As the cooler weather set in, home sales in the Greater Toronto Area saw yet another month of decline in November, according to the latest data from the Toronto Regional Real Estate Board (TRREB).
A total of 4,236 home sales were reported in the GTA last month, which not only marked an 8.8% drop from October's numbers, but a 6% decline compared to November 2022. When adjusted for seasonality, as activity tends to drop off in the winter, sale numbers actually saw slight improvement from October, TRREB said.
High borrowing costs, uncertain economic conditions, and a general lack of affordability have strangled home sales this year, pushing many would-be buyers to wait on the sidelines until purchasing makes more financial sense.
"Inflation and elevated borrowing costs have taken their toll on affordability," said TRREB President Paul Baron. "This has been no more apparent than in the interest rate-sensitive housing market."
As sales slid, so too did prices, with the average GTA home price sinking 3.9% month over month to a new average of $1,082,179. This is on par with the average price seen in November 2022 (up just 0.3%), meaning many homes have seen no additional value gains over the past year.
In Toronto, Ontario's busiest market, home prices fell 6.8% month over month, as sales took a -12.5% blow. The biggest change was seen amongst Toronto's detached homes, where sales fell 21.3% and the average price sank by over $100K to $1,617,918 (from $1,718,440).
“Home prices have adjusted from their peak in response to higher borrowing costs," said TRREB Chief Market Analyst Jason Mercer. "This has provided some relief for buyers, from an affordability perspective. As mortgage rates trend lower next year and the population continues to grow at a record pace, expect demand to increase relative to supply. This will eventually lead to renewed growth in home prices."
Despite the overall drop-off, some areas saw little change in demand month over month. Halton Region, for one, saw its number of sales remain virtually unchanged (up by just three) white its average price rose several thousand dollars from October to $1,208,950. Oakville in particular saw its average price rise from $1,395,752 to $1,572,012 — a nearly $200K gain.
For those who are in a position to make a home purchase now, there are noticeably more homes to choose from compared to last year. Inventory levels saw another nice boost in November, with 10,545 new listings coming on the market, bringing the number of active listings up to 16,759 — a 40.7% increase from November 2022.
But with demand amongst would-be homeowners bubbling below the surface, TRREB CEO John DiMichele is urging governments to take more action, anticipating a growing housing demand "for years to come."
"We have seen some productive policy decisions recently that should help with housing affordability, including allowing existing insured mortgage holders to switch lenders without the stress test," DiMicehele said. "Additionally, in the interest of household and economic stability, we continue to call on the Office of the Superintendent of Financial Institutions to apply the same approach to uninsured mortgages. It also goes without saying that further policy work is required to bring more supply online."