Home prices in the GTA crept up in April as the market tightened, according to the latest data from the Toronto Regional Real Estate Board (TRREB).
The average home price in April in the GTA was $1,153,269, up from $1,108,499 in March. Despite this increase, overall prices were still down 7.8 percent from a year prior.
While successive interest rate hikes put the brakes on market momentum over recent months, that respite was temporary. In April, sales outpaced new listings by a wide margin, creating competition among buyers, resulting in price increases.
Sales dropped by 5.2 percent year-over-year in April, while new listings plummeted 38.3 percent in the same time period. Sales climbed over March levels on an actual and seasonally adjusted basis.
Buyers are becoming more comfortable with higher interest rates and are motivated to buy with relatively lower housing prices. Meanwhile, an ongoing lack of new supply, along with a heavy reluctance from sellers to list on the downswing in the market, are pushing the gap between supply and demand wider.
“As demand for ownership housing has picked up relative to supply, we are seeing renewed upward pressure on home prices. For a short period of time, higher borrowing costs trumped the impact of the constrained housing supply in the GTA. Renewed competition between buyers is once again shining the spotlight on the persistent lack of listings and resulting impact on affordability,” said TRREB Chief Market Analyst Jason Mercer.
The benchmark price in the GTA in April dropped by 12.1 percent year-over-year, although it was up from the month prior.
All housing types saw decreases in both benchmark and average selling prices, year-over-year.
With demand expected to continue to grow, ultimately putting more upward pressure on housing prices, “The issue moving forward will not be the demand for ownership housing, but rather the ability to meet this demand with adequate supply. This is a policy issue that requires sustained effort from all levels of government,” said TRREB President Paul Baron.
