September Housing Figures

The September housing figures offered another mixed bag of data for the GTA market.  The promised fall rebound in sales did not arrive, as total sales actually dropped in a month to month comparison with August (6,455 vs. 6,839).  Sales were up slightly over last September but with how depressed 2017 sales were, bettering that total would have to be considered the bare minimum to show any market strength.  For the year, total sales continue to trend under TREB’s 85,000 – 95,000 forecast, and remain in alignment with our estimate from last month of 80,000 – 83,000.

The most interesting number from the September report has to be the price of the average home for Toronto.  The city’s average had a massive increase from just last month, rising from $785,223 to $864,275.  That is a 10% price increase in just one month and represents a 7% increase from September 2017, which makes it a number worth examining.

In our August sales post we outlined where the percentage of sales fell between the four major housing types: detached, semis, townhouses and condos.  Below we show where the Toronto sales split within the housing market and compare those figures to last month and last September.

Type of Home

Percentage of Total Sales

September 2018 August 2018 September 2017
Detached 27.1% 25.5% 25.8%
Semi-detached 10.4% 7.9% 10.2%
Townhouses 10.2% 9.3% 9.2%
Condos 52.3% 57.3% 54.7%

In comparison to last month and last year, this September’s sales have a higher percentage of total sales in the more expensive home segments, with detached sales representing over 27% of total sales.  This redistribution of sales limited the condo market to a 52% market share, which naturally raises the city’s average and median prices by including more higher priced homes.  In total, the shift in sales percentages represented nearly 30% of the city’s average price increase year over year.

The distribution of sales shifted slightly from condos to detached homes, however, the condo segment was where the significant price gains were realized.  Detached prices in Toronto and the entire GTA were down 1% over last year, while condo prices had strong increases, with 11.7% in Toronto and 6.4% for the remainder of the GTA.  These increases continue to raise the price floor for entry into the housing market and could begin to put price pressures on the more expensive housing segments.

Finally, it is worth mentioning the sales to new listing ratios from this report.  Overall for the region the ratio was 41%, placing the market barely in what is considered balance territory (balance being defined as between 40-60% sales to new listing ratio).  Not surprisingly, Toronto, where the prices went up nicely, had a tighter market with a ratio of 45%.  A figure that is still well within the bounds of a balanced market.  It was the rest of the GTA that offers a ratio to monitor.  The suburban ratio sat at 38%, which places the GTA in a buyer’s market condition.  It should be noted that this is an improvement over last September’s 35% ratio; however, given the essentially flat suburban prices, it is a stat to watch throughout the fall.

As always we will now have to wait to see what next month brings.

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