The first quarter of 2017 has started off on a strong note in the Toronto and GTA real estate market. According to the Toronto Real Estate Board (TREB), both sales activity and average prices have both risen from its 2016 numbers. Despite a rise in sales, supply problems continue to plague Toronto and the GTA. Demand for housing is expected to grow for the rest of the year, especially from first-time buyers.
January 2017 – New year, same supply problems
The beginning of 2017 continued where the previous year left off – sales activity saw an 11.8% rise over the previous year, with 5,188 transactions compared to 4,640 in 2016. This rise was particularly strong for condominiums and apartments, and less so for low-rise homes.
Supply continued to be a problem within Toronto and the GTA, with new listings seeing a significant drop from 2016. January’s new listings were down 17.6% from January 2016’s numbers. Demand for housing is expected to continue to grow significantly, but it is feared that many prospective owners will struggle to find homes that meet their needs.
February 2017 – GTA households see home ownership as a long-term investment
Sales continued to rise in February, seeing a 5.7% year-over-year increase with 8,014 sales compared in 7,583 in 2016. Low supply numbers have led to a significant increase in sales price, with the average price rising by 27.7% year-over-year.
Demand for housing continued to rise throughout February, unmatched by the falling supply – 2017 experienced a drop of 12.5% for new listings. This phenomenon most likely means that current Toronto and GTA homeowners see owning real estate as a worthy long-term investment. According to a recent survey, TREB saw an even split in first-time buyers and current homeowners looking to purchase real estate in 2017 – meaning demand for Toronto and GTA real estate continues to grow for all types of housing.
March 2017 – New listings up amidst potential policy shakeups
March saw TREB urge against a new provincial tax on foreign buyers of real estate in Ontario, as the Board thinks it would not address the supply shortage currently facing Toronto and the GTA. The supply of Toronto area real estate has reached a 15-year low in 2017, and TREB has pledged to continue providing in-depth analysis on the issue.
Sales once again rose in the month of March, this time growing by 17.7% year-over-year. After a disappointing drop in new listings during the first two months of the year, March saw a much needed 15.2% rise in new listings. This doesn’t mean that the market is out of the woods yet, as the new listings growth is still lower than needed to compete with the sales growth numbers.
All in all, the first quarter of 2017 has proven that the real estate supply problem facing Toronto and the GTA is continuing to grow, which continues the trend of raising real estate prices.
