Let's Talk House Episode 13: Understanding the Current GTA Housing Market Trends and Their Impact on Buyers and Sellers

Let's Talk House Episode 13:  Are you curious about how the current housing market will affect your buying or selling decisions? In this episode of Let's Talk House, we bring you the latest insights and trends shaping the real estate landscape in the Greater Toronto Area (GTA).  We will delve into the recent data and its implications for homebuyers and sellers in the Toronto and GTA real estate market. Let's explore the key factors influencing the market and gain valuable knowledge to navigate the evolving housing landscape. 

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Transcript

Are you wondering how the current housing market will impact your buying or selling decisions? In this episode, we bring you the latest insights and trends shaping the Greater Toronto Area (GTA) real estate landscape. We'll dive into the recent data and its impact on home buyers and home sellers in the Toronto and the GTA real estate market.  Only here at Let's Talk House podcast, your goto source for all things real-estate, mortgage and beyond in the Greater Toronto Area, in Canada.

Welcome Home, I'm your host, Lei Villar-Cisneros. 

May 2023 witnessed a positive trajectory for the GTA housing market, particularly from a sales perspective. However, this success story comes with a caveat. The supply of homes for sale failed to keep pace with the robust demand for home ownership. Sales as a share of new listings surged dramatically compared to the previous year, signaling intensified competition among buyers. As a result, the average selling price soared to nearly $1.2 million last month.

These developments have raised concerns about housing affordability and supply. Toronto Regional Real Estate Board (TRREB) President Paul Baron highlights the persistent failure of governments to address the housing supply issue. Ipsos polling revealed that City of Toronto residents gave the Council a failing grade on affordability, attributing it to the lack of available housing options. This problem extends beyond Toronto and permeates the entire Greater Golden Horseshoe region. Failing to bridge the gap between housing supply and population growth could hamper our region's economic development as people and businesses seek alternative locations.

Let's delve into the numbers. GTA REALTORS® reported a notable 24.7% increase in sales through TRREB's MLS® System in May 2023 compared to the same month last year. Conversely, new listings experienced an 18.7% decline over the same period. On a month-over-month seasonally adjusted basis, sales rose by 5.2% compared to April 2023.

TRREB Chief Market Analyst Jason Mercer sheds light on the factors fueling this surge in demand. Many homebuyers have adjusted their housing needs in response to higher borrowing costs and are reentering the market. Additionally, robust rent growth and record population increases driven by immigration have further supported the rise in home sales. However, the limited supply of listings failing to keep up with sales has resulted in upward pressure on selling prices, particularly during the spring season.

Turning our attention to the MLS® Home Price Index (HPI) composite benchmark, we note a year-over-year decline of 6.9% in May 2023. However, on a seasonally adjusted monthly basis, the benchmark price experienced a 3.2% increase compared to April 2023. So, what does this mean? prices are trending up since March. Similarly, the average selling price, at $1,196,101, reflected a modest 1.2% decline relative to May 2022. But on a seasonally adjusted monthly basis, the average selling price surged by 3.5% compared to April 2023. To summarize, compared to last year's prices, we are still a bit lower this year but prices are slowly trending up since March.

TRREB CEO John DiMichele draws attention to the broader implications of the high cost of housing. The shortage of supply and elevated borrowing costs contribute to the overall increase in the cost of living. Municipalities, including the City of Toronto, need to consider this when contemplating revenue generation options. TRREB emphasizes the limited patience households have for higher taxes, including unreasonable property tax hikes and prohibitive upfront land transfer taxes.

As a buyer or seller in the Toronto housing market, these insights hold immense significance. Understanding the dynamics of supply and demand, pricing trends, and the impact of government policies can empower you to make informed decisions. Stay tuned for future episodes as we delve deeper into neighborhood-specific analysis, financing strategies, and expert advice to maximize your real estate investments. Remember, knowledge is key to thriving in the ever-evolving GTA housing market.

Now, let's look at the mortgage interest rate for the last 2 weeks and it shows that it is trending up as well. This is due to the rising inflation cost once more. Canada's inflation rate was 4.4% in April 2023, a slight step up from the 4.3% annual inflation rate seen in March 2023. Once again we are in this unpredicted dance with mortgage interest rates and inflation rate. We've been predicting and anticipating a market slow down, recession but looks like we might not see the end of this roller coaster ride yet. The Bank of Canada held the target for its overnight rate unchanged at 4.5% as promised and stated that it will continue to monitor the latest economic data for future decisions on the policy rate but as we all know, if this trend keeps going up, it's only a matter of time before another policy hike is set. We just have to wait and see if and when it actually happens. My name is Lei Villar-Cisneros and this is Let's Talk House, until next time.