The slowdown in Toronto’s housing market continued to slip away last month as home sales came in higher than they were a year ago and prices edged closer to pandemic highs.
The Toronto Regional Real Estate Board (TRREB) found May’s home sales amounted to 9,012, up 25 per cent from a year earlier and 20 per cent from April.
Jason Mercer, TRREB’s chief market analyst, took the numbers as a sign that demand for home ownership has picked up markedly in recent months, after many prospective buyers moved to the sidelines, when interest rates were hiked eight times in a rapid succession.
“Many homebuyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market,” he said, in a release.
“In addition, strong rent growth and record population growth on the back of immigration has also supported increased home sales.”
However, sellers appear to still be awaiting higher prices and have not moved to list their homes at the same pace as buyers have shifted back to the market.
Supply not keeping up with demand
The month also showed that supply is not keeping up with demand as new listings were still well below May 2022’s level.
Last month’s new listings totalled 15,194, almost 19 per cent lower than they were a year prior.
“The supply of listings hasn’t kept up with sales, so we have seen upward pressure on selling prices during the spring,” Mercer said.
The average selling price of a home hit $1,196,101 last month, about one per cent lower than it was in May 2022 but up close to four per cent from April.
The composite benchmark price was down by 6.9 per cent year-over-year in May, but up by 3.2 per cent on a seasonally-adjusted basis, when compared with April.
TRREB’s numbers showed that the average price of a townhome moved up 2.5 per cent to $1,003,152 between May 2022 and 2023, while detached homes increased by under one per cent to $1,556,566.
Semi-detached homes were down slightly from a year ago at $1,198,185, while condo prices fell by three per cent over the same period to $748,483.
The average home price seen so far this year is about $1,135,595 compared with $1,189,730 last year and $1,095,475 in 2021.
Brokers shifting to new selling strategies
Ahead of TRREB’s release, Toronto broker Cailey Heaps said she had seen an increase in prices in the city’s central core.
“With price appreciation in recent months, we have certainly closed the gap on the bottoming out of the market in late 2022 and early 2023, but overall we’re not quite back to peak prices of early 2022,” she said, in an email.
She believes the price appreciation the market saw over the previous three months is now stabilizing and brokers are shifting to new selling strategies.
“Instead of ultra-low asking prices with offer dates and hopes for bidding wars, sellers are adjusting asking prices to be more in line with expectations.”