Housing Market For May 2023
*Base on TRREB data recorder over Canadian MLS Systems. All percentage changes are year-over-year comparisons.
Growing Competition in the GTA Real Estate Market Amid Tight Market Conditions.
In March 2023, the housing market conditions in the Greater Toronto Area (GTA) tightened, indicating increased competition among buyers. Sales accounted for a larger share of listings compared to the previous year, and the average sale price exceeded the average list price for the first time since May 2022.
TRREB President Paul Baron acknowledged the growing competition between buyers in many GTA neighborhoods, as reported by Toronto Regional Real Estate Board (TRREB) members. Consumer polling also suggests a continued recovery in demand for ownership housing, with first-time buyers leading the way as high average rents align more closely with ownership costs.
In March 2023, GTA REALTORS® reported 6,896 sales through TRREB’s MLS® System, a decrease of 36.5% compared to March 2022. However, both actual and seasonally adjusted sales increased on a month-over-month basis. New listings were also down compared to the previous year, indicating tighter market conditions.
TRREB Chief Market Analyst Jason Mercer highlighted lower inflation and increased uncertainty in financial markets, resulting in lower medium-term bond yields. This trend is expected to continue, leading to lower fixed-rate borrowing costs throughout the year. Lower borrowing costs will improve affordability, especially as market conditions put upward pressure on selling prices in the second half of 2023.
On a year-over-year basis, the MLS® Home Price Index composite benchmark decreased by 16.2%, while the average selling price dropped by 14.6% to $1,108,606. However, both the benchmark and average selling price increased on a month-over-month basis.
TRREB CEO John DiMichele emphasized the importance of substantial rental supply due to the ongoing record-paced population growth driven by immigration. However, the current availability of purpose-built rental units is insufficient. DiMichele called for policy measures to increase the number of purpose-built rental units in the coming years.
In summary: In summary, the real estate marketplace in the GTA is experiencing heightened competition among buyers, with increased sales and tighter market conditions. Affordability may improve due to lower borrowing costs, although selling prices are expected to rise later in the year. The rental market is facing challenges due to limited supply, highlighting the need for more purpose-built rental units to accommodate the growing population.
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