Home sales fell again in May, but don’t get used to this

by Neil Sharma on 07 Jun 2021

Sales in the Greater Toronto Area moderated for a second straight month in May, indicating that a semblance of normalcy is beginning to return to the housing market. However, it could be short-lived.

There were 11,951 sales in the GTA last month, according to the latest data from the Toronto Regional Real Estate Board (TRREB), down from 13,650 in April and 15,646 in March, when activity peaked. The number of transactions last month was shy of the May record, which was 12,789 in 2016.

“There has been strong demand for ownership housing in all parts of the GTA for both ground-oriented home types and condominium apartments. This was fuelled by confidence in economic recovery and low borrowing costs. However, in the absence of a normal pace of population growth, we saw a pullback in sales over the past two months relative to the March peak,” said Lisa Patel, president of TRREB.

But despite buying activity decelerating in May, the average selling price still crept up by 1.1% month-over-month to reach a record $1,108,453, which TRREB’s analysis attributed to new listings decreasing to 18,586 from 20,825 in April.

There were 5,718 detached home sales in the GTA in May that averaged $1,415,698, while semi-detached sales totalled 1,233 and averaged $1,064,361. The GTA’s townhouse segment saw 2,182 transactions for which the average price was $866,349, and the condo segment of the market had 2,710 sales for an average price of $682,280.

The slight softening in purchasing activity might also suggest buyer fatigue, says mortgage broker Elan Weintraub, but he doesn’t expect that to last for long, thanks in large part to the rising rate of inoculated Torontonians.

“The COVID-19 vaccines are starting to really come out, and by fall and beyond, downtown businesses and most of Bay St. will start opening up, maybe not to the extent of before the pandemic, but bars and restaurants will start reopening and there will be more demand for real estate as people come back to the city,” said Weintraub, co-founder and director at Mortgageoutlet.ca. “Maybe not this year, but certainly early next year immigration will resume and a lot of people will want to come to Canada.”

Even with a slight reduction in transactions, prices still managed to rise and Weintraub doesn’t anticipate that stopping.

“Even though the market is still hot, the next three to 12 months are when the market will get hotter. Even though volume is down, I think that prices are going to remain strong. Those two things don’t work hand-in-hand; we will see prices continue increasing once immigration, universities, businesses and bars open up.”

Post a Comment

Most Trending News

Proposed Actions to Spur Housing and Apartment Building Construction Are a Good Start

Discover top-quality housing and apartment building construction services tailored to your needs

Read More
Condos or Houses in Calgary: Which Is the Best Deal?

If you're looking to purchase in Calgary, you generally have two choices: a house or a condo. Which is the best deal?

Read More
NUVO Condos Will Help Oakville Meet Its Ambition as a Major GTA Hub

"NUVO Condos are poised to play a pivotal role in Oakville's transformation into a major Greater Toronto Area (GTA) hub

Read More