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Toronto house market sets new sales record in May

Staff writer |
The real estate market in the Greater Toronto Area remains as hot as ever, with the region setting a new May sales record with more than 12,000 homes sold.

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This is according to the Toronto Real Estate Board (TREB).

The home sales in May showed a 10.6 percent increase over the same period in 2015, despite the fact that the number of new listings was down by more than six percent.

"Whether we're talking about existing homeowners or people looking to purchase for the first time, there is no shortage of buyers in the marketplace today," TREB president Mark McLean said in a news release.

Robust home sales in the biggest Canadian city may not exactly be news, he added, but it does "mask the larger story in the GTA: the shortage of listings, which has resulted in strong upward pressure on home prices."

According to the board, the average selling price for all home types combined was up by 15.7 percent year-over-year in May. Low-rise homes remain in particularly short supply, which likely contributed to them experiencing the biggest price growth.

Overall, TREB said, the MLS Home Price Index composite benchmark was up by 15 percent year-over-year in May.

"Widespread competition between buyers of singles, semis and townhouses across the GTA has underpinned the robust annual rates of price growth experienced so far this year," TREB's director of market analysis, Jason Mercer, said in the release.

"With this said, however, it is also important to understand that tighter market conditions for condominium apartments have resulted in price growth well above the rate of inflation in this market segment, as well," said Mercer.

Overall, 12,870 homes were sold in the GTA in May, with an average price of 751,908 Canadian dollars (580,699 U.S. dollars). For the same month last year, there were 11,640 homes sold at an average price of 649,648 Canadian dollars.

Economists believe that rapid population and employment growth in Toronto and Vancouver, lack of developable space and low mortgage rates are the driving forces behind the skyrocketing house prices in both metropolises.