August has a reputation for being slower in real estate, as buyers and sellers take a break from their house hunt to enjoy the last of summer. In the GTA, this year was no different, as sales continued to slow from their high in March – but, with an extremely low number of listings, buyers who were looking to buy last month still faced tight competition.
The August numbers released from the Toronto Regional Real Estate Board (TRREB) reveal a total of 8,596 homes changing hands in the GTA last month, making it this year’s second-slowest month for real estate, after January. These numbers are down 20% from last year, and 8% from last month.
The average price grew to $1,070,911, which is up 13% from last year. Despite the slowing sales, last month was still the third strongest August on record. This tells us that although the sales are down from this year’s record-breaking high, Canadians still had a stronger-than-usual demand for real estate this summer.
Related read: Will the GTA Housing Market Recover in the Fall?
Fewer and Fewer Listings are Coming to the Market, Leaving Buyer’s with Tough Competition and Little Choice
The biggest story coming out of August’s numbers is the low number of new listings coming to the market, leading to a lack of choice for buyers and strong competition for the limited inventory on the market. Only 10,609 new listings came on the market last month, down 43% from last year and 15% from last month. Total active listings are following a similar trend, with only 8,201 on the market, down 51% from last year and 16% from last month.
Lack of inventory on the market means that buyers will have less choice in their house hunt, and will often face strong competition and bidding wars to secure their purchase. As a result of August’s tight conditions, we’re seeing the market move to strongly favour sellers. The Sold-to-New-Listings-Ratio (SNLR), a metric used to understand how balanced the market is in favor of buyers or sellers, increased to 69% last month – firmly in sellers market territory.
“Although conditions are certainly much more balanced than they were this spring, with less inventory on the market in August, we’re seeing increased competition between buyers and bidding wars for the best properties on the market” explains Zoocasa Sales Representative, Emma Pace.
“We typically see that sellers like to wait until mid-September to list their home for the fall market, so I would anticipate more listings coming to the market next month. But, this increase in inventory usually brings additional buyers who had been previously looking but weren’t able to find something suitable in the summer. So I’d anticipate, like in most fall markets, we’ll see steady competition continue.”
Home Prices are Down Over $35,000 from this Year’s Peak, but Starting to Rise Again
Buyers in June and July were happy to see small price decreases from this year’s price peak in May, where the average home in the GTA cost $1,108,453. While homes last month were still more affordable than in earlier this spring (the average price was $1,070,911 in August, $37,542 less than May) they’re starting to rise again. Comparing month-over-month, the average across all TRREB markets was up 1% between July and August.
Taking a closer look at where month-over-month price growth is happening, it’s clear that the suburbs are still a driving force. Peel and Halton both grew 3% month-over-month, and Dufferin grew 11%. The City of Toronto, on the other hand, is showing a 2% price decline from last month, with prices relatively flat (-1%) from this time last year.
Lower sales volume can often be a precursor to price future decreases, however, this isn’t always true in the fall market. A recent Zoocasa report analyzing the average market changes between July-October in the GTA over the last 11 years showed that even when sales volumes decreased between the summer and fall markets, average prices still increased.
This same report also predicted that by October, based on historical data, sales volumes would continue to decline while prices rise.
Condos are Leading in Sales in Both Toronto and the Suburbs
Just like last month, condo apartments are the only product type that’s not experiencing a year-over-year decline in sales. Looking at the GTA overall, condo sales are up 11% from last year. In the Toronto area alone, they’re up 13%. It’s clear that affordability is driving the market segment, and the end of COVID-19 lockdowns has caused the priorities of buyers to shift. Condo townhouses and condo apartments also lead in price growth in the GTA, up 2% respectively while detached grew 1% and semi-detached grew 0%.
What’s in Store for the Fall Market?
To understand what this year’s fall market might have in store, Zoocasa looked at the historical sales trends over the last 10 years to predict how prices may change from July to August. The report predicted that by October, sales volumes would decline from their July levels but pricing could rise nearly 5%.