While April certainly saw its fair share of showers, the beginning of Spring and hypothetical end of Winter also saw the start of the Spring market in the Real Estate sector. After TREB released its monthly sales figures for April, its easy to see how the relative shortage of inventory in Toronto is having both positive and negative effects on the market, depending on one’s point of view.
“April marked the beginning of the spring market, during which time we generally see the highest monthly sales totals in a given year. Despite the persistent shortage of listings, a substantial number of GTA residents were able to come to terms on a home that met their needs. However, sales levels would have been higher, but for the lack of supply,” said Diane Usher, President of the Toronto Real Estate Board.
A fortuitous combination of mortgage/interest rates, lending policies and consumer confidence has made this an ideal time for buyers. Unfortunately the flip side of that is that factors like the Land Transfer Tax have kept the supply of family homes in Toronto relatively short. If not for this shortage, April 2014 could have seen exponentially higher growth over the previous year.
“A number of factors underlie the constrained supply of listings. Studies and polling suggest that the additional upfront land transfer tax in the City of Toronto has prompted some households to stay put and renovate rather than list their home and move. In the broader GTA context, above-trend home sales in the years leading up to the recession have meant that many households who purchased during this period simply aren’t ready to move again,” continued Ms. Usher.
Still, the month of April saw a 1.8% increase in transactions over 2013, which partially led to a 10.1 percent increase in average sale price, reaching $577,898. Despite the unfair cost of extra taxes, it remains a very attractive time for homeowners in the GTA considering the sale of their home.
“Price growth for the GTA as a whole was driven by the single-detached, semi-detached and townhouse market segments in the City of Toronto. So far this year, there has been no relief on the listings front for these home types in many neighbourhoods in Toronto and surrounding regions. Until we see a marked and sustained increase in listings, we should expect to see the annual rate of price growth above the long-term norm,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.
Until a change in the market dictates an increase in the supply of homes, the coming Spring and Summer seasons will continue to be a very favourable period for those opting to list their homes.