The Greater Toronto Area housing market continued to rebound strongly through May, with sales posting the first year-over-year increase seen since November 2021.
According to the Toronto Regional Real Estate Board (TRREB), a total of 9,012 homes exchanged hands over the course of the month – up 24.7% from May 2022. That’s a dramatic turnaround from April’s activity, when sales – though improving – still lagged last year’ levels by nearly 6%. On a monthly basis, sales rose 5.2%.
However, the market continues to be defined by extremely scant supply, as new listings fail to materialize; 15,194 homes were brought to market, down -18.7% from a year ago. That’s considerably tightened buying conditions in the region, driving the sales-to-new-listings ratio to 59.3% – just shy of a bona fide sellers’ market.
GTA home prices on the road to recovery
That’s put upward pressure on prices, with the GTA average coming in at $1,196,101. While that hasn’t yet closed the year-over-year gap, remaining -1.2% below May 2022 levels, prices have trended steadily higher over the spring selling season, and are up 3.5% compared to April. This was also reflected in the MLS Home Price Index – a measure of the most typical home sold – which fell -6.9% year over year, but rose 3.2% on a monthly basis.
That buyers remain enthusiastic about their home purchasing plans despite a higher interest rate environment indicates they’ve been largely able to financially absorb rising rates, says TRREB Chief Market Analyst Jason Mercer.
“The demand for ownership housing has picked up markedly in recent months. Many homebuyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market,” he stated. “In addition, strong rent growth and record population growth on the back of immigration has also supported increased home sales. The supply of listings hasn't kept up with sales, so we have seen upward pressure on selling prices during the spring.”
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Sales were up across all home types, with detached houses leading in terms of volume, with 4,049 properties sold (+21.8%), and also posting a year-over-year price increase, inching up by 1% to an average of $1,556,566. Prices were also up slightly for townhouses (+3% to $1,003,152) while remaining below last year’s levels for the semi-detached and condo segments.
Demand heats back up in the 905
Buyer activity is booming once again in the markets outside of Toronto city limits; transactions were up 25.5% year over year in the 905-area neighbourhoods, with a total of 5,727 properties sold. As new listings contracted by -19.8%, that’s put a strong boil under prices, which have nearly flattened out on an annual basis; at an average of $1,195,573, that’s just $1,783 less per home than last year (-0.14%).
City home buyers were also out in droves, with a total of 3,285 sales within the “416”, marking a 23.3% increase from last year. The average Toronto home price has now hit $1,197,021, just -2.8% shy of where it was last May. Like the rest of the region, Toronto buyers are being challenged by a dearth of new supply, with listings dipping -16.6% compared to last year, with 1,184 homes brought to market over the course of the month.
Combatting the real estate supply-and-demand imbalance in the region will be a top focus for Toronto’s incoming new mayor; a recent poll conducted by Ipsos for TRREB found 54% of respondents gave Toronto’s current City Council a poor grade on housing affordability, with 89% saying the next mayor must make it a top priority.
“Despite the fact that we have seen positive policy direction over the last couple of years, governments have been failing on the housing supply front for some time. Recent polling from Ipsos found that City of Toronto residents gave Council a failing grade on housing affordability and pointed to lack of supply as the major issue,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
“This issue is not unique to Toronto. It persists throughout the Greater Golden Horseshoe. If we don't quickly see housing supply catch up to population growth, the economic development of our region will be hampered as people and businesses look elsewhere to live and invest.”