After a year of soaring prices, unprecedented demand, and cutthroat competition, the GTA housing market is finally showing the first signs of cooling off.
A new report from the Toronto Regional Real Estate Board (TRREB) found that although home sales last month were strong, setting a new record for April, there was actually a decline in numbers from the previous month.
In the GTA, there were 13,663 home sales reported in April, which was a 12.7% decline from March sales. The number of new listings also fell, going down by 8.4% compared to March.
“It makes sense that we had a pullback in market activity compared to March,” said TRREB President Lisa Patel. “We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth.”
The reason behind this drop-off could be that many of the eager potential buyers have either already bought a home or are no longer looking.
“We may be starting to exhaust the pool of potential buyers within the existing GTA population,” Patel said. “Over the long term, sustained growth in sales requires sustained growth in population.”
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Despite the noticeable cooling in the housing market, the average selling price of a home in the GTA remained relatively similar month-over-month, coming in at $1,090,992 compared to March’s $1,097,565. But TRREB Chief Market Analyst Jason Mercer says he sees prices continuing to grow.
“Low borrowing costs during COVID-19 clearly had an impact on the demand for and price of ownership housing,” Mercer said. “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.”
Bringing the prices down, says TRREB CEO John DiMichele, hinges on substantially more housing supply coming on the market.
“With the federal, provincial, and municipal governments on the same page, we need to see a coordinated and collaborative effort to streamline the development approvals process to pave the way for more ownership and rental housing,” he said.