The second strongest December in history capped off a record year for home sales in the GTA. December sales of 5,338 units (up by a solid 8.6% versus December 2015) brought the 2016 calendar year total to 113,133 (up by an eye-popping 11.8% versus full year 2015). This was the second consecutive year of record home sales in the GTA. Of the four key market segments, sales growth was strongest within condominium apartments followed by detached homes. Volume growth throughout 2016 was supported by a strong regional economy, low unemployment, low borrowing costs and ongoing population growth. Off setting these factors to some degree was an acute shortage of resale inventory, which actually worsened throughout the year. In fact, year-end resale inventory stood at its lowest level in a decade-and-a-half. Clearly, had the market benefitted from more listings throughout the year, the 2016 sales total would have been even greater.
The annual rate of growth for the MLS® Home Price Index (HPI) accelerated throughout 2016- from 10.7% in January to 21.0% in December. The overall average selling price for calendar year 2016 was $729,922 – up by a staggering 17.3% versus 2015. The pace of the annual rate of growth for the average selling price also picked up throughout the year, ending with a 20.0% increase in December. Accelerating price growth during the year mirrored the accelerating decline in listings supply, noted above. In 2016, policy changes were implemented which were directed toward dampening the demand side of the market. However, the key to achieving a moderation in price growth will be an increased policy focus on the supply side. To put the inventory weakness into some sharper focus, 2016 average resale inventory declined by 30.3% versus 2015. This plunge was on the heels of a 9.6% decline in 2015 versus 2014, and an 8.1% decline in 2014 versus 2013.