The Greater Toronto Area (GTA) housing market continued to tighten in April 2023. On a year-over-year basis, sales edged lower compared to April 2022, but new listings were down by more than one-third. Fewer listings relative to sales meant there was more competition between buyers, supporting an improvement in selling prices since the beginning of this year.
“In line with TRREB’s outlook and recent consumer polling results, we are seeing a gradual improvement in sales and average selling price. Many buyers have come to terms with higher borrowing costs and are taking advantage of lower selling prices compared to this time last year. The issue moving forward will not be the
demand for ownership housing, but rather the ability to meet this demand with adequate supply. This is a policy issue that requires a sustained effort from all levels of government,” said TRREB President Paul Baron.
GTA REALTORS® reported 7,531 sales through TRREB’s MLS® System in April 2023 – down by 5.2 percent compared to April 2022. In comparison to March 2023, sales increased on an actual and seasonally adjusted basis. On a year-over-year basis, new listings were down by 38.3 percent in April 2023.
The MLS® Home Price Index (HPI) Composite Benchmark was down by 12.1 percent year-over-year in April 2023. Compared to March, the benchmark price was up on an actual and seasonally adjusted basis. The average selling price in the GTA was $1,153,269 in April 2023 – down 7.8 percent compared to $1,250,704 in April 2022. The average selling price also increased compared to March, both on an actual and seasonally adjusted basis.
“As demand for ownership housing has picked up relative to supply, we are seeing renewed upward pressure on home prices. For a short period of time, higher borrowing costs trumped the impact of the constrained housing supply in the GTA. Renewed competition between buyers is once again shining the spotlight on the persistent lack of listings and resulting impact on affordability,” said TRREB Chief Market Analyst Jason Mercer.
“Lack of affordability in the GTA ownership and rental housing markets has been well-documented. On top of this, households faced with steep price increases for basic goods and services have had to make tough decisions to adapt. It is time for governments to make tough choices as well. On average, every dollar a household makes in the first half of the year goes to taxes. Governments need to provide more value for every tax dollar they collect and should be looking for ways to reduce tax burdens moving forward,” said TRREB CEO John DiMichele.
CONDO MARKET UPDATE
In line with the general market trends, condominium apartment sales and the average selling price were lower in the first quarter of 2023 compared to the same period in 2022. However, strong population growth, tight rental market conditions, and improved first-time buying intentions will result in renewed growth in condo sales moving forward.
There were 4,519 condominium apartment sales reported through TRREB’s MLS® System in Q1 2023 – down by 42.9 percent compared to 7,909 sales reported in Q1 2022. Over the same period, new listings were also down, but by a lesser annual rate of 19.9 percent. This means that condo buyers did experience more choice compared to the first three months of 2022.
“Higher borrowing costs caused a temporary lull in condo buying activity. However, recent Ipsos polling for TRREB suggests that first-time buying activity will pick up noticeably this year due, at least in part, to double-digit rent increases over the past two years. Despite increased interest rates, mortgage payments on a condo are now closer to the cost of renting for a lot of potential buyers. In addition, homeownership has the added benefits of equity growth and asset appreciation over the long term,” said TRREB President Paul Baron.
The average price for condominium apartments sold in Q1 2023 was $700,566 – down 11.4 percent compared to the average of $790,418 in Q1 2022. Approximately two-thirds of GTA condo sales took place in the City of Toronto. The average selling price in Toronto was $726,664 in Q1 2023 – down by 10.3 percent compared to the same period a year earlier.
“Housing market conditions have been tightening up in the GTA. Home sales and selling prices are expected to improve as we move through 2023. Based on the expectation that first-time buying activity will increase this year, look for the condominium apartment segment to be one of the recovery leaders in terms of sales and price growth,” said TRREB Chief Market Analyst Jason Mercer.