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Condos pushed total home sales in the Greater Toronto Area over the edge in 2016, logging a 20 per cent increase over 2015 to make last year the second consecutive record-breaking year for home sales in the region.
Strength in the condo segment was seen both in the City of Toronto — or the 416 area — and the suburban 905, with annual condo sales increasing 19.9 per cent and 21.1 per cent, respectively. That amounted to 29,727 total condo sales in the GTA for the year, according to the Toronto Real Estate Board’s (TREB) 2016 data published today.
Detached homes also recorded strong results when compared to 2015 sales data. Sales in this segment were up 3.1 per cent in the 416 and 12.9 per cent in the 905, for a total of 53,717 detached homes sold in the GTA in 2016.
The total number of homes sold, which also includes townhouses and semi-detached homes, was 113,133, enough to best 2015’s 101,299 sales. This is the second year in a row that sales have broken the annual record in the GTA. Before 2015’s record-setting result, the title was held by 2007, when 93,193 homes were sold.
“A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the GTA, as the region’s population continued to grow in 2016,” says TREB President Larry Cerqua in a media release.
In January of last year, TREB had forecast that 2016 would be another banner year for Toronto real estate with the potential to break 2015’s record. The board had predicted between 96,500 and 105,000 home sales for the region and 2016’s result bested even the high end of its forecast.
In a statement, Cerqua points out that Toronto housing demand seen in 2016 was “domestic in nature,” citing results of a recent member survey focused on foreign-buyer activity in the GTA that TREB commissioned from Ipsos.
“The results of the Ipsos survey suggest that the level of foreign buying activity is low in the GTA. Only an estimated 4.9 per cent of GTA transactions, in which TREB Members acted on behalf of a buyer, involved a foreign purchaser. In the City of Toronto, the share of foreign buyers was five per cent,” says Cerqua.
The full results of the Ipsos survey of TREB members will be released by the board on January 31st.
Home price growth also continued its upward trajectory in 2016, with growth rising from 10.7 per cent in January 2016 to 21 per cent in December 2016.
TREB’s Director of Market Analysis Jason Mercer commented that the constrained supply of listings was behind the price acceleration. Active listings at the end of December were at their lowest level in 15 years while total new listings for 2016 dropped by 4 per cent year-over-year, says Mercer.
This, according to TREB, led the MLS Home Price Index to hit $729,922, up 17.3 per cent over 2015’s reading. The average sale price for detached homes in the City of Toronto was $1,252,069 for 2016, up 19.5 per cent over the previous year. Meantime, the condo sale price in the city was $443,563, up 9.4 per cent over 2015. The 905 region saw similar price growth in both housing segments.
“In 2016, we saw policy changes and policy debates pointed at the demand side of the market,” says TREB’s Mercer, referring in part to a handful of stricter lending regulations introduced last year by the federal government and an ongoing debate over whether a “foreign-buyer” tax similar to Metro Vancouver’s should be introduced in Toronto.
“If we want to see a sustained moderation in the pace of price growth, what we really need is more policy focus on issues impacting the lack of homes available for sale,” he says.