Hopeful Toronto homeowners have spent the last two years deeply entrenched in a seller’s market. But the tides may be about to change in their favour.
Statistics released by the Canadian Real Estate Association (CREA) show that the sales-to-new listings ratio dropped from 76% to 66% in April—its lowest level since June 2020. The ratio is key to determining who wields more power in the real estate market.
“This reading is right on the border between what would constitute a seller’s and a balanced market,” the CREA said.
In a data snapshot released earlier this week, BMO Chief Economist Douglas Porter said that the ratio dropped to just 45% in the GTA, which is “getting into buyer’s market terrain.”
The average over the last 12 months has been over 70%, which Porter notes is “firmly” in favour of the seller.
“What the ratio is now telling us is that prices are about to go from 20%+ gains to a sudden stall,” he said. “And that’s assuming the sales/listings ratio doesn’t fall further in coming months.”
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According to the CREA, national home sales declined by 12.6% between March and April. The drop puts monthly sales activity at the lowest level since the summer of 2020, and 25.7% below the record set in April 2021.
“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, Chair of CREA.
“For buyers, this slowdown could mean more time to consider options in the market.”