I have been sharing TRREB's Market Year in Review & future Outlook since its inception. I am honoured again, this year to share their insights. This is a scaled-down version of the full 60 page report. This report will highlight market stats, some buyer and seller trends and what the future holds for the 2020 Real Estate Market. Here we go:
2019 Year in Review
Sales Growth Strenghthened Substamtially in 2019
Home sales reported through TRREB's MLS® System amounted to 87,825 homes - up by 12.6% compared to sales in 2018. The rebound in sales last year was especially evident in the low-rise market segment.
Supply of Listingds was Further Constrained
While there was a marked increase in sales across all major home types, the number of new listings actually declined on a year-over-year basis. This trend has been based on a number of ill-planned public policy moves over the better part of the past decade-and-a-half inlcuding:
- The City of Toronto's Municipla Land Transfer Tax (MLTT)
- The 2 percentage-point stress test on insured mortagages mandated by OFSI.
Above-inflation Price Growth in 2019
The average price for all home types combined in 2019 was $819,319 - up 4% compared to $787,856 in 2018. The average price grew at a similar annual rate in the City of Toronto and the surrounding regional municipalities.
Profile of Recent Home Buyers
The TTREB MLS® System stats and underlying economic drivers do not tell the whole story. It is also important to understand changing consumer sentiment and decision-making. Here are just a few points:
- The majority of recent home purchases were resale homes.
- Large down payments were common for most home buyers - between 20% and 24.9% of the purchase price.
- The most common source of downpayment were savings outside of an RRSP.
- Over 60% of home buyers using a mortgage took on a fixed rate mortgage - most for a 5-year term.
The latest Ispos Home Owners Survey found that 14% of respondents indicated that 'they were very likely to list' their home for sale in 2020. This share has hovered between 12 and 14% over the last 3 years. The bottom line - new listings will not keep up with sales growth in 2020, The end result will be an acceleration in price growth over this year, as an increasing number of home buyers compete for a pool of lstings that could be the same size or smaller than 2019.
Market conditions tightened throughout 2019 and continued to do so in January 2020 as well. With little or no relief forecast on the listings front over this next year and demand expected to increase, it is difficult to forecast anything but further increases to average home prices for all major home types in 2020.
The point forecast for the overall Average Selling Price in 2020 is $900,000.00, close to a 10% increase compared to 2019. This forecast rate of growth presupposes that price growth will continue to be driven by less expensive mid-density low-rise home types and condominium apartments. IF the pace of detached home price growth starts to catch up to that of other major home types, the Average Selling Price for all homes types combined could push well past the $900,000.00 mark over this next year.
I thank you for your time and commitment in reading this condensed report. If you wish further stats, information, or help with the purchase or sale of your home, please contact me through my website www.marilynpalmer.com.