The Toronto Regional Real Estate Board (TRREB) published their latest monthly Market Watch report yesterday, highlighting the improvements in the GTA housing market - through a lens of sales that is. Looking at the supply of housing overall, the demand for new homes is still failing to be met, and it’s causing the competition between buyers to heat up.
According to data from TRREB’s Multiple Listings Service (MLS), GTA realtors reported a total of 9,012 sales last month. Compared to May of 2022, which saw the sale of 7,226 homes, the market has seen a boost in sales by a margin of just under 25%.
“The demand for ownership housing has picked up markedly in recent months,” said TRREB Chief Market Analyst Jason Mercer. “Many homebuyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market. In addition, strong rent growth and record population growth on the back of immigration has also supported increased home sales.”
Unfortunately, the increasing rate of sales is not a byproduct of a deepening supply of housing, but rather, an immense demand. Looking at the MLS’s figures on the number of new listings that entered the market in May, the total of 15,194 represents a decline of nearly 19% compared to May 2022’s mark of 18,687.
The impact of this imbalance between sales and listings is expressed most prominently in the average value of GTA homes. With more buyers competing for less listings, prices have continued to climb, peaking last month at nearly $1.2 million. While prices had seen a relatively notable decline earlier in the year due to the high cost of borrowing, the forces of demand have driven them back up to levels similar to what we were seeing around this time last year.
“The high cost of housing, brought about by short supply and high borrowing costs, is part of the broader increases in the cost of living,” said TRREB CEO John DiMichele. “TRREB believes households will have little patience for higher taxes, including unreasonable property tax hikes and increases to prohibitive upfront land transfer taxes.” With potential tax hikes touted by a number of Mayoral candidates to address funding gaps in city services, the conversation is likely to become amplified in the weeks ahead of the election.
Also of note is an observation from TRREB President Paul Baron, who pointed out that “recent polling from Ipsos found that City of Toronto residents gave Council a failing grade on housing affordability and pointed to lack of supply as the major issue. If we don't quickly see housing supply catch up to population growth,” he added, “the economic development of our region will be hampered as people and businesses look elsewhere to live and invest.”
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