Tom Lebour, National Post

The Greater Toronto Area (GTA) resale mar­ket was marked by strong year-over-year sales and price growth in Jan­u­ary. There were 4,986 sales in the Toronto Real Estate Board (TREB) mar­ket area last month, com­pared with 2,670 in Jan­u­ary 2009, when resale mar­ket activ­ity dropped off due to the eco­nomic down­turn. Over the same period, active list­ings were down 41%. With sales increas­ing rel­a­tive to the sup­ply of homes for sale over the past year, we con­tin­ued to see strong upward pres­sure on the aver­age sell­ing price. The aver­age price for last month’s trans­ac­tions was $409,058, rep­re­sent­ing a 19% annual increase.

I asked Jason Mer­cer, TREB’s senior man­ager of mar­ket analy­sis, if he expects to see sim­i­lar annual sales increases through­out 2010.

Mr. Mer­cer feels that “sales in 2010 will be in line with 2009 lev­els, but this increase will be dri­ven by activ­ity in the first half of the year. With a strong hand-off from 2009, sales in the first half of 2010 will be brisk, includ­ing a record num­ber of resale trans­ac­tions in the first quar­ter. In the sec­ond half of 2010, how­ever, we will see a bit of mod­er­a­tion, with lower sales com­pared with the record third and fourth quar­ter sales expe­ri­enced last year. The cost of home own­er­ship will start to rise, with mort­gage rates increas­ing, the aver­age home price con­tin­u­ing to trend upward and the aver­age house­hold income grow­ing at a below-average clip.

One of the big real estate sto­ries in Toronto, and indeed across the coun­try, over the last year has been list­ings, or lack thereof. It is Jason Mercer’s feel­ing that the pool of homes avail­able for sale will expand as we move through 2010.

“Strong sales and price growth will prompt a grow­ing num­ber of home­own­ers to list their homes for sale in 2010. Gen­er­ally speak­ing, the list­ings trend fol­lows that of sales and price, but with a lag. Given that we have seen strong sales and price growth for more than half a year, it makes sense that list­ings will recover this year. With more choice in the exist­ing home mar­ket, expect the rate of price growth to con­tinue, but at a more mod­er­ate pace in the sec­ond half of this year.”

It looks like 2010 will be another good year for the res­i­den­tial real estate mar­ket in the GTA. The quick recov­ery of exist­ing home sales and aver­age price was due in large part to improv­ing con­sumer con­fi­dence in eco­nomic recov­ery. It looks as if this con­fi­dence was well founded. All signs are point­ing toward the fact that the econ­omy con­tin­ued to grow in the fourth quar­ter of 2009. In the GTA, we expe­ri­enced the sixth straight month of job growth in Jan­u­ary. Sus­tained labour mar­ket recov­ery in the GTA along with renewed growth in all sec­tors of the econ­omy over the next year will be impor­tant to the health of the region’s hous­ing market.

I look for­ward to dis­cussing the mar­ket and its under­ly­ing dri­vers with you in more detail as we move through 2010.

Tom Lebour is pres­i­dent of the Toronto Real Estate Board, a pro­fes­sional asso­ci­a­tion that rep­re­sents 28,000 real­tors in the GTA.

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