Greater Toronto Area (GTA) home sales, new listings and home prices were up in July 2023 in comparison to July 2022. On a seasonally adjusted basis, the market experienced more balance in July compared to June, with sales trending lower while new listings were up.
“Home sales continued to be above last year’s levels in July, which suggests that many households have adjusted to higher borrowing costs. 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,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
GTA REALTORS® reported 5,250 sales through TRREB’s MLS® System in July 2023, representing a 7.8 per cent increase compared to July 2022. Over the same period, new listings were also up, but by a greater annual rate of 11.5 per cent. The MLS® Home Price Index Composite benchmark was up by 1.3 per cent yearover-year. The average selling price was also up by 4.2 per cent to $1,118,374 over the same timeframe.
On a seasonally adjusted monthly basis, the number of sales trended lower for the second straight month, whereas new listings trended upward. The seasonally adjusted average selling price edged lower while the MLS® HPI Composite benchmark edged higher.
“Uncertainty surrounding the direction of borrowing costs, jobs and the overall economy has impacted home sales over the last two months. Over the long term, the demand for ownership housing will remain strong on the back of record population growth. 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,” said TRREB Chief Market Analyst Jason Mercer.
“We continue to suffer from a misalignment in public policy as it relates to housing. 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. 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,” said TRREB CEO John DiMichele.
TRREB is reporting the third-best sales result on record for the month of August. While the market has taken its regular summer breather, it is clear that the demand for ownership housing remains strong. At the same time, the supply of listings is down. The result has been tighter market conditions and sustained competition between buyers, resulting in double-digit annual increases in selling prices.
Greater Toronto Area REALTORS® reported 8,596 sales through TRREB’s MLS® System in August 2021 – down by 19.9 per cent compared to the August 2020 record of 10,738. The condominium apartment market segment bucked the overall sales trend, with year-over-year growth in sales, continuing a marked resurgence in 2021. The number of new listings entered into the System was down year-over-year by 43 per cent.
“The fact that new listings were at the lowest level for the past decade is alarming. It is clear that the supply of homes is not keeping pace with demand, and this situation will become worse once immigration into Canada resumes. The federal parties vying for office in the upcoming federal election have all made housing supply and affordability a focal point. Working with provincial and municipal levels of government on solving supply-related issues is much more important to affordability than interfering with consumer choice during the home buying and selling offer process or revisiting demand-side policies that will at best have a short-term impact on market conditions,” said TRREB President Kevin Crigger.
The August 2021 MLS® Home Price Index Composite benchmark was up by 17.4 per cent year-over-year. The average selling price for all homes combined was up by 12.6 per cent year-over-year to $1,070,911. The strongest annual rates of price growth are still being experienced for low-rise home types. However, average condominium apartment price growth is now well-above inflation as well. On a seasonally adjusted basis, the average selling price continued to trend upward in August.
“Sales have accounted for a much higher share of new listings this year compared to last, and the story was no different in August. There has been no relief on the supply side for home buyers, in fact, competition between these buyers have increased. As we move toward 2022, expect market conditions to become tighter as population growth in the GTA starts to trend back to pre-COVID levels,” said TRREB Chief Market Analyst Jason Mercer.