Toronto’s Housing Market Tightens as Sales Rise and Prices Edge Up in April

Toronto’s housing market continued to tighten in April, with prices increasing by four per cent from March and sales inching closer to the levels seen last April, according to data released by the Toronto Regional Real Estate Board. While the average price fell 7.8 per cent to $1,153,269 from last year, it was roughly four per cent higher than the $1,108,499 the average buyer paid in March. The number of sales for the month reached 7,531, down 5.2 per cent from a year ago, but up approximately nine per cent from March.

However, new listings were down by over a third from a year before, exacerbating the competition between buyers who were hesitant to buy homes earlier this year. This hesitance was partly due to eight consecutive interest rate hikes, which reduced their borrowing power even as prices started to decline.

These lower prices weighed on sellers as well, as many held off listing their homes, knowing they would not fetch the big sums or bidding wars that their neighbours had seen in 2021 and early 2022. However, real estate agents have observed the market turning in recent months. For instance, bidding wars have become the norm, according to Davelle Morrison, a Toronto broker with Bosley Real Estate Ltd.

TRREB President Paul Baron thinks that the demand is coming from buyers who have come to terms with higher borrowing costs and are taking advantage of lower selling prices compared to this time last year. Nonetheless, meeting the rising demand with adequate supply will be a challenge, given the lower supply levels observed in April compared to past years. New listings for the month totalled 11,364, down 38.3 per cent from a year ago.

Penelope Graham, director of content at Ratehub.ca, a mortgage rate comparison site, pointed out that inventory levels signal sellers “remain at odds with timing the market.” She added that “There’s a perception that prices still have further to recover, while others are likely reluctant to become buyers in today’s market environment, given higher mortgage rates, and tight inventory.” This catch-22 constraining supply is driving competition in the market.

Prices remain down from last year’s levels, with detached homes falling 8.3 per cent since last April to $1,489,258, while semi-detached properties dropped 9.8 per cent to $1,135,599. Townhouses slid 3.2 per cent to $986,121 over the same time period, and condos were down eight per cent to $724,118.

Toronto’s data was released a day after the Real Estate Board of Greater Vancouver published its April data, which showed that home sales are staging a comeback and headed toward levels seen last spring. Sales last month in the Vancouver area totalled 2,741, almost 16 per cent below the 10-year seasonal average and 16.5 per cent below the April 2022 level. The composite benchmark price for all residential properties in Metro Vancouver hit $1,170,700 last month, down 7.4 per cent from a year ago but up 2.4 per cent from March. There were 4,307 new listings last month, a 29.7 per cent decrease from the prior April and a 22 per cent drop from the 10-year seasonal average of 5,525.