Market Update for JUN 2020
Following the broader movement to reopen the economy in June, we experienced a very positive result in terms of home sales and selling prices. Before the onset of COVID-19, there was a great deal of pent-up demand in the market. This pent-up demand arguably increased further over the past three months. We are still in the early days of recovery, but barring any setbacks, we should continue to see stronger market conditions in the second half of 2020 as households look to satisfy their ownership housing needs.
It is very important to note that the guidance provided above is predicated on the continued reopening of the economy, a gradually improving labour market situation in the GTA and sustained low borrowing costs. There remain substantial downside risks to the housing market, including:
• A resurgence in COVID-19 cases, which could prompt a pause or even dialing back of the reopening in the GTA, and the economic impacts; and
• A negative economic impact associated with the resurgence of COVID-19 cases in the United States, which could continue to impact trade, employment and overall household wealth via equity markets.
"Total residential transactions"
Greater Toronto Area REALTORS® reported 8,701 sales through TRREB’s MLS® System in June 2020. This result represented a very substantial increase over the May 2020 sales result, both on an actual (+89 per cent) and seasonally adjusted basis (+84 per cent), and was only down by 1.4 per cent compared to June 2019.
Year-over-year growth in sales was reported in some areas and market segments. Especially notable were the detached and townhouse market segments in the GTA regions surrounding the City of Toronto.
The MLS® Home Price Index Composite Benchmark was up by 8.2 per cent year-over-year in June. The average selling price for all home types combined was $930,869 – up by 11.9 per cent compared to June 2019. The actual and seasonally-adjusted average selling price was also up substantially compared to May 2020, by 7.8 per cent and 9.8 per cent respectively.
Average and benchmark selling prices were up year-over-year for all major home types. The strongest average annual rates of price growth were experienced in the detached and semi-detached market segments in the City of Toronto at 14.3 per cent and 22 per cent respectively. This, coupled with the fact that average selling price growth outstripped growth in the MLS® HPI benchmarks, points to a resurgence in the higher-end market segments.
A gradually improving labour market and historically low mortgage rates are expected to support a recovery in home sales in the second half of 2020 along with sustained year-over-year price growth. Given that home sales result in substantial spin-off expenditure in the regional economy, the housing market will be an important driver of overall economic recovery this year and into 2021.
"Sales to new listings ratio"
Sales to new listings ratio in Jun 2020 is 53.9% which is down by 1.9% compared to Jun 2019. (sales to new listings ratio for Jun 2019 was 55.8%)
What does 53.9% sales to new listings ratio mean? This means every 10 homes that are listed into market, almost 5 of them are being sold.
"MOI & DOM & Average SP/LP"
Above table shows; Semi-detached homes are fast selling property in the market and are being sold in average 3.6% over asking price.
In city of Toronto; number of sales in Jun 2020 for detached and semi-detached and condo apartment were down compared to Jun last year. But average price for all types of house was higher than same time last year. It is interesting that number of sales for semi-detached houses in city of Toronto was 21% lower than last year and at the same time average price for this type of property was 22% higher than last year.
Outside of Toronto; number of sales for condo apartment were 22% lower than same time last year, but average price was about 10% higher!
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