Toronto's Housing Troubles
The month of May was a beehive of activities for the Greater Toronto real estate market. According to Zoocasa.com:
A total of 9,989 homes traded hands, up 18.9% from the same time period last year, and an increase of roughly 10% from April’s activity. However, while the uptick in sales could indicate the policy-induced correction that has plagued the market over the last two years could be coming to a close, the Toronto Real Estate Board’s report emphasizes they’re still below the 10-year trend for the month, which typically sees over 10,000 homes sold.
In the City of Toronto proper, sales rose by 13% with 3,715 transactions, well outpacing the 6,648 new listings brought to market and marking a 4% increase year over year. That’s put upward pressure of 7.8% on the average price in the 416, which rose to $937,804.
Implying the possibility of a trend, data from Betterdwelling.com shows that:
The median sale price of homes across Greater Toronto made a substantial jump. The median sale price across TREB reached $725,000 in May, up 5.83% from last year. The City of Toronto median sale price hit $753,000, up 9.13% from last year. Both numbers are making a similar move as the benchmark. Condos are once again, largely responsible for this push higher.
The average sale price also made a pretty big jump across Greater Toronto. TREB’s average sale price reached $838,540 in May, up 3.61% from last year. The City of Toronto hit $937,804, up 7.84% from last year. The average increase was, once again, due to a jump in condo prices, and the rising price floor that comes with.
The Role of Population
To make things more interesting, a 12-month data collected claims Toronto is the 2nd fastest growing city in Canada and the US combined. According to Livabl.com
The city’s population ballooned by a jaw-dropping 77,435 people.
For context, the second-fastest-growing city, Phoenix, added 25,288 people over the same period.
Toronto’s gains overshadowed the combined population increases of America’s three most rapidly growing cities. Third-ranked San Antonio added 20,824 people, while Fort Worth followed at 19,552.
In a comparison of broader metro areas, Toronto places second claiming 125,298 new residents in 12 months versus the Fort Worth area’s 131,767.
“The sources of growth for Toronto and Dallas-Fort Worth-Arlington metropolitan areas were quite distinct,” reads the blog post by the center’s director Frank Clayton and researcher Hong Yun Shi.
“For metropolitan Dallas-Fort Worth-Arlington, births were by far the largest component of growth, followed by net domestic migration and net international migration,” they continue. via Livabl.com
Meantime, Toronto international migration was the biggest contributor to the metro area’s population boom, with births a secondary source.
There is definitely a connection between the growing population in Toronto and the increased activity on the Greater Toronto real estate market. That is a no-brainer. The influx of more people will always result in more housing transactions. The big question is: what happens when the influx reaches its threshold? Will the city’s real estate market struggle? These are critical questions that should be answered with decisive action.