This fall, the Greater Toronto Area (GTA) housing market is off to a slow start, primarily driven by a lack of supply. According to the Toronto Regional Real Estate Board’s (TRREB) most recent data, prospective buyers and sellers are still adjusting to the higher borrowing costs announced in September. With another Bank of Canada announcement expected in October, people are still feeling hesitancy about what’s to come next. Here’s what you need to know if you’re considering getting into the market.
Sellers: Fewer Listings May Mean More Competition
The number of new listings has dropped by 16.7% year-over-year to 11,237. This marked the lowest number of new listings reported for the month of September since 2002. In its report, TRREB mentions that the number of new homes in the GTA has increased significantly in the past 20 years, but the supply is not keeping up with the demand. Now with fewer people selling, the market conditions continue to tighten with a potential swing back to seller’s conditions which marked most of the pandemic.
The reality is that many of those currently in the market are motivated buyers and sellers that need to move to a new location, upsize, or downsize. “With fewer listings and more motivated buyers entering the market, we may see more competition in the coming months if the supply remains tight,” explains Claudio Castro, Managing Broker at Zoocasa.
Condo Apartments are Still Leading the Pack in Toronto Sales
Condo apartments have been the most sold property each month this year in Toronto. “In March, we saw a spike in sales of detached homes in Toronto, but the 1,098 sales were still less than the 2,141 peak in condo apartment sales,” said Castro. In September, there were 875 sales of condo apartments in Toronto, detached homes were the second most sold property type at 497 sales, and semi-detached and townhouses sales each came in under 200 sales.
Month-over-month, the average price of condos has grown by 4.4% and is currently $769,058. “Condo sales in Toronto have led the pack all year, and with prices up 3.4% versus September 2021, their current value is still holding better than other property types”.
Buyers in the 905 are Taking Advantage of the Detached Homes Price Dips
Although demand for detached homes in Toronto has cooled, in the wider GTA it remains the most in-demand property type. In September, there were 1,837 detached home sales and the average price was $1,310,639, down 9.5% year-over-year. As the demand for detached homes in the GTA increases and prices come down, prospective buyers may experience more competition, especially as some buyers are expediting their home purchase before the next interest rate announcement.
This drop in GTA detached home prices is reflected in the MLS® Home Price Index (HPI) Composite benchmark, which was down by 4.3% over the same period of time, to $1,086,762.
“Hovering just below $1.1 million, the average selling price may have found some support during the last couple months of summer. With new listings down quite substantially year-over-year and well-below historic norms, some home buyers are quite possibly experiencing tighter market conditions in some GTA neighbourhoods. October generally represents the peak of the fall market, so it will be important to see where price trends head over the next month,” said TRREB Chief Market Analyst Jason Mercer.
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