The Toronto Real Estate Board reported 8,082 home sales in June 2018 – up 2.4% compared to the low June 2017 result. After preliminary seasonal adjustment, sales were also up 17.6% on a monthly basis between May 2018 and June 2018, continuing the trend of somewhat volatile month-over-month changes over the past year as home buyers reacted to various policy changes impacting the market.
Home ownership has proven to be a positive long-term investment. After some adjustment to the Fair Housing Plan, the new Office of The Superintendent of Financial Institutions (OSFI) stress test requirement and generally higher borrowing costs, home buyers are starting to move back into the market, with sales trending up from last year’s lows. Market conditions appear to be tightening, with sales accounting for a greater share of listings, as new listings have dropped compared to last year.
The average selling price edged up by 2.0% on a year-over-year basis to $807,871 in June 2018. After preliminary seasonal adjustment, the average selling price was also up by 3.3% month-over-month between May 2018 and June 2018. The MLS® Home Price Index (HPI) was down by 4.8% on a year-over-year basis, but remained basically flat month-over-month. The difference in the year-over-year rates of change between the average price and the MLS® HPI was likely due, at least in part, to a change in the mix of properties sold in June 2018 compared to June 2017, with low-rise home types accounting for a greater share of sales in June 2018.
The expectation is to see improvement in sales over the next year. Over the same period, however, it is likely that issues surrounding the supply of listings will persist. This suggests that competition between buyers could increase, exerting increased upward pressure on home prices.
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