The month of May saw a dip in sales on a monthly and annual basis as buyers and sellers alike eagerly awaited Bank of Canada’s announcement, in which it reported its new rate of 1.5%, an increase of 50 basis points.
Although there was a decrease in sales overall, active listings at the end of the month were up on a month-over-month and annual basis, signaling more balanced market conditions for buyers. The number of active listings increased by 26 per cent on a year-over-year basis. ”Bank of Canada rate hikes, including the 50-basis point hike on June 1, are impacting home buyers in the short term. There is now a psychological aspect where potential buyers are waiting for a bottom in price. This will likely continue through the summer” said TRREB President Kevin Crigger. “However, as home buyers adjust to higher borrowing costs, housing demand will be supported by extremely low unemployment, high job vacancies, rising incomes and record immigration,” he continued.
This means that we are still expecting to see a strong market this summer with more room for buyers to negotiate sale prices and include conditions on offers. Something that was almost unheard of this time last year.
Average Selling Price Settling and Detached and Condo Apartments are in High Demand
Market conditions are still strong and the average selling price in May was $1,212,806, an annual growth rate of 9.4 per cent. However, we are seeing prices stabilize from the month-over-month growth rates in Q1. Prices in Toronto and the GTA are down versus April once again by -3.3%. Some key markets that saw large price drops month-over-month include: Oakville, which saw an average price drop of -11.6%; Orangeville, which decreased -8% month-over-month; and Oshawa, down by 10% from April to May .
With low unemployment and immigration getting back to pre-pandemic levels, demand is still high. In Toronto and the GTA, the demand for detached homes and condo apartments are leading the pack. The GTA saw 2,552 sales of detached homes with an average price of $1,432,951. This is up 7.8% year-over-year, but down -6.1% month-over-month. In Toronto, with people heading back to offices and the downtown core, it’s no surprise that condo apartments are the most in demand, with 1,264 sales last month. The average price of a condo in the ‘416’ hit $793,124. While this is an increase of 10.5% year-over-year; the price has come down by -3.4% since April. Townhouses were the third most in demand home type, with a combined 1,251 total sales in Toronto and the GTA and an average price of $977,194.
Whether you’re buying, selling, or both, the more balanced market conditions indicate that we can expect a likely slower but more fair market this summer versus 2021. Sellers should be prepared to negotiate with buyers and work with their real estate agent to properly position their home in today’s climate. More balance means more buyers may be able to enter the market but they will come with conditions to their agreements. Conditions that this red-hot GTA market hasn’t seen in over two years!