,640. The overall average sale price of those homes was $751,908, up 15.7% from last May's $649,648.

This much higher than normal price growth is driven, obviously, by pent up demand and low interest rates combined with historically low inventory levels which can result in a "fear of missing out" kind of psychology: As of the end of May the 12,931 Total Active Listings was, as noted above, a 30.4% drop versus the end of May, 2015. Chart - Toronto & GTA Home Sales Historic Annual Stats to 2016-05.png

"Indicated Forward Inventory" is calculated by dividing that Total Active Listings figure by the month's total sales, or 12,931/12,870 which works out to just one month's forward supply [1.005 months, actually] - extremely tight inventory by historical standards.

In fact, I was recently listening to a podcast wherein a Realtor from a major US centre [I forget exactly which city] was being interviewed. He was also lamenting the difficulties inherent in an undersupplied market... except that the "Forward Inventory" for his market area is sitting at 3.2 months - just to give you an idea of how tight the home market is here in Toronto - and the entire GTA - at the moment! In 26+ years in the business I've never seen a "seller's market" like this. The only "comparable extreme" I can relate would be a kind of "polar opposite" to this one when mortgage rates hit 21.75% in September of 1981. Tell that one to the kids...

As the Toronto Real Estate Board's Director of Market Analysis, Jason Mercer, puts it, "Widespread competition between buyers of singles, semis and townhouses across the GTA has underpinned the robust annual rates of price growth experienced so far this year. With this said, however, it is also important to understand that tighter market conditions for condominium apartments have resulted in price growth well above the rate of inflation in this market segment as well.”

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