TRREB Releases July Resale Housing Report
Toronto Regional Real Estate Board President Lisa Patel announces that Greater Toronto Area REALTORS® reported 11,081 sales through TRREB’s MLS® System in July 2020 – a 29.5 per cent increase over July 2019 and a new record for the month of July. On a preliminary seasonally adjusted basis, sales were up by 49.5 per cent compared to June 2020.
Year-over-year sales growth was driven by low-rise home types, particularly in the regions surrounding the City of Toronto. However, condominium apartment sales were also up on an annual basis, including in Toronto.
Total new listings were also up strongly on a year-over-year basis by 24.7 per cent, but this annual growth rate was less than that of sales, which means market conditions tightened on average compared to July 2019. In addition, active listings at the end of July were down by 16.3 per cent.
“Sales activity was extremely strong for the first full month of summer. Normally we would see sales dip in July relative to June as more households take vacation, especially with children out of school. This year, however, was different with pent-up demand from the COVID-19-related lull in April and May being satisfied in the summer, as economic recovery takes firmer hold, including the Stage 3 re-opening. In addition, fewer people are travelling, which has likely translated into more transactions and listings,” said Ms. Patel.
The July 2020 MLS® Home Price Index (HPI) Composite Benchmark was up by 10 per cent compared to July 2019. The overall average selling price was up by 16.9 per cent year-over-year to $943,710. On a preliminary seasonally adjusted basis, the average selling price was up by 5.5 per cent compared to June 2020.
Price growth was strongest for low-rise home types, notably within the City of Toronto. Despite more balanced market conditions in the condominium apartment market segment, year-over-year price growth remained in the high single digits.
“Competition between buyers continued to increase in many segments of the GTA ownership housing market in July, which fueled a further acceleration in year-over-year price growth in July compared to June. On top of this, we also experienced stronger sales growth in the more-expensive detached market segment, which helps explain why annual growth in the overall average selling price was stronger than growth for the MLS® HPI Composite benchmark,” said Jason Mercer, TRREB’s Chief Market Analyst.
Focus on Housing Policy and Economic Recovery
In recent weeks, it was reported that the Canada Mortgage and Housing Corporation (CMHC) contributed funding towards a project that includes research on the idea of a capital gains tax on the sale of a home owner’s principal residence. CMHC has publicly indicated that a home equity tax is not the focus of the upcoming research. It has been TRREB’s long standing position that such a tax should not be considered and discussion of any research should go no further.
TRREB is encouraged that Minister Ahmed Hussen, who is responsible for the CMHC, has publicly indicated that this proposal is not under consideration by the federal government. TRREB is opposed to taxation of the equity on principal residences because it discourages home ownership and ignores the important role that home ownership plays in stability, security, and wealth creation for individuals and families.
“The long-term solution to housing affordability in Canada, for both ownership and rental, is to ensure that there are adequate and appropriate types and tenures of housing available in the market. This should be the focus of all levels of government and related agencies rather than discussions on capital gains taxes on many Canadians’ largest investment and a cornerstone of retirement planning. TRREB would be happy to work with any level of government or related agency on researching and implementing solutions to the persistent housing supply shortage in the GTA and country-wide,” said TRREB CEO John DiMichele.
TRREB’s policy recommendations related to economic recovery and housing supply are outlined in a detailed policy brief that was recently submitted to local, provincial, and federal governments, with a key message to use caution in implementing demand-side real estate market stimulus which could contribute to housing price inflation. With regard to housing supply, which is key to improving housing affordability, TRREB’s key recommendation is for all governments to expedite the creation of “missing middle” housing. In this regard, TRREB applauds Toronto City Council’s recent approval of a plan to create more missing middle housing in the City’s “Yellow Belt”, which refers to the 35 per cent of the City designated as “neighbourhoods”, of which 70 per cent only allow detached housing. TRREB also supports the Province of Ontario’s recently announced initiatives around transit oriented mixed use communities and related infrastructure.
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