MARKET INSIGHT FOR THE WEEK ENDING August 4th, 2023
The Greater Toronto Area’s real estate market appears to be balancing out, with sales trending lower as new listings gained steam in July.
The number of home sales that took place in July did still show growth compared to the same time last year, but at a slower rate than has been seen in recent months, according to new data from the Toronto Regional Real Estate Board (TRREB). With a total of 5,250 transactions recorded last month, sales were up 7.8% compared to July 2022. This is significantly smaller than both the 16.5% year-over-year increase seen in June and the even bigger 24.7% annual jump seen in May. Even on a seasonally adjusted basis, sales trended lower for the second month in a row.
“Home sales continued to be above last year’s levels in July, which suggests that many households have adjusted to higher borrowing costs,” said TRREB President Paul Baron. “With that being said, it does appear that the sales momentum that we experienced earlier in the spring has stalled somewhat since the Bank of Canada restarted its rate-tightening cycle in June. Compounding the impact of higher rates has been the persistent lack of listings for people to purchase compared to previous years.”
The sales slowdown allowed new listing growth to sneak ahead in July, sitting at 11.5% compared to the same time last year. Of the new listings, which totaled 13,712, the majority were in the 905 regions outside of Toronto, accounting for 8,595 of the for-sale homes.
Despite the sales cool down and listing growth, market conditions were still tight enough to spur another price jump. The MLS Home Price Index Composite benchmark jumped up 1.3% year over year, meanwhile the average selling price was up 4.2% annually to $1,118,374.
Detached homes, townhouses, and condo apartments all saw their average prices go up across the GTA by 9.1%, 7.5%, and 11.1%, respectively, but semi-detached homes, interestingly, saw prices dip by 4.9%.
The only other housing type that saw average prices fall was Toronto townhouses, with prices down 12%. A 13.9% increase in 905-area townhouse prices, however, accounted for the overall net gain for the GTA.
TRREB Chief Market Analyst Jason Mercer notes that the continued interest rate hikes seen this year, coupled with the overall economy, have impacted sales in a way that wasn’t seen in 2022.
“Over the long term, the demand for ownership housing will remain strong on the back of record population growth,” Mercer said. “However, many homebuyers will continue to be on the sidelines in the short term until the direction of monetary policy and the economy becomes clearer.”
TRREB CEO John Di Michele pointed to a “misalignment in public policy as it related to housing” as another sore spot.
“The federal government is targeting record levels of immigration for the foreseeable future, but we have seen very little tangible progress in creating more ownership and rental housing to accommodate this growth,” Di Michele said. “Population growth is imperative for economic development; however, this growth will be unsustainable if people can’t find an affordable place to live. All three levels of government need to be on the same page to fix this problem.”
Here are the top 5 trending stories of the week:
- Canada: Tips For Preventing Title And Mortgage Fraud “As real estate values have skyrocketed in the past five years, especially in Canada’s major cities, so too have cases of mortgage fraud. In fact, mortgage fraud has recently gained national media exposure from a series of news reports by the CBC. Picture this scenario: you have just returned to your Toronto condo after a lengthy sabbatical only to discover that your key doesn’t fit in your front door. You are then met by complete strangers, who believe themselves to be the rightful owner of your condo and have the legal documentation to prove it.”
- Canada’s Immigration Strategy Could Widen Housing Supply Gap By Another 500K Units “A new report from TD Economics warns that Canada’s housing supply gap could widen by 500,000 units within the next two years if immigration continues at its current pace. Over the past year, Canada’s population grew by 1.2M people — more than double the pace seen in 2019 and the years preceding — 60% of whom were non-permanent residents, such as refugee claimants or those with a work or study permit.”
- The average price of a new condo in Toronto just plunged for the first time in a decade “Even though terribly average homes in Toronto are hitting the market for $10 million and the average price for any home in the GTA sits around $1.2 million, prices for new condos in particular are finally dropping for the first time in 10 years.”
- As housing prices spike, Trudeau now says it’s not a ‘federal responsibility’ “I’ll be blunt … housing is not a primary federal responsibility, it’s not something that we have direct carriage of,” Trudeau said at a Monday press conference announcing the opening of several federally subsidized housing complexes in Hamilton, Ont.”
- Edmonton and Calgary become top-searched cities for real estate “More homebuyers are turning to Alberta, specifically Edmonton and Calgary, in search of affordable housing options, according to new data from Royal LePage. Online searches on the company’s website for homes in these cities have significantly increased since 2019, with out-of-province buyers driving the demand for more budget-friendly markets. “
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