There are signs that the Greater Toronto Area’s housing market is cooling, and if that is indeed the case, it’s the calm before the storm.
“I like to think this will be a trend that continues for the next month or two because it would be my preference to see some stability,” Bradley Watson, a broker with Watson Estates in Toronto, told CREW. “For whatever bubble exists in our market, I’d like to see some of the air come out of it because people who took advantage of working from home and fled the city will be returning, and when immigrants come back it’s bound to boost prices in Toronto. So, in the meantime, I’d like to see a rest period for the market.”
Data from the Toronto Regional Real Estate Board (TRREB) showed there were 13,663 sales in the GTA in April, down by 12.7% from a month prior, essentially flattening the selling price during that period, and 36.6% above the 10-year average of 10,000 transactions for the month between 2010 and 2019.
Unsurprisingly, the number of sales last month was more than four times higher than they were in April 2020, the first full month of COVID-19 pandemic-induced lockdowns.
New listings declined by 8.4% to 20,825 in April from March, but they were more than three times the number of new listings a year ago.
“It makes sense that we had a pullback in market activity compared to March,” Lisa Patel, TRREB’s president, said in a statement. “We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth. We may be starting to exhaust the pool of potential buyers within the existing GTA population. Over the long term, sustained growth in sales requires sustained growth in population.”
Canada is supposed to settle 401,000 immigrants this year, however, that appears unlikely because of the ongoing pandemic. Still, in light of Immigration, Refugees and Citizenship Canada’s plan to welcome 1.2 million new Canadians through 2023, 60% of whom will belong to the “economic class,” which includes skilled workers, investors and entrepreneurs, the GTA’s housing market is sure to catch fire again soon.
“We need some breathing room, and I’m hoping this is the breathing room we didn’t get during the winter months because another rollercoaster is coming,” said Watson. “Months of inventory are still very low; the condo market dropped from five to one month, and freehold is still only one month. This is an extremely heightened seller’s market—in fact we’re deep in a seller’s market, which is why I’d like to see this trend continue for the next couple of months so that we can get our footing again.”
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