Home sales in the Greater Toronto Area (GTA) are continuing their climb as the level of listings is unable to recover from its backslide, creating increasingly tight market conditions.
New data released by the Toronto Regional Real Estate Board (TRREB) on Thursday revealed a total of 7,481 sales for the month of June, which is up 16.5% from one year ago, although down somewhat from the 9,012 sales seen in May. A drop off is normal in the typically less active summer months, but TRREB President Paul Baron argues that home sales were further hampered by "uncertainty surrounding the Bank of Canada’s outlook on inflation and interest rates."
“Furthermore, a persistent lack of inventory likely sidelined some willing buyers because they couldn't find a home meeting their needs," Baron said. "Simply put, you can't buy what is not available."
Of the homes that did sell in June, the lion's share came in the form of detached houses, accounting for 3,377 of the month's transactions. They were followed by condo apartments (2,122), townhouses (1,233), and semi-detached homes (678). Every housing type saw an increase in sales compared to the same time last year, but condo apartments handily took the lead with a 27.2% jump.
Listings on the other hand, of which there were 15,865 in June, were down 3% on an annual basis, making clear that supply is far from keeping up with the jump in demand. A possible bright spot -- although not cause for celebration yet -- is the small increase in listings from May, when there were 15,194.
TRREB CEO John DiMichele stresses the importance of bringing new housing on the market, not only to make up for the current deficit but to keep up with the GTA's record population growth.
"Leaders at all levels of government, including the new mayor-elect of Toronto, have committed to rectifying the housing supply crisis," DiMichele said. "We need to see these commitments coming to fruition immediately, or we will continue to fall further behind each month."
But with no immediate fixes for recent market conditions, prices were once again up in June. The average selling price hit $1,182,120, marking a year-over-year increase of 3.2%. This is relatively on par with May's average price of $1,196,101. When seasonally adjusted, however, June's average price saw an increase compared to May.
Another measure, the MLS HPI Composite benchmark price, was down 1.9% year over year, but it saw the lowest annual rate of decline in 2023 so far. When seasonally adjusted, it too showed a month-over-month price increase.
Beyond tight market conditions and rising interest rates, DiMichele says that high prices, and subsequently, affordability, are continuing to take hits from the taxes and fees associated with home sales and construction.
"Going forward, we need to look at all of the factors influencing the household balance sheet and people’s ability to house themselves," he says.
