Toronto housing market breaks July record
The Toronto Real Estate Board (TREB) reported that this July saw the highest amount of sales for the month ever as the Toronto market refuses to cool off.
Sales up 1.8%, prices up 16.7%, the Toronto housing market continues to show overvaluation and signs of problematic conditions. As Canada Mortgage and Housing Corporation found in its recent market assessment, a lack of affordable housing in Toronto is making people move further away from the core, further spreading the supply problem to the rest of the GTA.
It’s reflected in how high the overall price for detached homes has gotten in the GTA. In July it stood at $952, 983. Not too far behind the $1,202,753 average price tag for a detached home in the city.
While buyers are settling for semi-detached or townhouses to afford their homes, the supply is still dwindling even for those. The high demand is driving prices up. Normally that would result in new listings hitting the market as owners take advantage of their built up equity, however in Toronto many people are holding onto properties, said TREB’s director of market analysis, Jason Mercer. According to Financial Post, Mercer believes one way to stop homes being overvalued is to increase the supply of homes people want to buy.
While it is a sound idea in principle, the risk of overbuilding looms heavy in the city, which already has issues with space. Mercer believes the city needs to add as many as 40,000 to 50,000 new listings to properly balance the market. A not insignificant increase when considering the city currently stands at 160,000 annually.
The board isn’t saying their plan is perfect, but they want the government to start thinking about trying to control housing supply instead as well as housing demand.