Toronto home sales rise in June as supply remains crunched
Toronto home sales jumped again in June, nudging prices higher and narrowing affordable options for buyers.
A total of 8,860 homes changed hands in Canada's biggest city in the month, up 10% from the same month a year earlier, the Toronto Real Estate Board reported Thursday. New listings fell 0.4% to 15,816, leading to increased competition between buyers and price increases across certain segments.
Benchmark prices, which adjusts for the type of housing sold, rose 3.6% to C$798,500 ($611,500) from a year ago, driven by gains in semi-detached homes, townhouses and condos.
The average price of a home increased 3% from last June to C$832,703. While sales of detached homes surged 19% from last year, they were the only segment to see prices drop on an average basis, falling 1.4%.
Toronto home sales have bounced back in recent months after slumping amid tighter mortgage-lending rules and higher interest rates in the past year. Despite the rebound, the housing board continues to ask policy makers to provide more flexibility on mortgage qualifications and to take measures to boost supply.
"Buyers started moving off the sidelines in the spring," Jason Mercer, TREB's chief market analyst, said in a statement. "However, because we saw virtually no change in the number of new listings, market conditions tightened and price growth picked up, especially for more higher density home types, which, on average, are less-expensive than traditional detached houses and therefore provide more affordable housing options."
Condos were the only segment to see a sales drop, falling 3.2% from the same period last year. The decline was largely driven by sales in the core of the city, which saw sales fall 5.6% compared to a gain of 2.7% in the greater Toronto region. Still, condo prices continued to rise overall, with the benchmark price up 7.5% in June to C$539,500 from the same month a year ago.
The number of condos leased jumped 15% in the second quarter to 9,749 from the same period last year, as listings grew by 29%.
Rents continued to rise but at a slower pace. A one-bedroom condo in the Toronto region rented for an average C$2,192 in the second quarter, 6.7% higher than last year but only slightly higher than C$2,143 in the first quarter. Rent on a two-bedroom condo rose 4.3% to C$2,873.
"Renters do appear to be benefiting from more supply in the marketplace," Mercer said. But he added rents are still growing well above the rate of inflation, suggesting even more supply is required to keep up with population growth and new household formation.