The red-hot housing market in the Greater Toronto Area (GTA) is showing more signs of cooling, with the latest monthly report from the Toronto Regional Real Estate Board (TRREB) showing that home sales and selling prices both saw month-over-month declines during the month of June.
While June housing sales increased year-over-year by 28.5%, the market conditions this time last year were profoundly different than the boom that emerged in late 2020. The strongest year-over-year sales growth was noted in the condominium apartment segment, both in the City of Toronto itself and some of its surrounding suburbs. For a more current comparison, the 11,106 home sales recorded in June, 2021 were well below the 15,652 sales recorded when this mini-boom was at its peak in March, 2021, though still well above June, 2020's 8,645 sales.
“We have seen market activity transition from a record pace to a robust pace over the last three months. While this could provide some relief for home buyers in the near term, a resumption of population growth based on immigration is only months away. While the primary focus of policymakers has been artificially curbing demand, the only long-term solution to affordability is increasing supply to accommodate perpetual housing needs in a growing region,” reads a statement issued by TRREB President Kevin Crigger.
Year-over-year sales outpaced new listings across all major market segments, further tightening supply and adding to an already competitive market. Year-over-year selling prices jumped 17% to $1,089,536, though it is important to note that this metric uses pandemic lows from June, 2020. When looking through the month-over-month lens, June, 2021's average selling price represents a slight drop from the all-time high of $1,108,453 recorded the month before.
With plenty of new data to work with, TRREB is revising its initial forecast for 2021 released in February to reflect the quickly-changing conditions of the GTA housing market. The February forecast projected 105,000 transactions with an average selling price of $1,025,000. Factoring in favourable conditions and trends through the first half of the year, TRREB now expects 115,000 transactions and a projected average selling price of $1,070,000 through 2021.
“Home sales soared at the start of the year, with a huge sales record in the first quarter. However, the record pace of sales has run its course as pent-up demand has increasingly been satisfied in the absence of normal population growth. With this said, a persistent lack of inventory across most segments of the market will keep competition between buyers strong, resulting in an average selling price well above $1 million through the end of 2021,” reads a statement by TRREB Chief Market Analyst Jason Mercer.
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