The average selling price of a Toronto home reduced in March, and it’s different from a trend that sees the market heating up when spring is coming. According to the Toronto Regional Real Estate Board, the average selling price across all property types was $1.299 million last month. It was $1.334 million in February. Interestingly, the prices are still up by 18.5% compared to March 2021, when the average selling price was below $1.1 million.
The Timing
The timing of the
release of the data by the board is interesting. It was shared shortly after the
Bank of Canada hiked interest rates
by 25 basis points last month. It also warned that additional rate hikes are
likely because the focus is on bringing inflation down from 5.7%, which is a
30-year high. When that happens, it will increase the cost of borrowing. It
would eventually impact the broader real estate market.
TRREB Chief Market Analyst Jason Mercer said, “Competition
between homebuyers in the GTA remains very strong in most neighborhoods and
market segments. However, we did experience more balance in the first quarter
of 2022 compared to last year. If this trend continues, it is possible that the
pace of price growth could moderate as we move through the year.”
The home prices
across the GTA rose considerably during the pandemic due to factors like
near-zero interest rates and the desire of people to have more space due to the work from home trend.
New Listings
The number of
new listings rose to 20,038 in March from 14,147 in February. Active listings
rose by about 3,000 more than last month to reach 10,167. In March, the number
of homes that came into the market was down by around 12% YOY, and active
listings fell by 4%.
The Shift
The President of
Toronto’s Realosophy brokerage, John Pasalis, tweeted on Monday evening that
the slight shift in the market, reported by the realtors for the last two or
three weeks, is tricky, “especially (for) people balancing buying and selling
at the same time.” He also wrote, “People need to constantly revisit the
buy-versus-sell-first question and to make sure their expectations are
realistic.”
The Second
Best First Quarter for Sales
According to the
Real Estate Board, it was the second-best first quarter for sales. Mercer
highlighted that rising interest rates might have slowed the sales in late 2021
and early 2022. Condos are selling more than they did during the first part of
the pandemic.
Expert
Opinion
Mercer said, “The
proportion of sales attributed to condominium apartments was higher this year
compared to last, and condos generally sell at a lower price point. So that
sort of change of mix also influences the average selling price.”
He also said, “You
should see listings edging up from February to March and then from March to
April. April is usually your strongest month in terms of new listings.
Consequently, you see May is generally your strongest month in terms of sales —
just that April listings turned into May sales.”
Mercer also said
that it was too soon for the market to be impacted by the policies announced by
the Ontario government last week. Examples of such policies include a hike in
the non-resident speculation tax.
Sources:
https://toronto.ctvnews.ca/average-toronto-home-sale-price-fell-slightly-in-march-2022-still-up-18-5-per-cent-for-the-year-1.5848532
https://www.cp24.com/news/toronto-home-sale-price-fell-slightly-in-march-2022-trreb-1.5848493?cache=
https://www.thestar.com/news/gta/2022/04/05/home-prices-moderate-month-over-month-in-march-but-remain-18-per-cent-higher-than-last-year.html