John Pasalis in Toronto Real Estate News
The Toronto Real Estate Board reported a record 9,967 resale home sales for July, a 28% increase over the same month last year. Average prices increased last month by 6% to $395,414.
"Households confident in their positioning within the current economic environment have taken advantage of housing affordability in the GTA," said TREB President Tom Lebour. "The real estate sector has been one of the sectors making a positive contribution to economic growth in the GTA, not to mention Ontario and Canada more broadly."
But the big story continues to be the shortage of homes available for sale in Toronto’s real estate market. The inventory of homes available for sale dropped by 36% over last year. Surging demand for homes and a dwindling supply is pushing prices higher and driving the multiple offers we are seeing in the market.
Last month 14% of houses that sold had multiple offers compared to 5% last year.
The following chart shows the monthly inventory over the past four years.
The Sales to Inventory ratio continues to show the significant imbalance we are seeing in the market. The higher the sales to inventory ratio the further we are in to a seller's market where demand exceeds supply.
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Alarming Imbalance in Toronto's Real Estate Market
John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Email John
John,
Low interest rates are the only reason "affordability" could be considered high -- though an average purchase price that is over 5 times the average income in Toronto hardly seems "affordable". What would be even more interesting, though, is an exploration of the reasons behind the lack of *supply* in the market. Perhaps this could be a topic for a future post?
Posted by: Jordan | August 06, 2009 at 03:01 PM
From what I have been hearing around the water cooler is that the lack of availability, especially in the Condo market, is due to the 'investment' mentaility that has been impressed into many of the buyers minds. Reading through a lot of the articles in both the Post, Globe and Star over the past several months, one will notice a trend. Every agent being quoted says buy to invest.
Later this year 30 some-off thousand new units will hit the market. Now combine with with Jordon's 'affordability' interest rate, and what do we get? Well I think disaster.
You will have a lot of people stuck with 'investments' they bought at a low interest rate, high price, paying and what soon will be 9% interest, unable to rent or offload...
Posted by: Jon | August 12, 2009 at 02:59 PM