Strong demand continues with sales up 19% over the same month last year, but why aren't we seeing the bidding wars of previous years?
This strong demand for detached homes was seen in both the City of Toronto and the 905 regions.
Detached homes in the Toronto suburbs (905 regions) – York region in particular – saw the biggest decline in average prices when the market cooled in 2017.
Today, with prices much lower than what they were at the peak, we are seeing renewed interest from buyers for detached homes in these markets.
This surge in demand has helped push inventory levels down.
The year started with just over 4 months of inventory of detached homes in the GTA. For the past four months inventory levels have been just below 3 months.
That being said, inventory levels for high end homes, especially in York Region, are still quite high. Markham for example has over two years worth if inventory of $2M+ homes.
Despite this increase in demand and decline in inventory, average prices declined 1.4% in June over last year in the Toronto Area.
I believe that one of the reasons we are not seeing an acceleration in home prices for detached homes despite the tight inventory is the introduction of mortgage stress tests which have really limited what people can spend. While there are still bidding wars for houses today, they are far more restrained than they were a few years ago.
John Pasalis is President of Realosophy Realty, a Toronto real estate brokerage which uses data analysis to advise residential real estate buyers, sellers and investors.
A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been shared with the IMF and cited by the Bank of Canada and CMHC.
Follow John on Twitter @johnpasalis