There were signs of cooling in the Greater Toronto Area housing market in May, with the latest report from the Toronto Real Estate Board (TREB) showing that the average sale price and the number of sales were down compared to the previous month, while listings continued to rise.
The report showed that the average sale price increased 14.9% year-on-year but, at $863,910, it was notably lower than the average price for April. The drop from the previous month was $56,881, a 6.2% decrease. That made it the biggest percent decrease in average price since July 2012.
TREB figures showed that the average sale price in the City of Toronto $899,728, down from $943,947 in April. This pattern was repeated in all areas of the GTA, with York Region recorded the largest month-on-month drop in prices (9.6%).
Sales were also down in May when compared with both May 2016 and April 2017. The total number of sales was 10,196, which was a 12.3% decrease from the previous month (11,630) and a 20.3% decrease from the same month last year (12,790). Looking at specific areas within the GTA, York Region saw the largest decrease in the number of sales, falling from 2,042 in April to 1479 in May, a 27.6% drop.
At the same time, the rise in the number of listings that began in April continued into May. There were 21,630 new listings and 12,296 active listings, which represented 48.9% and 42.9% year-on-year increases respectively. Those numbers were also significantly higher than the number of listings for April (21,630 new listings and 12,926 active listings) which is good news for the supply side of the housing market – a key contributor to rising prices.
However, while releasing the report, TREB president Larry Cerqua noted that “even with the robust increase in active listings, inventory levels remain low… This is why we continued to see very strong annual rates of price growth, albeit lower than the peak growth rates earlier this year”
Perhaps unsurprisingly, the rise in listings also coincides with an increase in the average amount of time properties spend on the market. In April, the average number of days on the market was 9 but this increased to 11 last month. Even though this is an increase, it still shows that there is high demand for properties in the GTA and this remains a seller’s market.
It is not yet clear what has caused the changes in the housing market. While there are suggestions that Ontario’s 16-point housing plan has had an effect, there may be other factors at play such as a reaction from buyers to the massive increases in prices earlier in the year. It is also impossible to tell if this is a short-term effect or part of a longer trend but numbers over the next few months will provide a better understanding of the situation.