May 18, 2024

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Toronto housing market sees spring slowdown despite increased listings

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The Toronto real estate market is experiencing a spring slowdown and appears to be firmly tilted in favour of buyers, after four consecutive months of increased sales listings. However, while the rise in inventory has helped stabilize prices, it hasn’t translated into more transactions, with sales down across the Greater Toronto Area.

According to the latest report from the Toronto Regional Real Estate Board (TRREB), new listings were up 47.2 per cent year-over-year, with 7,114 homes changing hands last month, a five per cent drop from April 2023. Meanwhile, TRREB’s Home Price Index (HPI) Composite benchmark remained relatively stable, decreasing by less than one per cent to $1,128,100 compared to last year.

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The ostensible buyers’ market may be largely attributable to a glut in condominium stock.

Royal LePage sales representative, Thomas Delespierre, explained that buyers are still facing intense competition in certain segments of the market, most notably, detached single-family homes.

“For detached homes, we’re still seeing multiple offers and bidding wars because there is not that much inventory,” Delespierre said. “But for condos, there are a lot of new buildings coming to completion and a lot more inventory to choose from.”

According to a report released Wednesday by the real estate consulting firm Urbanation, Toronto has experienced a substantial increase in new condo registrations. “Over the past four quarters, a total of 23,095 new condos were registered, a 21 per cent increase over the same period ending Q1-2023 (19,028), and the third highest four-quarter total ever recorded,” the report stated.

Still, TRREB found that condominium sales declined by 6.5 per cent year over year in April.

TRREB president Jennifer Pearce pointed to a noticeable disparity in buyer and seller behaviour evident in her organization’s latest report.

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“Listings were up markedly in April in comparison to last year and last month,” Pearce said. “Many homeowners are anticipating an increase in demand for ownership housing as we move through the spring. While sales are expected to pick up, many would-be home buyers are likely waiting for the Bank of Canada to actually begin cutting its policy rate before purchasing a home.”

TRREB’s chief market analyst Jason Mercer explained that the increased inventory has led to minimal price movement, offering buyers more negotiating power.

In April, the average price increased 0.3 per cent year over year, reaching $1,156,167. Prices for detached homes, semi-detached homes, and condominiums recorded average price increases of 1.8 per cent, 0.3 per cent, and 0.6 per cent, respectively. The average price for townhomes declined 3.7 per cent over the same period.

In the city of Toronto, average home prices rose year over year across all but one home type in April. Detached homes, semi-detached homes, and condominium prices increased by 2.2 per cent, 2.9 per cent, and two per cent, respectively. Townhomes declined 3.9 per cent.

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Mercer predicts that lower borrowing costs will tighten market conditions in the future, potentially driving price growth.

“Looking forward, the expectation is that lower borrowing costs will prompt tighter market conditions in the months to come, which will result in renewed price growth, especially as we move into 2025,” Mercer said.

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