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Home sales, new listings, and prices for Greater Toronto Area homes all declined in May, with the latest report from the Toronto Real Estate Board (TREB) pointing to a turbulent market. When measured on a year-over-year basis, May 2018’s figures underscore a continued lack of housing supply, with a 26.2% drop in new listings corresponding with a 22.2% decline in sales over May 2017’s numbers. Figures are slightly less troubling when measured month-over-month, with seasonally adjusted May sales remaining flat compared to April. Similarly, this year-over-year drop in sales marks a stabilization of the over 30% annual declines witnessed in February, March, and April.
It appears that the ongoing lack of supply may remain an issue in the future, with a recent poll conducted by Ipsos for TREB suggesting that the number of homeowners with the intention to list has declined since fall 2017. A statement from TREB President Tim Syrianos points towards difficulty for buyers looking for a home that meets their needs. "In a recent Canadian Centre for Economic Analysis study undertaken for the Toronto Real Estate Board, it was found that many people are over-housed in Ontario, with over five million extra bedrooms," said Syrianos. "These people don't list their homes for sale, because they feel there are no alternative housing types for them to move into. Policymakers need to focus more on the 'missing middle' – home types that bridge the gap between detached houses and condominium apartments."
A 6.6% year-over-year decline in the average selling price for all home types brought that figure down to $805,320, while the MLS® Home Price Index Composite Benchmark dropped by 5.4% in the same period. While lower than May 2017's average price, the seasonally adjusted May 2018 average price grew by just over 1% when compared with April 2018.
As the year continues, TREB expects tightening market conditions to impact home prices into the second half of 2018 and into the following year, with TREB's Director of Market Analysis Jason Mercer stating that "there are emerging indicators pointing toward increased competition between buyers, which generally leads to stronger price growth. In the City of Toronto, for example, average selling prices were at or above average listing prices for all major home types in May."
With the provincial election just around the corner, TREB is releasing the results of a poll conducted by Ipsos Public Affairs highlighting housing issues important to voters. 1,200 GTA residents (500 in 416 and 700 in 905) were polled in late May, and asked to rank the most important of 9 listed issues (health care, government spending/balancing budget, taxes, housing affordability, energy costs, economy, transportation/traffic, environment/climate change, enhancing social programs) in the province. 25% of respondents ranked housing affordability in their top two most important issues, while 69% agree that a party's housing affordability platform will influence who they vote for on June 7th. Over half of respondents said that they believe that government policies should focus on increasing housing supply and reducing housing demand.
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