TRREB Reports Third Consecutive Record-Breaking Month of Home Sales | UrbanToronto
The Greater Toronto Area (GTA) housing market is on fire, with the Toronto Regional Real Estate Board (TRREB) reporting a third consecutive month of record-breaking sales activity. While many in the media have noted that current conditions are indicative of a housing bubble, TRREB attributes the frenzied market activity to a combination of “favourable borrowing costs and continued improvement in many sectors of the economy.”
Downtown Toronto, image by Forum contributor Red Mars
While the rebound from a COVID-19 related slowdown is impressive, it is important to note that the numbers are measured year-over year, with last month’s figures being compared against the period when COVID-19 began to shut down the economy and stoke fear in the market. 15,652 sales were recorded in March, 2021, almost double the 7,945 sales recorded in March, 2020. When measuring just the first two weeks of March year-over year, the 6,504 sales reported during the first half of March, 2021 marked an increase of 41% from the first half of March, 2020, before pandemic conditions took their toll on the market. When comparing just the second half of March year-over year, the 9,148 sales reported between March 15 and March 31, 2021 represents a staggering 174% increase over the bottomed-out market we saw just one year ago.
“Confidence in economic recovery coupled with low borrowing costs supported a record pace of home sales last month. While the robust market activity is indicative of widespread consumer optimism, it is also shedding light on the sustained lack of inventory in the GTA housing market, with implications for affordability,” reads a statement issued by TRREB President Lisa Patel.
New listings increased 57% year-over-year in March, reaching 22,709. This large jump is once again the result of numbers being measured year-over-year against one of the darkest months in recent history for the world economy. Even with this large increase though, the annual growth rate for listings fell far short of the sales growth rate.
“With sales growth outstripping listings growth by a large margin, including in the condo market segment, competition between buyers in some market segments and the potential for double-digit price growth could continue without a meaningful increase in the supply of homes available for sale. This will become more apparent as population growth resumes over the next year,” stated TRREB Chief Market Analyst Jason Mercer.
After prices took a tumble last year, demand has been once again pushing prices upwards, with the average selling price in the GTA rising 21.6% year-over-year, now sitting at $1,097,565. This growth followed recent trends with prices largely driven by the low-rise suburban home markets.
“The current state of the market has reinvigorated discussions about potential demand-side policy interventions. Policies focusing on demand, such as a capital gains tax on primary residences, can have a short-term impact, but can also be fraught with unintended consequences like further stifling the supply of listings. The federal minister responsible for the housing portfolio has said his government will not entertain such a policy option, which is the right decision. We have been saying for too long now that policymakers must focus on the long-term goal of increasing housing supply in order to accommodate current and future demand,” reads a statement from TRREB CEO John DiMichele.
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