Toronto home sales roared ahead in April, climbing almost 17 per cent from last year’s sluggish sales level as detached houses saw a sales leap.
The Toronto Real Estate Board said 9,042 homes sold in the Greater Toronto Area last month, a 16.8-per-cent jump from April last year when sales were weak after the implementation of a new mortgage stress test. Sales rose 11.3 per cent on a month-over-month basis from March, based on TREB’s preliminary seasonal adjustment.
The average sale price for all types of homes climbed 1.9 per cent over last April to $820,148, pushed higher by tighter market conditions.
The improvement in April sales comes on a low base last year, and comes after sluggish performance in the first three months of the year. TREB said some of the growth in April likely represents “catch up” from the slow start to the year.
“While sales were up year-over-year in April, it is important to note they remain well below April levels for much of the past decade,” Jason Mercer, TREB’s chief market analyst, said in a statement.
Toronto’s strong sales stand in contrast with Vancouver, which had its worst April for home sales in 24 years. The Real Estate Board of Greater Vancouver said on Thursday that sales were down 29.1 per cent from the same month in 2018. The benchmark price for detached homes, condos and townhouses also dropped month-over-month for the 11th consecutive time.
Although the condominium market has been the Toronto region’s hottest housing segment for most of the past two years, detached houses dominated sales in April.
TREB said sales of detached houses climbed by 22 per cent in April over last year, but average prices fell 1.3 per cent. The price decline was because of a 1.7-per-cent drop in detached house prices in the suburban 905 region, while prices in the City of Toronto were flat.
The average detached house price in the City of Toronto was $1,355,764 in April, while detached prices averaged $914,249 in the 905 region surrounding Toronto.
The condominium market continued to account for most of the price growth last month. Condominium sales climbed 6.7-per-cent in April and prices rose 5.1 per cent on a year-over-year basis to an average of $588,168, TREB said.
TREB president Garry Bhaura said Toronto’s housing market tightened in April as sales climbed more rapidly than new listings, and TREB is forecasting an acceleration in price growth this year.
New listings of homes for sale in April climbed by 8 per cent compared with April last year, which was lower than the 17-per-cent growth in sales. The number of active listings of homes available for sale as of April 30 was down 0.9 per cent compared with last year.
Mr. Mercer said the federal mortgage stress test, introduced on Jan. 1, 2018, is still keeping buyers on the sidelines. The test requires buyers to prove they could still afford their mortgages even if interest rates were two percentage points higher than the rate they negotiated with their banks.
Mr. Mercer said that with long-term mortgages rates falling this year and the outlook for interest rate increases is flat to declining – which suggests buyers face a lower risk of being harmed by rapid interest-rate increases – the government should ease the stress test.
Although home sales have weakened over much of the past two years, Mr. Bhaura said there is a continuing housing supply issue in the Greater Toronto Area and he supports moves announced last week by the Ontario government to boost the supply of housing in the Toronto region.
The province announced new measures to speed up approvals of development applications, reduce density requirements in new suburban developments and increase the power of its land use appeal tribunal to make final decisions.