The spring market is typically the peak season for real estate, but May home sales remained sluggish as homeowners in the Greater Toronto Area awaited the anticipated mortgage rate cut, which was announced by the Bank of Canada on June 5.
“Recent polling from Ipsos indicates that home buyers are waiting for clear signs of declining mortgage rates. As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers. This will open up much needed space in a relatively tight rental market,” stated Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.
Increased Listings Give Buyers an Edge as GTA Home Prices Dip Slightly
With 83% more active listings compared to last year, buyers now have more options and greater negotiating power on prices, with a whopping 21,760 listings in 2024 compared to 11,869 in 2023. This substantial increase in available properties may make it more challenging for sellers to get their listings noticed. However, the average selling price in May 2024 was $1,165,691, a slight decrease of 2.5% compared to the May 2023 average of $1,195,409. With inventory increasing and home prices decreasing slightly or remaining flat, prospective sellers need to price their homes according to market conditions to ensure their property gets noticed.
“While interest rates remained high in May, home buyers did continue to benefit from slightly lower selling prices compared to last year. We have seen selling prices adjust to mitigate the impact of higher mortgage rates. Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases,” said TRREB Chief Market Analyst Jason Mercer.
- Related: Soaring Canadian Interest Rates and Their Ripple Effect: How Home Prices Have Changed Since 2022
Most of the home sales in the 416 area have been condo apartments, with 1,297 sales. The $500,000 to $599,000 and $600,000 to $699,000 price ranges are the most active for these condo sales. In the 905 area, detached homes are the most popular, with 2,387 sales in May compared to 851 in the 416 area. However, there’s been a 21.9% total decrease in sales in the 905 area year-over-year. Overall, condo apartments and townhouses have seen drops of 24.1% and 24.3%, while semi-detached homes have also decreased by 21.3%.
Peel, York, and Durham Lead Home Sales Surge Outside Toronto
Looking at home sales outside the city of Toronto, the Peel, York, and Durham regions are leading the way. Year-to-date, Peel region recorded 5,369 sales with an average price of $1,062,880, York region had 5,521 sales with an average price of $1,314,749, and Durham region saw 3,983 sales with an average price of $933,565.
Looking closer at May data, Peel region reported 576 sales, York region had 626, and Durham region saw 597. Comparatively, Toronto had 851 sales during the same period. For the month of May, the average home prices were as follows: Peel Region had an average price of $1,362,473, York Region’s average price was $1,692,777, and Durham Region’s average price was $1,059,756.
Ultimately, the significant number of transactions and price fluctuations in May compared to the year-to-date figures highlight the dynamic and competitive nature of the housing market in these high-demand regions.
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