GTA Market Watch Outlook
Prepared by Luke Tao, Broker
January 13th, 2020
- Condominium apartment starts will dominate new home construction
- Annual sales growth in all type of homes including detached houses which led the way
- The average apartment vacancy rate will reach a historic low
1. GTA Housing Market Analysis & Outlook for 2020
Toronto Real Estate Board reported that residential sales (Demand) were up by 17.4% year-over-year to 4,399 last month – December 2019. Total sales for calendar year 2019 amounted to 87,825 – up by 12.6% compared to the decade low 78,015 sales reported in 2018. On an annual basis, 2019 sales were in line with the median annual sales result for the past decade.
It has been a definite recovery in sales activity in 2019, particularly in the second half of the year. As anticipated, many home buyers who were initially on the sidelines moved back into the market place starting in the spring. Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year. new listings (Supply) continue to be very low comparative to the sales – new listings in December 2019 has dropped by -18.1% compared to same period in 2018, triggering a continue price surge for homes in all categories including the detached and semi-detached homes which were down between April 2017 and most of 2018.
Over the last ten years, TREB has been drawing attention to the housing supply issue in the GTA. Increasingly, policy makers, research groups of varying scope and other interested parties have acknowledged that the lack of a diverse supply of ownership and rental housing continues to hamper housing affordability in the GTA. Expect further acceleration in 2020 if there is no relief on the supply front.
The MLS® Home Price Index Composite Benchmark was up by 7.3% on a year-over-year basis in December 2019. From June 2019 onward, the annual growth rate in the MLS® HPI Composite Benchmark accelerated. The average selling price in December 2019 was $837,788 – up almost 12% year-over-year. For calendar year 2019, the average selling price was $819,319 – up by 4% compared to $787,856 in 2018.