Strong Home Sales in GTA Amidst Supply Shortage

In June 2023, home sales and the average selling price in the Greater Toronto Area (GTA) remained higher than the levels of the previous year. However, seasonally adjusted sales experienced a slight decrease compared to the previous month. 

According to Paul Baron, President of the Toronto Regional Real Estate Board (TRREB), the demand for owning homes is stronger than last year, despite higher borrowing costs.

However, uncertainty regarding the Bank of Canada's outlook on inflation and interest rates, as well as a persistent lack of inventory, hindered home sales last month. This lack of available homes prevented some potential buyers from finding suitable properties, resulting in decreased sales.

GTA REALTORS® reported 7,481 sales through TRREB's MLS® System in June 2023, representing a 16.5 percent increase compared to June 2022. However, the number of listings decreased by three percent over the same period.

The year-over-year increase in sales, coupled with the decrease in new listings, indicates that market conditions were tighter in June 2023 compared to the same period last year. The average selling price rose by 3.2 percent to reach $1,182,120.

Although the MLS® HPI Composite benchmark still showed a 1.9 percent decline on a year-over-year basis, it was the smallest annual rate of decline in 2023. On a month-over-month basis, both the seasonally adjusted average price and MLS® HPI Composite benchmark increased.

Jason Mercer, TRREB's Chief Market Analyst, attributed the strong home sales to a resilient economy, a tight labor market, and significant population growth. He mentioned that the Bank of Canada's interest rate decision and its guidance on inflation and borrowing costs for the rest of 2023 will provide insight into the potential recovery of sales and prices.

John DiMichele, TRREB's CEO, emphasized the need for GTA municipalities to address the housing supply crisis, as they are falling behind in providing enough new housing to accommodate the growing population.

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