The month of May saw warmer weather and a real estate market heating up with more transactions. GTA Realtors reported a 10.5% increase in sales month over month and 18.9% year over year. The total number of 9,989 transactions was the highest number of sales in a month this year, surpassing the previous month’s high. During the month of May, the City of Markham had the largest number of transactions at 390, while the Town of Whitchurch-Stouffville completed a total of 79.
The average home price for all home types in the GTA continues to show increases year over year. May 2019 saw the average sale for all home types increase by 3.6% to $838,540. When we compare the average sale price of April 2019 to May 2019, we notice an increase of 2.24%. “After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing,” indicated TREB president Garry Bhaura.
The detached home market continues to drive sales in the 905. A total of 3,469 transactions (56%) were completed in May with the average sale price being $925,621. Townhouses were the next largest segment in the 905 with 1,290 sales (21%) with the average sale price being $629,049. On the opposite side, the 416 sees the majority of its transactions coming from the condo apartment (47%) market followed by detached homes (32%).
New homes available for sale in May were only up slightly year over year by 0.8%. The small increase in new listings coupled with the large increase in year over year growth in sales indicates that the market continues to tighten in favour of sellers. However, it is important to understand that each market operates differently. An experienced real estate agent in Markham or Stouffville will be able to assist in determining how your market is performing where you live.
The luxury market over $3 million operates at a level far different from the rest of the market. Since the beginning of the year, 5 luxury homes have sold in Markham with an average sale price of $3,473,678 while 56 properties remain on the market. In Stouffville, there has been no sale over $3 million while 16 properties remain on the market.
What Does this All Mean?
The market performed well last month with a large number of sales. However, there are many factors to consider in the coming months. Interest rates have remained steady since the last increase on October 24, 2018. Although there has been no signal from the Bank of Canada that interest rates will rise (next decision on July 10), it is important to watch the economy as this will be a clear indicator if rates will go up or remain the same.
Buyers are still coming to terms with the OSFI mortgage stress test and are finding creative ways to purchase their desired home.
If sales continue to outpace listings, we could see further price growth at a rapid pace which would mean more buyers placing offers on a home above its market value. The next few months will provide valuable information on how the rest of the year will look.