Greater Toronto Area (GTA) housing market conditions continued to evolve in response to higher borrowing costs. Similar to April results, May 2022 sales were down on a monthly and annual basis. Conversely, active listings at the end of May were up on a month-over-month and year-over-year basis. More balanced market conditions have provided buyers with more negotiating power. As a result, while benchmark and average home prices were up substantially compared to last year, selling prices trended lower on a month-over-month basis.
“Bank of Canada rate hikes, including the 50-basis point hike on June 1, are impacting home buyers in the short term. There is now a psychological aspect where potential buyers are waiting for a bottom in price. This will likely continue through the summer. However, as home buyers adjust to higher borrowing costs, housing demand will be supported by extremely low unemployment, high job vacancies, rising incomes and record immigration,” said TRREB President Kevin Crigger.
GTA REALTORS® reported 7,283 sales through TRREB’s MLS® System in May 2022 – down 38.8 per cent compared to May 2021 and down nine per cent compared to April 2022. The number of new May listings was similar to last year’s level and edged up on a month-over-month basis. With sales down and new listings trend flat to slightly up, the number of active listings was up on a year-over- year basis by 26 per cent.
Market conditions remained tight enough to support an overall average selling price of $1,212,806 for May 2022, representing an annual growth rate of 9.4 per cent. The MLS® Home Price Index Composite Benchmark was also up on a year-over-year basis by 23.9 per cent. On a month-over- month basis, both price metrics were lower, reflecting more balanced market conditions.
“Price trends observed over the past three months – both in terms of moderating annual growth rates and the recent month-over-month dips – are in line with TRREB’s forecast for 2022. After a strong start to the year, the current rate tightening cycle has changed market dynamics, with many potential home buyers putting their purchase on hold. This has led to more balance in the market, providing buyers with more negotiating power,” said TRREB Chief Market Analyst Jason Mercer.
CONDO MARKET REPORT
Continuing to be seller’s market for the condominium sector with the average selling price increased by 10 percent from May 2021 over May 2022.
Greater Toronto Area (GTA) REALTORS® reported 1,263 sales through TRREB’s MLS® System in May 2022 – a decrease of 32.5 percent compared to 1,872 sales from May 2021.
Even though the sales have decreased with sales prices increasing it is proving to be a lucrative market for first time home buyers to finally get their foot in the door. However, this market isn’t only proving to be for first time home buyers, with the GTA population set to grow at or near record levels in the next couple of years this is also suggesting to be a great opportunity for investors to grow their real estate portfolio with the purchase of a condo.