Hot Toronto housing market got even hotter in May as warnings mount

TORONTO — The Toronto area’s real estate market set a new record last month, with nearly 13,000 homes sold.

That’s up 10.6 per cent from May 2015 in what was already one of Canada’s hottest real-estate markets.

The Toronto Real Estate Board says there’s a shortage of listings for low-rise types of housing, such as single family homes.
As a result, the industry group says there’s heated competition among buyers that has pushed up prices.

Its home price index was up 15 per cent in May compared with the same month last year.

Last month’s average sale price in Toronto itself was $782,051. In the rest of the GTA, the average was $734,924.

The association says there were 12,870 homes of all types sold through its Multiple Listing Service in May. That included 4,638 in the city itself and 8,232 in surrounding areas.

Those compared with 11,640 home sales of all type in May 2015, including 4,166 in the City of Toronto and 7,474 in the surrounding areas.

TREB president says there’s no shortage of buyers but the bigger story is a “shortage of listings, which has resulted in strong upward pressure on home price.”

The total number of new listings across the GTA was 17,412 last month, six per cent fewer than 18,611 in May 2015.

TREB’s director of market analysis, Jason Mercer, adds that “widespread competition between buyers of singles, semis and townhouses across the GTA has underpinned the robust annual rates of price growth experienced so far this year.”

The average price for a detached house in Toronto proper was $1.28 million last month, up 15.2 per cent from a year earlier.

The real estate association’s monthly statistics follow a warning on Wednesday from the Paris-based OECD, an economic think-tank, which said Ottawa should do introduce new measures to reduce some of the risk associated with soaring home prices and household debt levels in Toronto and Vancouver.

It wasn’t the first time that the OECD called for measures to cool sky-high house prices in Toronto and Vancouver, which together comprise a third of the country’s real estate market. It made similar comments in its report last December.

Since then, Finance Minister Bill Morneau has increased the minimum down payment for homes over $500,000, a measure aimed specifically at the Toronto and Vancouver markets.

As of February, homebuyers must put down 10 per cent on the portion of a home over $500,000. Buyers can still put down five per cent on the first $500,000 of a home purchase.