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The Toronto Real Estate Board (TREB) has released new quarterly figures, bolstering their narrative that the greatest issue currently facing the housing market is a pressing lack of supply. During Q3 2017, the condominium submarket was the strongest, experiencing the highest average rates of price growth since spring. Q3 also saw a significant year-over-year increase in average selling price, climbing by 22.7% from the Q3 2016 average of $415,894 to $510,206.
This price growth is being attributed to the continued shortage of new housing, evidenced by a 10% decline in new listings, from the 10,967 recorded in in Q3 2016 down to 9,845 in Q3 2017. Similarly, the 5,684 condominium apartment sales reported during the quarter represented a slide from the 7,991 sales reported during the same period last year.
"Competition between buyers remains strong, as listings remain below last year’s very constrained levels," said TREB President Tim Syrianos in a prepared statement issued this morning. "Over the past few months, TREB has participated in discussions at various levels of government pointed at developing solutions for the housing supply issue in the GTA. As these discussions continue, it will be important to remember that the condominium apartment market is not immune to a listings shortage,” continued Syrianos. While a lack of listings has been echoed for some time now in TREB's monthly and quarterly reports, TREB's own charts show that new listings over the past few months have either been similar or in some cases greater than figures recorded in previous years.
Meanwhile, a report on the rental apartment market shows that despite new rent control measures introduced as part of the province's Fair Housing Plan, average rental rates increased sharply in the third quarter. The average rent for a one-bedroom condominium apartment increased by over 11%, now sitting at $1,976. Two-bedroom rents also increased year-over-year, at a rate of 7.7% to a new average of $2,607, while overall listings and rental agreements signed both declined.
Once again, TREB is placing at least a portion of the blame on supply, voicing concerns that increased rent controls and a vacancy tax currently being discussed could put further strain on the supply of rental units if these regulations cut too far into profit margins. "If the current relationship between rental demand and supply remains in place moving forward, rent increases for available units will continue to trend well-above the rate of inflation. Economic and demographic trends suggest that rental demand will increase and there are real concerns that the already constrained supply of units for rent could get worse,” said Jason Mercer, TREB’s Director of Market Analysis.
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