The Consistency of New Listings

Over the past decade there have not been many constants in the GTA’s real estate market. Prices have gone up for the most part (minus 2017/18); however, the extent that they rose each year varied significantly. Likewise, sales volumes have seen record peaks as well as modern lows. One factor that has remained impressively constant is the number of new listings each year. In comparison to sales and prices, the total number of new listings the GTA was going to see each year could have been forecasted with extreme accuracy thanks to its high predictability.

New Listings TotalsSource: TREB, Six Housing Sense

Over the last 8 ½ years, new listings totals have been far more reliable than sales. Not surprisingly, 2017 had the highest number of new listings thanks to the price run at the beginning of the year and then the fear that set in when prices began to drop in the second half of the year. Still, the total number of listings was only 31,552 more than the lowest total year of 2011. In contrast, though annual sales totals for the GTA are obviously lower than the number new listings, peak sales realized in 2016 were 35,011 more than the low seen in 2018.

New Listings vs avg totalsSource: TREB, Six Housing Sense

Looking at this in terms of percentages, 2017’s new listings total was only 21% higher than the lowest level seen in 2011. Further, if we remove the best and worst years, the total number of new listings has only varied by 4% year to year through the past decade. In comparison, sales have swung by 45% from high to low and still by 18% when the best and worst years are removed.

new listings TO D and CSource: TREB, Six Housing Sense

By examining a sub-set of the GTA’s market, we see some evidence to suggest new listings may be constant across the region but can vary by city and housing sector. The graph above shows the annual new listings totals over the last five years for Toronto’s detached and condo markets. From the detached market we see strong consistency across the last five years, with only a 16% difference between the best and the worst years. This in comparison to detached sales totals which have varied by 55% from high to low over the same period.

Toronto’s condo market, however, tells a different story. New listings have fallen off over the past five years, creating a best year to worst year variance of 34%. This is the same percentage difference that condo sales have experienced. This information would suggest that the stability seen from the GTA market as a whole does not perfectly extend to all housing segments.

Given the importance that inventory levels have on price pressures, the relative consistency of new listings each year does shift all the focus on to sales. If sales rise, as they were through much of the past decade, prices will be increasing; however, any sales struggles will only have a modest impact on new listings, and thus help ease the upward price pressure. Moving forward knowing the high likelihood of consistency from new listings, future price gains will be directly tied to how well sales volumes are doing, and thus likely foreseeable.

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