In what Canadian city can you find a housing market that has been averaging over $6 billion in monthly business over the past three months? If you guessed Toronto, you’re correct. Our raging real estate market has been making headlines quite frequently lately, setting another record in sales for the month of July. In an announcement made by Toronto Real Estate Board President Mark McLean, GTA REALTORS® reported 9,880 sales through TREB’s MLS® System. This number represents an eight percent increase in a year-over-year comparison, with apartment condominium apartment sales up an astonishing 13.7 per cent compared to the same time last year.
Toronto housing sales went up for all major home types with detached leading in terms of price increases. What has not increased, however, was the number of active listings in Toronto.
“With the level of inventory in the GTA trending below two months, many listings continued to generate a lot of interest from buyers. Not surprisingly, this supported further price increases well-above the rate of inflation. Assuming similar interest rate and economic environments over the next five months, strong price growth will remain the norm for the rest of 2015,” said Jason Mercer, TREB’s Director of Market Analysis.”
Typically, a balanced real estate market is when both buyers and sellers have an equal amount of leverage in the playing field. Types of markets are determined based on statistical evidence–namely a sales-to-listings ratio. In order for a buyer’s market to occur, the sales-to-listings ratio must be below 35 per cent. On the opposite side, a seller’s market occurs when there is a 55 per cent or greater sales-to-listings ratio. In general economic terms, when demand is greater than supply. A seller’s market leaves buyers competing for property, which leads to bidding wars. Of course, this works in a seller’s favour, giving them more control over the sales process. Toronto has been in a seller’s market for over two years and based on the health of our economy, we can look forward to steady expansion in the near future.