Tight supply drove up home prices in August: TRREB

The Toronto Regional Real Estate Board (TRREB) is reporting strong sales for the month of August considering the seasonal lull, and it noted that tight supply conditions have driven the benchmark price of a home in the region up by 17.4% compared to the same month last year.

At $1,070,911, the average selling price also rose by 12.6% year-over-year. The real estate board also said that, at 21.4%, low-rise homes continued experiencing the strongest pace of annual price growth of all housing segments to reach $1,423,807.

At 8,596, August had the third-highest number of sales in the GTA ever recorded for the month, says TRREB, however, that’s still 19.9% below the 10,738 transactions during the same month in 2020. The condo segment of the market nevertheless betrayed the trend with 2,544 sales, an 11.3% year-on-year increase, which brought the price up by 9.4% to $688,568. Condo sales were much higher in the City of Toronto, where they increased by 13.2% to 1,738, than they were in the 905, where the 806 transactions marked a 7.5% rise.

However, detached home sales in the GTA plummeted by 31.5% to 3,704 in August from a year earlier. At 3,010, sales were strongest in the 905 but still decreased by 30.2% from August 2020. The 694 detached home sales in the City of Toronto were a 36.6% drop from last year.

New listings also fell by 43% year-over-year.

“The fact that new listings were at the lowest level for the past decade is alarming. It is clear that the supply of homes is not keeping pace with demand, and this situation will become worse once immigration into Canada resumes. The federal parties vying for office in the upcoming federal election have all made housing supply and affordability a focal point. Working with provincial and municipal levels of government on solving supply-related issues is much more important to affordability than interfering with consumer choice during the homebuying and selling offer process or revisiting demand-side policies that will at best have a short-term impact on market conditions,” Kevin Crigger, TRREB’s president, said in a news release.

Semi-detached sales in the GTA hardly registered, with only 750 recorded last month, a 29.3% decline from August 2020. However, the average price still rose by 13.9% to $1,031,580.

Townhouse sales declined by 19% to 1,509 in the GTA, although at 1,181, the lion’s share occurred in the 905, where transactions were down by 20.8% from a year earlier.

2021-09-07 13:20:56

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