Forecasting real estate is a tricky proposition. How strong is the Greater Toronto Area real estate market? The answer is in the numbers.
Comparing May 2015 to May 2016, the reported 12,870 sales in May 2016 set a record with a 10.6 percent increase. The average sales price was up over 15 per cent. New listings continue to decline with 6.4 percent fewer homes entering the market. Active listings are down 30.4 per cent. Days on the market declined 16.7 per cent.
Now examine trends over the last decade. The average sale price of a Toronto area residence nearly doubled from 2004 to 2014, rising 55.6 per cent. The total number of sales for the year bumped from 83,501 to 92,782. Keep in mind the global recession and housing bubble burst occurred around 2007.
Combine these real estate trends with other influencing factors: Toronto is expected to experience economic growth of 2.8 per cent. Mortgage rates remain low with no future major increase expected. Any increases will be incremental and over time. Employment is showing signs of growth in the metropolitan area, attracting residents from other regions. High foreign interest in Canada, and Toronto in particular, is expected to continue.
Economic experts have predicted the collapse of Toronto real estate since 2011. Last year forecasters expected to see a downturn. As the numbers clearly show, these warnings have not materialized.
What Toronto-Dominion Bank, the Bank of Canada, and others fail to consider is new construction and housing supply is not pacing with demand. Supply and demand is the basic engine in economics. People want to live in Toronto, which means housing demand. More listings in all market segments are needed to support the population growth. Until the housing shortage is addressed, GTA real estate will continue to thrive.
Barry Cohen knows Toronto Real Estate. Sellers seeking to maximize their value and buyers searching for their ideal home can benefit from his experience now more than ever. Visit Barry Cohen Group to see how we can help you today.