Home Prices Rise Against Tighter Supply in August

August appears to have cemented the Toronto region’s real estate recovery, with average resale home prices up 4.7 per cent year over year to $765,270, including single-family homes and highrise apartments. That is about $34,000 higher than the average a year ago.

There were also about 500 more transactions — an 8.5 per cent increase — compared to August 2017.

The number of detached-house sales increased 19.2 per cent in the 905 areas outside of Toronto to $907,780 on average. Detached homes also saw a 12.3 per cent jump in sales in the City of Toronto, where they sold for $1.24 million on average.

The average Toronto-area resale condo price also rose 6.4 per cent to $541,106. The number of sales, however, remained flat overall, increasing 0.7 per cent year over year in August.

The gains are a sign that buyers are finally stepping back into the market in the latter half of this year as the Toronto Real Estate Board (TREB) had predicted, said Garry Bhaura, board president.

“Many home buyers, who had initially moved to the sidelines due to the Ontario Fair Housing Plan and new mortgage lending guidelines, have renewed their search for a home and are getting deals done much more so than last year,” he said in a press release.

Tight market conditions contributed to the strong August, said the board’s director of market analysis, Jason Mercer.

“The annual rate of sales growth outpaced the annual rate of new listings. We only have slightly more than two-and-a-half months of inventory in the TREB market as a whole and less than two months of inventory in the City of Toronto,” he said, adding that there is a dearth of homes available to buy in many neighbourhoods.

“This could present a problem if demand continues to accelerate over the next year, which is expected,” said Mercer.

Although month over month prices were flat in August after three months of growth, the real estate board’s Multiple Listing Service Home Price Index showed slightly lower declines in some struggling areas such as York and Durham regions.

Townhouses, which have increasingly become the starter home of choice in the GTA, also saw a 2.3 per cent average year over year price drop to $635,514 and a 20 per cent decline in the number of sales.

The real estate board is encouraging politicians to boost the supply of those kinds of “missing middle” homes as municipal elections loom in the fall.