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MARKET UPDATE FOR THE WEEK ENDING MAY 6TH, 2022
Greater Toronto real estate slowed last month and it’s not a total mystery. Demand is eroding due to higher rates and buyer exhaustion. This has led to healthier levels of relative inventory, allowing price growth moderation. Economists warn once prices slow (or fall), more investors will be motivated to sell. Considering investors represent over a quarter of buyers, that’s a lot of potential inventory that can drive prices lower.
The Toronto Regional Real Estate Board (TRREB) reported fewer new listings, but the decline wasn’t nearly as significant as the drop in home sales. New listings came in at a healthy 18,413 units in April, down 11.7% from last year. Since 2015, only two Aprils have seen a higher number of new listings — 2021 and 2017. It fell less than sales, but the number of listings was above typical for the period. Home sales falling faster than new listings means less pressure on inventory levels.
GTA home sales shrunk after a heated first quarter. TRREB reported just 8,008 sales in April, a drop of 26.9% from a month before. Sales came in 41.2% lower than last year, excluding April 2020. It was the fewest sales in the region since 2018. Falling sales aren’t unusual in markets with low inventory, but that wasn’t the case this time. Inventory levels are improving.
The housing market cool down prompted by rising interest rates is being felt more acutely in the suburbs of Toronto, where sales and selling prices are trending downward into the summer at a fast pace. According to TRREB, the average selling price of a home in the GTA fell 6.4 percent between March and April, and one percent between February and March, after almost a year of only upward movement.
After Torontonians flocked to the suburbs, experts say the pandemic-fueled balloon outside the downtown core is starting to deflate as the cost of borrowing rises and offices reopen their doors.
Home prices were up 15 percent year over year in April across all markets, according to TRREB. Sale prices in Toronto went up 14.3 percent year over year, while prices in the rest of the GTA went up 15.4 percent. Selling prices for detached houses were up 17.5 percent, at an average of $1.26 million in the suburbs, compared to $1.63 million in the City of Toronto.
Condos appreciated faster at price in the suburbs at $789,869 up 14% compared to the downtown condo average sale price of $820,835, up 12%, year-over-year.
Sales have declined over the past six or so weeks, which is the opposite of what normally happens in the spring for real estate. Sale volumes are down year-over-year — a whopping 41.2 percent from last April — and according to TRREB, the decline is even bigger outside of Toronto’s core, especially for detached houses.
In the 905 area sales were down almost 45 percent, with detached homes down more than 47 percent.
The same is happening downtown, but the change is not as steep, likely because prices weren’t as inflated from the pandemic as they were outside of the city core.
It’s also possible that there’s renewed interest in living downtown. After all, with gas prices skyrocketing and employers beckoning employees back to the office, the benefits of a bigger house in the ’burbs might be outweighed by an increasingly expensive commute.
A Scotiabank housing poll found in April that more than half of young Canadians are putting their home-buying plans on hold because of the current economic environment and interest rate outlook.
With 62 percent of younger Canadians waiting for housing prices to come down before buying, according to the results of the survey, sellers may feel the urgency to sell sooner as rates rise and the shift in attitude becomes apparent.
ABOUT BOSLEY REAL ESTATE LTD., BROKERAGE
Bosley Real Estate Ltd. is a full-service, 4th generation brokerage operating since 1928 with offices serving Toronto, Niagara, Waterloo Region, Southern Georgian Bay and Port Hope. With over 250 agents in residential and commercial real estate, the firm has built a reputation on trust, respect, and integrity selling and leasing property throughout Ontario. Bosley Real Estate is also recognized internationally through an exclusive affiliation with Leading Real Estate Companies of the World®. This prestigious partnership connects the brokerage to a global network of 150,000 real estate professionals in 70 countries. Headquartered in Midtown Toronto, President, and Broker of Record, Christan Bosley continues to innovate and maintains the high standard of excellence forged over a century.
For Buyers
When buying your house, this will no doubt be one of the largest financial transaction most people will ever make. With our expertise we will help guide you through all the obstacles during this difficult decision.
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When selling your house, our goal is to sell your property at top market value, quickly and painlessly. See how we can help get you more. When you make the important decision to sell a home, we are committed to going the extra mile.
