The April numbers for the Greater Toronto Area are out, and while they show a stark contrast from last year’s activity – during what was the depths of the first lockdown – sales and price growth are up strongly from pre-pandemic levels as well.
The Toronto Regional Real Estate Board (TRREB) reports 13,665 sales occurred last month, a more-than-quadruped increase of 362.1% year over year. That has set a new record for the month of April, and is also up 51% from 2019 levels, and 36.6% over the 10-year average.
Pandemic Buying May Have Peaked
However, there is evidence that the frantic buying activity that has defined the pandemic-era market may be starting to wind down, as sales come in -12.7% below March numbers. New listings, though up triple-fold from April 2020, are also down -8.4% month over month, with 20,825 homes brought to market across the GTA. Typically the opposite is true this time of year, as sellers and buyers come off the sidelines for the busy spring market.
The average home price was also flat compared to March, though is still well elevated from a historical perspective at $1,090,992, a 33% year-over-year increase. The Home Price Index Benchmark – a measure of the value of the most commonly-sold homes – rose by 17.8% year over year, though the pace of price growth is starting to slow.
TRREB President Lisa Patel says that the factors that have driven buyers thus far during the pandemic – such as a desire to upgrade to larger housing in more affordable markets – may be starting to decline as they’re not based on market fundamentals such as population growth.
“While sales remained very strong last month, many REALTORS® noted a marked slowing in both the number of transactions and the number of new listings. It makes sense that we had a pullback in market activity compared to March,” she writes in TRREB’s April release.
“We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth. We may be starting to exhaust the pool of potential buyers within the existing GTA population. Over the long term, sustained growth in sales requires sustained growth in population.”
Home Prices to Continue Upward Trajectory
However, while the pace of price growth may be slowing, TRREB doesn’t believe it’ll change course. As the Bank of Canada has kept mortgage rates low, and as the impact of widespread vaccinations roll back lockdown measures, buyer interest will remain high, outpacing that of supply. States TRREB Chief Market Analyst Jason Mercer, “Despite a modest slowing in market activity in April compared to March, selling prices for all major home types remained very high. Low borrowing costs during COVID-19 clearly had an impact on the demand for and price of ownership housing. While the pace of price growth could moderate in the coming months, home prices will likely continue on the upward trend. Renewed population growth over the next year coupled with a persistent lack of new inventory will underpin home price appreciation.”
GTA Remains in Sellers’ Market
Overall, the sales-to-new-listings ratio for the GTA was 65% in April, indicating sellers’ market conditions. This ratio is a measure used by the Canadian Real Estate Association to determine the level of competition in the housing market by dividing the number of home sales by new listings over the month. A ratio between 40 – 60% indicates a balanced market, with a percentage above or below that threshold indicating sellers’ or buyers’ markets, respectively.
Detached houses continue to lead the market in terms of volume of homes sold and price growth: there were 6,516 transactions across the GTA (+365.1%) at an average price of $1,387,629 (+41.3%). This is hardly surprising, given buyers’ desire for properties that can accommodate lockdown requirements such as working from home, virtual school, and increased green space.
However, the condo segment experienced the largest year-over-year increase in sales – a total of 3,290 sold in the GTA, up 394.7% at an average price of $691,791 (+19.6%). This was especially concentrated in the 905 markets where sales jumped by 450.5%. This shows demand is starting to return for high-rise living, which had stumbled in the immediate months of the pandemic.
Check out the infographics below to see how sales and average prices changed by home type for TRREB and the City of Toronto in April.