In June 2023, home sales and the average selling price in the Greater Toronto Area (GTA) remained higher compared to the previous year. However, when considering seasonal adjustments, sales showed a decline compared to the previous month. On the other hand, the seasonally adjusted average selling price and the MLS® Home Price Index (HPI) Composite benchmark increased compared to the previous month.
According to Paul Baron, President of the Toronto Regional Real Estate Board (TRREB), the demand for owning a home is stronger than last year, despite the increased costs of borrowing. However, uncertainty surrounding the Bank of Canada's stance on inflation and interest rates affected home sales last month. Additionally, the persistent lack of available properties likely deterred some potential buyers who couldn't find a home that suited their needs. Essentially, if a home isn't available, it cannot be purchased.
In June 2023, GTA REALTORS® recorded a total of 7,481 sales through the MLS® System of TRREB, marking a 16.5 percent increase compared to June 2022. However, the number of listings decreased by three percent during the same period.
The rise in sales compared to the previous year, along with the decline in new listings, indicates that market conditions in June were more competitive than during the same period last year. The average selling price experienced a 3.2 percent increase, reaching $1,182,120. However, the MLS® HPI Composite benchmark still showed a 1.9 percent decrease compared to the previous year, marking the slowest annual rate of decline in 2023. On a month-over-month basis, both the seasonally adjusted average price and the MLS® HPI Composite benchmark demonstrated an increase.
“A resilient economy, tight labour market and record population growth kept home sales well above last year’s lows. Looking forward, the Bank of Canada’s interest rate decision this month and its guidance on inflation and borrowing costs for the remainder of 2023 will help us understand how much sales and price will recover beyond current levels,” said TRREB Chief Market Analyst Jason Mercer.
“GTA municipalities continue to lag in bringing new housing online at a pace sufficient to make up for the current deficit and keep up with record population growth. Leaders at all levels of government, including the new mayor-elect of Toronto, have committed to rectifying the housing supply crisis. We need to see these commitments coming to fruition immediately, or we will continue to fall further behind each month,” stressed TRREB CEO John DiMichele. “In addition to the impact of the listing shortage, housing affordability is also hampered on an ongoing basis by taxation and fees associated with home sales and construction as well as the general level of taxation impacting households today. Going forward, we need to look at all of the factors influencing the household balance sheet and people’s ability to house themselves,” continued DiMichele.
As professionals in the industry, it is crucial for us to adapt to these changing circumstances and strategize accordingly. We must proactively assess the market conditions, provide accurate and up-to-date information to our clients, and offer suitable guidance to navigate these new challenges effectively.
By staying informed about the latest developments, tracking interest rate trends, and understanding buyer preferences, we can position ourselves to better assist both buyers and sellers in achieving their real estate goals. It is vital to offer thorough market analyses, comprehensive advice, and personalized solutions to address the concerns that our clients may have.
Source: Market Watch
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