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Prices are up 4% and sales are up 9% mom
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Released May 3, 2023 • Last updated May 3, 2023 • 3 minutes reading time
Buyers are returning to the Toronto real estate market, but supply is still low. Photo by Tyler Anderson/National Post
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Toronto home prices posted a third straight monthly increase in April as the market continued to show signs of recovery amid tight supply conditions.
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According to the Toronto Regional Real Estate Board, the median price for a home in the greater Toronto area rose four percent in April from the previous month to $1.153 million. Still, prices remain below the April 2022 average of $1.25 million. The number of homes that changed hands was also up about nine percent month-on-month to 7,531, but remained slightly more than year-over-year five percent back.
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The aggressive pace of rate hikes has held off many prospective buyers, but market data for spring — usually a busy time for home buyers — so far shows some potential buyers are coming back into play at a time when supply is still low and fewer offers are emerging the market.
In an interview, TRREB chief market analyst Jason Mercer said many of the homes that initially put their buying decision on hold have recalibrated and adjusted to the current higher interest rates, either by targeting other types of homes in different parts of the greater Toronto area have or a combination of both when they come back on the market.
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“Certainly I expect an increase in demand and an increase in sales during the spring. I also expect market conditions to tighten (because) we really haven’t seen much movement on the stock market front,” Mercer said.
Buyers returning to the market will find a relatively limited supply of available homes, he said, likely leading to increased competition and further upward pressure on prices.
Penelope Graham, content director at mortgage website Ratehub.ca, said better mortgage rates may have explained some of the increased demand in April.
“April numbers show that buyers are adjusting to the tougher credit environment and some may have been spurred into action by slightly lower fixed rates last month,” Graham said.
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Single-family home sales were up significantly from March, with 3,448 units sold at an average price of $1.403 million, but volumes were slightly down year-on-year. Sales of condominiums increased only slightly compared to the previous month with 2,160 units sold and were thus almost at the previous year’s level.
In a press release, TRREB President Paul Baron said the supply issue required a policy response at all levels of government. Many market watchers argue that this has not been addressed, even though the federal government plans to take in 1.4 million immigrants over a three-year period.
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Lauren Haw, chief executive of Toronto-based online real estate listings company Zoocasa, told the Financial Post’s Larysa Harapyn last month that the federal government’s 2023 budget is failing to fill the housing supply gap. She added that in early April she expected more homebuyers to return to the market, despite Toronto posting double-digit declines from its pandemic highs due to the housing downturn.
“I think we’re going to see some investor sellers come into the market because they have to,” Haw said during an April 8 interview. “These things – the increasing supply combined with these falling mortgage rates – I think we’re going to see a lot of buyers step off the sidelines (and get a sense of confidence in the market). So I’m forecasting a pretty busy spring market.”
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