Toronto-area home sales set record high in 2016, average prices soar
The average home price in the GTA has hit $730,472 -- up 20 per cent from December 2015.
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TORONTO — Annual home sales in the country's largest real estate market hit a record high last year, according to the latest data from the Toronto Real Estate Board, as activity in the closely watched Vancouver market began to slow.
TREB said Thursday its members had 113,133 residential property sales through the MLS system in 2016, an increase of 11.8 per cent compared to the previous year.
That includes 5,338 sales in December — an increase of 8.6 per cent from December 2015, despite a tight supply of properties for sale.
"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," TREB president Larry Cerqua said in a statement.
For the first time, the real estate board commissioned research firm Ipsos to conduct a survey on the activity by foreign buyers in the Toronto market.
The results of the online survey of 3,518 realtors, conducted between Oct. 6 and 21, suggested that 4.9 per cent of transactions in the Greater Toronto Area were with a foreign buyer.
In the City of Toronto, the rate of foreign buyers was five per cent.
The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.
"With our low Canadian dollar we are a very good investment for foreign buyers," said Caroline Baile, a Toronto-area broker with Royal LePage Your Community Realty.
However, Baile said perceptions among some that foreigners are the main factor driving home prices higher are mistaken.
"We've got low inventory," Baile said. "We've got limited development land. Our interest rates are still really low. We've got low new home construction, a strong economy and steady immigration ... especially into the Toronto urban centre."
TREB reported the average price of a home sold in the Greater Toronto Area soared to $730,472 last month, up 20 per cent from December 2015.
The board's MLS house price index, which adjusts for the different types of properties, was up 21 per cent in December from a year earlier.
The overall average selling price for the calendar year was $729,922 — up 17.3 per cent compared with 2015.
One of the major factors affecting prices was a constrained supply of active listings, which hit a 15-year low in December.
Total new listings for the year were down nearly four per cent according to Jason Mercer, TREB's director of market analysis.
Mercer added that government rule changes and policy debates have focused on high demand but "what we really need is more policy focus on issues impacting the lack of homes available for sale."
In October, the federal government made a number of changes aimed at stabilizing the country's real estate markets, including requiring stress tests for all insured mortgages.
The stress test change is intended to ensure that Canadians don't take on larger mortgages than they can handle, particularly in markets such as Toronto and Vancouver where affordability is stretched.
Sales activity in the GTA slowed down for several weeks following the implementation of the new rules, Baile said, but then rebounded.
"We've not really seen a huge impact," Baile said. "December sales were up almost 20 per cent over the same time last year, so it really did not have an effect."
Toronto's strong sales figures came a day after the Real Estate Board of Greater Vancouver reported that sales last year in the closely watched real estate market fell 5.6 per cent compared with 2015.
On Wednesday, the real estate board reported that the composite benchmark price for all residential properties in Metro Vancouver, as measured by the Multiple Listing Service home price index, was $897,600 last month.
The result represented a 2.2 per cent drop over the second half of 2016, but a 17.8 per cent increase compared with December 2015.
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Note to readers: This is a corrected story. A previous version said Vancouver's house price index was down in December but it was up compared with a year ago.