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New figures from the Toronto Real Estate Board (TREB) are highlighting a dichotomy in Toronto's real estate market, with continued strength in the housing market contrasted by a slowdown in the commercial market. A total of 12,077 residential sales were recorded through TREB’s MLS System in March 2017, marking a 17.7% year-over-year increase when measured against the 10,260 sales reported in March 2016. New listings also grew over last year, with 17,051 new listings representing a 15.2% spike.
Toronto Real Estate Board President Larry Cerqua said in a prepared statement “It has been encouraging to see that policymakers have not implemented any knee-jerk policies regarding the GTA housing market. Different levels of government are holding consultations with market stakeholders and TREB has participated and will continue to participate in these discussions. Policy makers must remember that it is the interplay between the demand for and supply of listings that influences price growth,” continued Mr. Cerqua.
Despite this, the rate of sales continues to exceed the rate of new listings, which is being listed as a factor in the region's tightening housing market. These tightened market conditions spur competition between buyers, which is leading to higher prices across all submarkets. The MLS Home Price Index Composite Benchmark Price increased by 28.6% year-over-year, while the average selling price rose by 33.2%.
Meanwhile, the GTA's commercial market witnessed 5,538,743 ft² of combined industrial, commercial/retail and office space leased through TREB’s MLS System in 2017's first quarter, representing a steep decline from the 6,421,452 combined square feet of leased space reported in the first quarter of 2016. The industrial submarket swept up the bulk of this space, with the 3.9 million ft² leased to industrial tenants making up 70% of total commercial space leased in Q1 2017. 942,000 ft² of office uses and 717,000 ft² of commercial/retail uses make up the remainder of leased space during this quarter. In total, the combined number of commercial/retail and office sales fell off significantly this year, with 234 sales recorded in Q1 2017 versus the 326 recorded during Q1 2016.
Mr. Cerqua's statement continued, saying “The first quarter of the year is generally a slower period for leasing activity and as such the mix of properties is not as diverse. As a result, it is possible to see some volatility in lease rates due to the changing composition of transactions from one year to the next. Looking forward, the outlook for the GTA economy is quite positive, which should see demand for commercial real estate remain strong in 2017."
