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The real estate market in the Greater Toronto Area isn’t showing signs of losing its momentum any time soon.
There were 9,097 sales through the Toronto Regional Real Estate Board's (TRREB) MLS® System, which represents a 16.8% price decrease compared to the year before, but prices have grown by double digits over the last year.
The MLS® Home Price Index Composite Benchmark increased 35.9% compared to February 2021, while the average selling price for homes in the Greater Toronto Area rose 27.7%.
Now, the average home price stands at an impressive $1,334,544.
There was some variation between regions and home types, but the disparity is starting to decrease, with condominium and low-rise apartments now showing similar trends.
Competition between homebuyers remains strong, which has played an important role in contributing to the growth in prices. However, there are some signs that the market may finally be starting to balance out, with home sales dropping faster than new listings.
This suggests that supply and demand may be more in line in the coming months. In the case of the condominium apartment segment, the number of new listings has actually risen since February 2021, while all other segments have seen a decrease in supply.
It will most likely take a while for prospective new buyers to notice the competition easing. Some expected price growth to slow down in 2022 given the number of sales in 2021 and the rising costs of borrowing, but we haven’t seen this take effect yet due to the housing stock remaining so low and the steady flow of immigration into the area.
As a result, house prices are likely to continue to increase at a moderate pace for the rest of 2022. Eventually, as the high prices discourage buyers, the supply of housing may start to outpace demand, and we’ll finally see slower price growth.